Transparency and Disintermediation

Posted by Corporate Recruiting Blog at 1/18/2008 6:59 PM
Categories: Metrics

This is from Wikipedia:

In economics, disintermediation is the removal of intermediaries in a supply chain: "cutting out the middleman". Instead of going through traditional distribution channels, which had some type of intermediate (such as a distributor, wholesaler, broker, or agent), companies may now deal with every customer directly, for example via the Internet. One important factor is a drop in the cost of servicing customers directly.

Disintermediation initiated by consumers is often the result of high market transparency, in that buyers are aware of supply prices direct from the manufacturer. Buyers bypass the middlemen (wholesalers and retailers) in order to buy directly from the manufacturer and thereby pay less. Buyers can alternatively elect to purchase from wholesalers. Often, a B2C intermediary functions as the bridge between buyer and manufacturer.


Now, lets consider the online recruiting marketplace. I believe the future of "Jobs on the Internet" is via the "Employment Search Engine / Job Aggregator model" which connects jobseekers directly with opportunities at companies - no middlemen.. In fact, 2 years ago I was sitting with Dan Finnegan - President of Yahoo Hot Jobs, at the SHRM convention and he agreed! (maybe explains why he is no longer there - but that is another story).  The need for mega jobboards was once necessary and vital, but today - with thousands of corporate websites containing jobs - the new "employment search engine model" is far superior.

So, why has the disintermediation of job boards been so slow????  One big reason is a lack of market transparency to the online recruiting marketplace. A mythology exists in the marketplace that the "Big 3" represent 90%+ of employment traffic. This is supported by an uninformed media, multi-million dollar ad campaigns on the part of job board advertisers, and a lack of tracking of candidate sourcing metrics and understanding of Internet traffic metrics on the part of corporate HR / Recruiting.

So why is this such a problem???  Mainly because the strategy of the big board players is to suck your recruiting budget out of your pocket before you can begin to get started with any type of competing strategy. Sadly, I know many of my friends who have to pay hugh fees to the big board gods for "vapor advertising".

The job that we as leaders in the industry have to do is force more transparency and provide more education so the facts can come out.

This is going to be a fun year!

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