Disintermediation

What is it? Spend what might be the best minute and 48 seconds you’ve spent in a long time and watch this video.

Ok, now that you’ve got the gist of it. Think about disintermediation when it comes to the recruiting industry. I’ve had a goal for a long time to reduce reliance on job boards. Not because they’re evil, not because I have a personal vendetta, but because the model is goofy to me. The analogy I use sometimes is that job boards are a bit like HMO’s. HMO’s stand between the patient and doctor. HMO’s have an undue influence on the choices of the patient, and ultimately the kind of connection they have with their doctor. HMO’s also have an enormous impact on the experience that a patient has in seeking care. I think the parallels with job boards are obvious.

Enter the force of disintermediation.

The internet has made it easier and easier for individuals (and companies) to have access to the things that before required an intermediary or middleman. Used to be we paid job boards for the posting, and they did the SEO work on the job so it showed up in results on Google. Now with vendors like jobs2web the job boards are suffering the effects of disintermediation. This is just one example among many of how disintermediation is affecting our industry.

What changes do you see or foresee as a result of disintermediation?

What are the implications of disintermediation for job boards, Agency recruiters, CRM vendors, ATS vendors, corporate recruiters, or anyone in the recruiting industry?

Even better, what will your response be when, not if, disintermediation starts to affect your world?

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    @JohnSumser Disintermediation + Recruiting, anyone else talking about this? [link to post]

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    RT @joshuakahn: @JohnSumser Disintermediation + Recruiting, anyone else talking about this? [link to post]

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  • Good subject, Josh.

    Before you go tarring the HMOs, let me tell you about Kaiser in Northern California.

    Because the entire system operates from a single shared database of medical records, digital xrays, drug interactions and correlations between treatment protocols and population health, the system is astonishing. It delivers better care than is otherwise available. All of the experts look at the same charts. The data lags that cripple most diagnostic processes are absent (the tests are on your chart (and your PC) by the time you get home. The doc works your chart through email as well as in the office.

    If anything, the HMOs are going to disintermediate the family doc and all of his friends.

    That said, what is being disrupted is the recruiting department, not its vendors. The vendors get displaced because the essence of recruiting is shifting.

    Recruiting used to be about finding people. Nowadays, it's more about being found. That's because a vast majority of people are online and easily discoverable.

    During the downturn, lots of Recruiters got laid off. It was smart...no hiring, no need for recruiters. As the economy stabilizes, they are not likely to get rehired in the first ten waves of hiring. Instead, new entities and tools will shoulder the work.

    It's a time where everything you know about recruiting is wrong.
  • John - pleased as punch that you took the time to chime in.

    I guess that's where the HMO analogy breaks down. That's a great example of how HMO's have improved things.

    I agree totally that recruiting is seeing a huge change that's only going to get more significant. That's why I think its important to talk about this. Sourcers - are you going to flip burgers when disintermediation in your world hits the tipping point?

    My hope is that people will think about it now, and plan for how they can shift their skills to a place that makes sense within the realm of connecting company and potential employees. Its possible, but its not an overnight transformation.

    From what I see, many folks have their head buried in the sand on this one. Achtung Ostrich's!!
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    What will you do when Disintermediation comes for you? [link to post]

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  • You know, I am talking to a lot of people for the Top 100 project over at RecruitingBlogs.com Pretty much every senior leader I've spoken with assumes that the "disruption" is imminent.

    Disitermediation, in this case, means the same fate that the newspapers experienced. It has been forseeable for a while. Soon, it will feel like dropping off the edge of a cliff.

    It started with the earliest layoffs in this recession. You'll see it in place in the way that people rebuild following the downturn.
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    RE: @joshuakahn You know, I am talking to a lot of people for the Top 100 project over at RecruitingBlogs.com Pretty m… [link to post]

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  • Ted
    The real opportunities are for smart organizations that embrace and invest in this - instead of fighting it, they can facilitate it. For example, I can go onto Amazon and self publish a book for free. It costs nothing and takes about an hour to get the pdf in the right format. I win and Amazon wins. The publishing business loses. The platforms that make this change easy will be the big winners.

    Whether you agree that this is right or wrong doesn't matter. It's happening. Organizations large and small have to invest in it.

    This will disrupt the entire recruiting industry. And thank goodness because it needs disruption. The platforms that connect talent to companies in meaningful, measurable ways will win.
  • In many ways, the foundation for the disintermediation of the recruiting industry has been in place for a decade or more. Candidates have been able to find and reply directly to corporate job postings on the Internet for a long time, and corporate recruiters can find and engage candidates through a vast variety of Internet sites and services.

    The advent of the big job boards (Monster, Careerbuilder, Hotjobs, etc.) was supposed to completely disintermediate recruiting and staffing (at least if you believed the press at the time). Why would a company ever need to use a 3rd party staffing firm when they have access to huge job boards with huge candidate databases?

    Now we have social media and huge social networking sites in addition to the job boards (which are far more useful to search for candidates than to post jobs, btw), as well as better SEO, vertical job search engines, talent communities, and CRM applications with artificial intelligence matching capability. With all of those resources and advances in technology - is finding the right person at the right time measurably any easier than it was 10 years ago?

    How often does the following scenario unfold? -> Company seeks talented professional and struggles to find the right person in a timely manner...engages services of a 3rd party search firm that quickly finds a fantastic candidate...which, upon presentation to the company, is discovered to have been in the company's database (or on LinkedIn, or on a job board they have access to) all along. Why can't so many companies find what they already have access to?

    For disintermediation to occur, we need to figure out why and how things like this happen and solve the underlying issues.

    Now more than ever, it's quite easy to find people. Finding people is not the challenge - the challenge lies in finding the right people at the right time. Having access to large talent pools and communities does not guarantee that you can find and/or already be connected with the right person when you need them. In fact, having easy access to more potential candidates actually exacerbates the challenge.

    There are corporations with ATS/CRM solutions empowered with sophisticated matching technology housing literally 10M+ candidates and yet they still struggle to find and hire the right talent at the right time.

    CRM software, matching applications, social networking sites, SEO - they are only tools - they are not solutions. "We must remember that in the end it is the individual human being who must solve the problems." - Eiji Toyoda

    What, if anything, actually exists today that is preventing or delaying disintermediation in the recruiting industry?
  • The disruption won't happen in a uniform way. It's a two step thing that will happen differently by size, region and industry.

    Glen nicely describes the fact that staffing, hiring and recruiting are prioritized differently by company. Some think it's important to be great at it, some are willing to be sloppy and expensive about it.

    The next shift will happen in two waves. First, as the workload from a strengthening economy increases, recruiting services are going to be acquired rather than done in house. When additional inhouse recruiters are finally hired, they will have heavier workloads. It's a one-two punch.

    Both waves will force companies to closely examine the value they get from their recruiting.

    Right now, you can find a lot of waste in the recruiting process. Not for long.
  • Great points, well said all of them.

    The thing that is delaying disintermediation right now, in my opinion is the force of inertia in HR people and recruiters. Relatively speaking there aren't a lot of people who understand both technology and recruiting in a way that allows someone to synthesize the use of tools and resources in an efficient and useful way.

    My experience echoes yours that its not hard to find people, its getting harder to find the right people. In my mind, the solution to the problem involves in part helping candidates filter OUT of the opportunity. For me this is done by sharing the real story of what its like to work at company A. I.e. - the org chart here changes all the time, its a very ambiguous environment, you'll have many different managers over the course of your time here, etc. Some people will see that and be scared off - which is good. Others will see that and realize its exactly what they want.
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    What is disintermediation? Insightful post by @joshuakahn [link to post]

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    Check out the discussion going on regarding the disintermediation of the recruiting industry: [link to post] What are your thoughts?

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  • The recruiters I work with deal with companies that tend to not have an internal recruiting team. With that, it is tough for an HR department to pick up certain levels of positions to be filled because they don't have the expertise. Tools are wonderful and helpful and needed, but it is the people that have to make them work. Are the people going to change so fundamentally that they will be willing to learn the right tools, keep up with them and do it themselves or will the role of the third party recruiter become much more of a contractor called in to supplement the HR department that doesn't have that expertise?
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    RT @BooleanBlackBlt: Check out the discussion going on regarding the disintermediation of the recruiting industry: [link to post]

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    RE: The disruption won't happen in a uniform way. It's a two step thing that will happen differently by size, region an… [link to post]

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  • the Disintermediation from @joshuakahn what's the future for recruiting?
  • Google was supposed to disintermediate monster and careerbuilder 5 years ago. Then indeed and simplyhired were going to disintermediate monster and careerbuilder 2 years ago.Last I checked Monster and Careerbuilder are alive and well. Disintermediation is subject to the law of inertia and the elusive tipping point mentality.

    Jobster tried social networking recruiting 3 years ago. Linkedin is trying to monetize their network now. Opensource ATS was going to be disruptive a few years back as well and now MR TED is trying again with its smartrecruiter product. Meanwhile Taleo et al seem to be chugging along just fine.

    So long as you can keep re-defining the space and the value proposition you can defend against disintermediation. When what you are providing for a fee can be obtained for free with EQUIVELANT experience and quality, then you reach the tipping point.

    Recruiters need to focus on quality of hire now that so much talent is available. And in the 10% plus unemployment world, the passive candidate becomes a rare species that is prized. There are still ways to differentiate wether you are on the corporate, 3rd party, or vendor side of the equation. But the tipping point is coming...
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