Linkedin IPO success could mean dis-intermediation of the headhunter/recruiter

The enormous success of the Linkedin IPO is shocking to some as Linkedin revenues for 2010 was  $243 million with a profit of only $15 million and the company is valued at almost $9 Biliion!   Half of the Linkedin revenues came  from recruiter advertising and it sure means changes for the recruiter/headhunter businesses. Don't get me wrong, this blog strongly  believes that agents and distributors  have a huge role in business. But its time to  think if the the recruiter/head hunter would go the way of the neighborhood travel agent or the real estate agent – i.e. see a decline in business or at least commissions as employers directly reach candidates via Linkedin and job seekers directly reach recruiting organizations. Without a head hunter as intermediary, the high powered individual candidate might also not be able to negotiate great pay packages  as well.

It's not entirely clear how much of the Linkedin revenues is from headhunters'  advertising and how much is  from companies directly advertising open positions. Either way, the recruiting/headhunting business is set to change  for all types of positions even as the economy turns around. The CEO type of positions should not be much affected just as the very complicated travel plans and very high value real estate deals need high level personal agency work. You can't really book complicated travels via Expedia or buy a really expensive property without a "human" real estate agent! .

So if you are in the recruitment/headhunting business you might want to include Linkedin explicitly in the offer you give out to companies and re-think  the value and innovation you will provide in the recruiting process.

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