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I have reflected further on the two recruitment conferences that I attended late last month.

The thoughts I documented straight after the conference were about the direct threat that I saw being posed to the traditional recruitment agency business model (last week’s blog was an analysis of the downfall of one of those traditional agency businesses, HJB, that had failed to change fast enough).

It struck me after listening to Laurel Papworth’s session, that the changes to the recruitment industry brought about by the power of search engines and the vast amount of information available on the world wide web, is still just in its infancy.

In the pre-internet era, a vast amount of information was held by middlemen or gatekeepers. These gatekeepers invested time and resources to gather information before deciding what information, and in what format, was made available to the public (mostly for a price). Traditional media, real estate agents, stockbrokers, travel agents and recruitment consultants, are all examples of gatekeepers.

Transparency about the quality (and quantity) of this information was almost always available through personal experience so the word of gatekeepers was generally seen as credible. Even if this information was later proven to be of poor quality there was no cheap or easy way to inform others of your experience.

 Although these gatekeepers still exist they have been forced into a brave new world where anybody with access to the world wide web can use a search engine to instantly find unfiltered information on any topic of their choosing.

This has had significant ramifications for the world of agency recruitment.

Being the gatekeeper of information about candidates and clients has now been superseded to a large degree with what any person can discover for themselves.

The big difference in the era we are in right now, compared to the first fifteen years or so of the world wide web’s existence, is the way data is now gathered, structured and ranked for very specific areas of interest. Trip Advisor is one of the most successful examples of this change (although it was established over ten years ago).

The power of Trip Advisor to make or break hotels, restaurants and attractions is well documented. I am a big fan; I always consult Trip Advisor before making bookings for restaurants and hotels and deciding upon attractions to visit.

Clearly, Trip Advisor has had a vast and significant impact on the role that travel agents playing; providing advice to customers prior to bookings being made. As a 47 year old with a wife and three school age children, I would be reluctant to give much weight to the travel advice of a young, fresh-out-of-school, non-parent travel agent when I can discover on Trip Advisor what other people in my demographic recommend.

This gathering, structuring and ranking of data is now starting to gather momentum in the world of work. Here are just some examples:

Freelancer ‘Hire Freelancers and Find Freelance Jobs Online’

Task Rabbit ‘Find safe, reliable help in your neighbourhood’

Builders Crack ‘The best way to find great tradespeople’

Airtasker ‘Find people to help you around the home of office’

Find a Babysitter ‘A meeting place for parents and babysitters’

Job Advisor  ‘It takes just 60 seconds to anonymously review your employer and help other Australians make an informed decision’

All of these sites are, to a greater or lesser degree, taking on the key components of an agency recruiter’s role; providing a range of significant, evidence-based information about either job seekers and job providers (or both) and bringing those two parties together for a mutually beneficial match.

These sites, and others like them, are like The Yellow Pages, but far more useful. The Yellow Pages gathers information on an area of interest (eg Florists, Plumbers, Recruitment Agencies etc) with a very basic structure (eg geographic and/or alphabetical) but provides no ranking or qualitative data. The sites listed above all provide ranked, qualitative data.

The big challenge now for recruitment agencies is to do the same; to provide evidence-based and ranked qualitative data about their candidates. This is where the future relevance and profit is. Just providing basic candidate data (eg resume and availability) will be about as useful, relevant and profitable as The Yellow Pages will be (or is now?).

Any client can find a candidate’s basic digital footprint simply by undertaking a basic internet search to see what might appear in ranked search pages attached to that person’s name (extending the metaphor further, this is like The White Pages, where you are searching for a specific name). This is predominantly quantitative data, not qualitative data. Using this information at its face value could be very unwise; how reliable and relevant is that LinkedIn recommendation or that drunken photo from last year’s Christmas party?

Sites like Freelancer, Task Rabbit, et al have shown the way for recruitment agencies. They are providing highly relevant, qualitative information to a niche audience using technology as the platform to do so. The phenomenal growth of these sites is early proof that there is an audience that both wants this qualitative information and likes the model of accessibility and pricing currently being offered.

You can be absolutely certain that LinkedIn, cashed up and on a massive growth path, is very focused on enhancing the depth and breadth of qualitative data that it provides. The Skills & Expertise section that has been recently added to LinkedIn member profiles is just one simple example.

None of the sites I have listed above have significantly eaten into existing recruitment agency markets.

LinkedIn has eaten into existing agency markets, as has been their very clear intention to do so, so isn’t it only a matter of time before they are joined by many smaller, niche players, modelled on the Freelancers, Task Rabbits and Builders Cracks of this world?

I certainly think so.

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