Points of View

Linkedin’s Relevance to the HR Market

Feb 9, 2016

As the largest community of online professionals and the largest online jobs board, LinkedIn is by default a major player in the global HR market. The company took a serious bruising last Friday, losing 43% of its stock value—a loss of around $11 billion.

 

This slump brings up some awkward questions, most notably: Is LinkedIn still relevant? By looking at the number of members it has, one would have to say “yes”—especially since member numbers have continued to increase steadily since Q1 2012 and now sit at 414 million. What is interesting is that member page views this quarter dropped for only the second time since Q1 2012. And views per member are now at their lowest level in the last five quarters (~89 views per member).

 

So what does this mean for the company and what role does LinkedIn have in today’s automated and insights-led HR market?

 

Well, revenue expansion from talent solutions (including hiring, and learning and development) drove this quarter’s 34% topline growth with the offering growing by 45% year over year. Hiring has been a long-standing offering of LinkedIn. Learning and development is a new initiative, which it launched in Q2 2015 as the organization looked at further options to monetarize the platform.

 

As workforces become more geographically dispersed, with the adoption of virtual offices and work-at-home environments, an international job platform such as LinkedIn should, at least on first glance, be a sustainable model. Most of LinkedIn’s current competition in this area comes from regional job boards.

 

However, there are some drawbacks to the platform:

 

  • First, the user interface is cluttered, making it easy to miss job postings in the melee that appears on one’s home screen, coupled with an algorithm that matches users to job postings not being entirely accurate.
  • Second, and more importantly, LinkedIn dumbs down the job application process too much. In today’s world, one click sign-ups are commonplace. But do we really need this functionality when applying for a highly paid job? In a previous SoundBite we looked at Mercer Match, which uses cognitive testing and analytics to screen and route applicants to applicable jobs based on behavioral characteristics. One of the main benefits of this tool is that it reduced the number of applicants but improved the quality of those that made it through to hiring managers, allowing for a more selective interview process. With LinkedIn’s one-click application process, hiring managers open themselves up to high volumes of applicants, many not suited to the role.
  • Third, because the platform is also used by headhunters and recruiters, one would assume that the high member could would make it the ideal means to scout for available talent. This is true, but the platform is only really useful to recruiters/headhunters as long as members keep their profiles up to date. The decreased page views per member are a sign of lower usage and potentially outdated profiles, which creates a double edged sword: Recruiters/headhunters see LinkedIn as less relevant and therefore make less use of it and then members using it for job hunting purposes are less inclined to keep their profiles up to date. All of this has further knock-on effects for members using the platform for sales purposes.

 

There are some obvious holes in the platform from an HR perspective. LinkedIn can still address the deficiencies through a change to the user interface and a rethink of the job application process, which could increase member interaction with the platform. LinkedIn remains the largest community of professionals and, as such, it still has an extremely strong hand to play.