Is the recruitment industry threatened by tech disruption ?
Recruitment can be a headache for companies of all formats. In the last few decades, numerous markets have encountered disruption due to the emergence of new technologies. It is not merely the emergence of these technologies that can disrupt such markets but also the willingness of powerful players within the market to adapt the change.
Let’s take a look at the history of digization in the recruitment industry. In 1992, Bill Warren launced the first job board under the name of the Online Career Center. Three years later, Warren’s flagship was sold to TMP, which resulted in a merger with what we nowadays know as Monster.
The first advancement in this online recruitment market erupted in the late 90s and in the beginning stage of the new millennium. In this period, two new types of job boards appeared; niche and network boards. The niche boards fixated on offering jobs for specific market segments, job functions and geographic areas. On the other side, the networks encompassed a multi-niche approach where employers were provided with the ability to search by location, industry or other variables.
With the inauguration of the recession era and as a result the shrinking budget for recruitment many job boards failed to survive.
However, the recruitment industry did not yet fully grasp the full potential of the available technological advancements. For example lets take a look at Linkedin, which in its essence is not doing more than “transferring” offline paper resumes to an online social environment. Its first-mover advantage that allowed them to gain a huge share of the online recruitment market allowed them to ask employers premium prices for posting job vacancies online. This first-mover advantage resulted in a stable business model, which resulted in a major drawback for Linkedin. The king of the bear pack is not going out anymore to find new honey.
After the recession era, several startups saw an opportunity to offer the features that Linkedin not dared to offer. Companies as TheMuse, Glassdoor, Hired erupted to offer employers and employees an improved service. Why are we still writing motivation letters if a video can tell us more about our motivation? It is at least much more difficult to fake motivational drivers when a recruiter can read your body language. The only reason I can come up with is that the recruiter can examine a candidates writing skills by using motivation letters. However, an assessment test can examine for the identical purpose.
In conclusion, there are huge opportunities for innovation in the recruitment industry and thereby opportunities for recruitment companies to differentiate themselves from the crowd. A new trend of hyperdifferentation can be signaled, platforms that focus solely on a particular job market or concentrate on a singular process within the recruitment process seem able to gain profits.