Umair Haque / Bubblegeneration
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Tuesday, February 08, 2005


LinkedIn Jobs vs HR

It's no big surprise that the HR industry is fundamentally broken. We've all received the advice that if your application ends up in the hands of HR, you might as well as kiss it goodbye. So why didn't the Net (as promised in 98) kill HR?

The Net's first attempts at destroying HR were pretty crude - Monster, etc were (are) basically big fat databases. It's easy to say why they didn't really work (because the economics were wrong) - it was cheap enough for applicants to essentially spam potential employers, who realized only limited gains. In fact, interestingly, Monster and other job boards have ended becoming complements to HR, rather than substitutes for it - HR people are the ones that use them the most, because job boards reduce their costs of doing business, while their gains (ie salaries) stay the same.

Dot Com 2.0 is giving us more interesting solutions, like LinkedIn Jobs. Now, I'll be the first to say I find LinkedIn's solution more than a little creepy, and potentially open to massive gaming.

But the economics behind it are fascinating. Essentially, LinkedIn Jobs threatens to replace HR with, well, you and me (plus a simple bit of software). That is, with what I've termed distributed economies of scale - massively distributed information revelation (and/or production). Note that Monster et al never met the criteria for this model, which begs the question - why has innovation from the incumbents been stagnant for the last few years?

The Dot Com 2.0 vs HR question becomes this: is it more efficient to massively distribute the processes and routines of HR (filter, sort, get references, arrange meetings) than it is to specialize it? Put another way, assuming the gains to potential employers and job-seekers stay the same, is it less costly to massively distribute and then extract information about both on LinkedIn's network (using LinkedIn's search/reference/etc mechanisms) than it is in the real world? Put really simply - can n people on LinkedIn do as good a job as the folks down the hall in HR?

My guess is that the answer is yes - but only because HR in the real world is so amazingly inefficient. Either way, this is a textbook example of a massively distributed model whose goal is to radically alter the structure of an industry whose time is long past due. And this time the economics are far, far more attractive.

-- umair // 1:51 PM // 0 comments


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