There has been much analysis of why Microsoft paid such a premium for the social media site, but what are the ramifications for executive recruiters?
LinkedIn has already been hugely impactful for the Search industry. It’s played a significant part in the growth of the internal search team, thanks to the view that executive information is more readily available in the past, and therefore the perceived value of the retained Search service has been reduced. This in turn has reduced – at least in percentage terms – the number of searches being implemented by external firms and this has made for a tougher market. Search firms have had to raise their game, hence the current focus on KPI indicators and the like.
The strength of LinkedIn has always been its data; indeed, the $26.2 billion valuation can be expressed as roughly $60 per user on the platform. However, the network has tried to build a recruiting system onto the back of the database with rudimentary management tools being built into the platform. Of course, the main drawback with this effort was that while the LI database was huge, it was not exhaustive. How many CEO of Fortune 500 firms can be found on LinkedIn? A fair few. How many update and manage the profile themselves? Hard to say. I suspect somewhere below two. And probably at the bottom end of that scale. And it’s not just CEOs. Research by Shortlist (joinshortlist.com) suggests 60% of 300 firm leaders at Asset Management companies are not on the site. Indeed, this analysis found that only 20% of that group had profiles “with the amount of detail you’d want when looking on LinkedIn. And their low number of connections suggests a correspondingly low level of engagement with the platform.”
A recruiting team looking for the best candidate for a strategic position does not wish to search from a huge list of candidates – it wishes to source from the full list of the best candidates. LinkedIn rarely offered that, and so recruiters on the platform either ended up trying to upload candidate data into the system or use a third party tool such as our FileFinder App to manage the process, importing information from LinkedIn as and when required (My day job is CEO of Dillistone Systems, who work with 1,600 retained search firms along with in-house search teams at Fortune 100 and FTSE 100 companies, universities and so on – so I may have some bias!).
For Microsoft, the acquisition is all about growing recurring revenues associated with its business platforms – Dynamics (the CRM platform) and Office 365. The feeling from Redmond seems to be that data will be finding its way into these platforms and, as a result, it may be that LinkedIn’s efforts at building a recruitment management tool will fade away. The focus will be on adding value to Microsoft’s technologies rather than trying to persuade firms to silo data within LinkedIn.
Microsoft have repeatedly stressed the importance of Office 365 to its future business strategy – CEO Satya Nadella has referred to it as the firm’s “most strategic platform”. Microsoft Windows is losing market share. Consumers are increasingly using mobile devices over PCs, while businesses are increasingly open to allowing users to work from home – even on Macs – and that means support for diverse operating systems and no downloads. This means Browser based access, and Office 365 is Microsoft’s play in this area. While historically Microsoft Office has been purchased, Office 365 (which, optionally, can include the Windows Apps) is cloud hosted and subscription based.
You can expect that over the next few years, information from LinkedIn will begin to materialise in Office365 friendly apps. Nadella talks of “new experiences such as a LinkedIn newsfeed that serves up articles based on the project you are working on and Office suggesting an expert to connect with via LinkedIn to help with a task you’re trying to complete,” as cases in point.
Microsoft’s strategy for Office 365 involves getting third parties to develop “line of business” apps that take advantage of the technology. There is a growing number of these – just this week it became possible for users to book meetings at Starbucks from inside Outlook. At Dillistone Systems we’ve been very much at the forefront of this trend, offering what we believe is the first and only executive recruitment technology to truly support the Office 365 concept (by which we mean support for Outlook on the Desktop and Outlook on the Web). We believe that as Microsoft makes more and more LinkedIn based services available through the Office 365 subscription tools like ours that partner with this platform will benefit hugely – and this can only be good for the thousands of people in and around the Search industry who use our tools on a daily basis.
Dillistone Systems provides FileFinder Anywhere Executive Search Software to hundreds of search firms and in-house teams, worldwide. Now available directly in your browser with no installation necessary, it offers a combination of search assignment management, CRM, report writing and research tools. FileFinder Anywhere is hosted in the Cloud, in a secure environment and backed up daily for you. All you need is internet access to be able to work anywhere, on any device – which can lead to increased collaboration, productivity and efficiency.