LinkedIn: Workers of the world, log in

The Economist reports:

Recruiters are LinkedIn’s main source of revenue. They pay for licences to trawl for likely job candidates and to e-mail them about vacancies, as well as for placing advertisements on the site. This business—called “talent solutions”—accounts for about three-fifths of sales. It allows recruiters to be more precise about the groups to search in order to find people to hire—people who attended certain universities, say. Rajesh Ahuja, the senior recruiter in Europe and Asia at Infosys, an Indian software company, focused a recent effort to hire 200 MBA students on graduates of several hundred colleges.

LinkedIn’s main benefit to recruiters has been to make it easier to identify people who are not looking for a new job, but who might move if the right offer came along. These “passive” jobseekers, says Dan Shapero, head of sales in the firm’s talent-solutions business, make up perhaps 60% of the membership (active jobseekers make up 25%; those who will not budge for any money make up the rest).

LinkedIn has made it easier for companies to identify such people themselves, rather than rely on recruitment agencies. In that sense, it represents a challenge to the agencies. Mr Ahuja says that two years ago he used external agencies to fill 70% of open positions in Europe. Now their share is 16%. Steven Baert, head of human resources at Novartis, a pharmaceuticals firm, says he hired “at least 250 people through LinkedIn last year when we might have used executive search in the past.”

An article worth your time.