News Analysis

Will LinkedIn and Second Life kill the recruitment industry?

Microsoft saved thousands of pounds recruiting technical staff through LinkedIn rather than hiring a headhunter. KPMG found its recruits through Second Life.

Social networking has meant that databases of potential job applicants, once the prize possessions of recruitment companies, are now public property.

Microsoft recruiter Declan Fitzgerald used that fact to his advantage when he was asked to find nine workers with niche IT skills to work on a security project.

"Finding nine techies with skills in the rare Assembly and X86 software languages is not that easy and traditional methods would not work," says Fitzgerald.

By using social networking site LinkedIn he was able to find suitable people and saved about £60,000 in recruitment company fees.

Indian IT supplier HCL claims to have saved £300,000 in recruitment fees in a year, while brewer SAB Miller saved £1.2m in recruitment fees in a year by employing 120 people directly from LinkedIn.

KPMG held a 48-hour virtual world jobs fair in Second Life in Septemberlast year.

Experienced professionals, recent and prospective college graduates, and others interested in career opportunities with the KPMG network took part. More than 10,000 applicants registered for the online event through KPMG's global website.

David Bloxham, director of recruitment services at recruitment firm GCS, says social media will change recruitment. "I do not think the recruitment industry will stop, but it will have to change."

He says with social media the candidate database in effect becomes public, and recruitment firms will have to add value to survive.

"We will have to provide referenced candidates. We can become experts in using social networking technology and we will have to find candidates that are passive and not actually looking for work, through sites such as LinkedIn," he says.

But social media is unlikely to have as big an impact on the recruitment industry as the recession, he says.

William Scott-Jackson of Oxford Strategic Consulting, who specialises in human resources, says LinkedIn and other social media platforms are useful for finding a small number of people with niche skills.

"This has always been the case in areas where skills are short, such as certain IT roles," he says. "But if you have thousands of people with similar skills it is better to go through recruitment firms."

Consolidation is inevitable in the recruitment sector, driven by social media and the economic downturn. Recruitment firms that harness social media and add value to it will be in a better position to prosper.


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