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Getting under the hood of LinkedIn
SINGAPORE has been described as a "Facebook Nation", with some 3.8 million users out of a population of about 5.5 million. When it comes to professionals, it might also be described as a "LinkedIn Nation".
LinkedIn has 1.6 million members here, which is about 44 per cent of Singapore's workforce (including foreigners) of 3.6 million. "Most professionals in Singapore have a LinkedIn profile,'' says Olivier Legrand, managing director of LinkedIn for Asia-Pacific and Japan, and also a vice-president of the 12-year-old company - which, in its short existence, managed to ramp up global revenues of US$3 billion in 2015.
When it comes to Singapore's knowledge workers - so-called PMETs (professionals, managers, executives and technicians) - LinkedIn reckons 80-85 per cent of them are on its platform.
Most people know LinkedIn as a professional networking site. "We know that relationships matter in business," says Mr Legrand, a 43-year-old Frenchman with a background in digital marketing. "We offer ways to manage relationships more efficiently. After a meeting, you connect with someone and then have a constant link with that person and are able to exchange content, to message and to keep in touch. If the person gets promoted, or changes his or her company, you know. That information in the cloud - it's not like you just have someone's business card which becomes obsolete when that person changes jobs.''
But Mr Legrand points out that LinkedIn is more than a virtual Rolodex; it's also a publishing platform. "Members share information. They go to your website, they read a story, they think it's good, and they're able to share that story with their professional network. Consumption and the sharing of knowledge on the platform is a great way to represent your skill sets - when you publish and share and add value.''
Then there are jobs. With its 415 million members, LinkedIn has become one of the world's biggest recruiting platforms. Mr Legrand calls it "connecting to opportunities". "People often find their next opportunity on LinkedIn. Or they find a path to promotion.''
"THE TALENT BUSINESS"
From building a vast database of resumes, it was but a natural step for LinkedIn to get into what he calls "the talent business", which accounts for about half of LinkedIn's total revenue. "We've traditionally been very active in the talent world,'' says Mr Legrand. But what sets LinkedIn apart from many others in the recruitment business, he claims, is that "we bring to life what we call 'passive talent'.
"If you need to recruit someone, in the old days you would put a piece of paper on your door saying 'we're hiring'. From the sticker on the door, we went to newspaper and classified ads, which brought scale. From there, it went to online classifieds and job sites such as Monster.com, which bring further volume and accessibility.
"But what those mechanisms do is address only those people who are actively looking for a job. But by creating a profile on LinkedIn, you don't need to be an active job seeker. But you're keeping up to date on what opportunities are available," Mr Legrand elaborates.
"So we're in a unique position to help companies source talent on our platform - both active talent and passive talent; both those who are actively looking for a job, and also those who, if they are offered the right opportunity, might decide it's the right time to switch.''
To be sure, some specialised recruiters tap into "passive talent" as well. They too have thousands of resumes in their files or databases, which they can activate when an appropriate opportunity comes along. But they don't have anywhere near the scale of LinkedIn or the richness of the personal data that is automatically updated.
LinkedIn offers companies a recruitment platform called "LinkedIn Recruiter" for which companies pay a subscription. Mr Legrand explains how it works: "Each recruiter has access to a seat, and they can search for candidates based on criteria, experience, industry, location, etc. They narrow down to a list of 10, 20 or 50 relevant candidates based on complex criteria and then reach out to these people.''
This is more efficient than the traditional approach to recruiting, he says. "In the traditional approach, recruiters put out an ad and they get hundreds of resumes. A lot of those resumes are irrelevant, so recruiters in firms spend a lot of time combing through applications that are irrelevant."
LinkedIn connects companies with people who fit specific criteria - for example, someone who is based in Singapore, has 10 years' experience in healthcare, and has been in a senior position for at least two years. "Enter those criteria, and you'll get a list of profiles that meet them. You can look through those profiles and then reach out to those you find interesting."
LinkedIn doesn't itself do the recruiting; companies use its platform to recruit themselves. "It's a very widely used tool,'' says Mr Legrand. "Most Fortune 500 companies use it, and many other large enterprises and SMEs as well.'' LinkedIn is, in effect (at least to some extent), disintermediating the multibillion-dollar global recruitment business.
AFTER RECRUITING: RETENTION AND TRAINING
In April 2015, LinkedIn bought the online learning Web portal Lynda.com for US$1.5 billion. While many observers were surprised by the acquisition, Mr Legrand points to potential synergies. "One of the key challenges facing companies after they recruit talent is retaining and developing this talent. That is why we acquired Lynda.''
LinkedIn plans to use big data to drive learning and development, he explains. "With 415 million people on the platform, we have a lot of career profiles and skills mapped out there. We can look at what skills are required for what jobs, and down the road, we'll be able to recommend the right course to the right people.
"Usually, companies buy thousands of courses, they put them on an Intranet and then they tell people: 'Go there and pick the course you like.' Often, nobody goes there, because it's overwhelming. There are hundreds of courses and you don't know where to start.
"But with the LinkedIn data, we should be able to tell you: 'Here are the five courses that should be a prioriity for you, based on your experience and what you tell us about yourself.' This will happen in the future, after we fully integrate with Lynda."
About 25 per cent of LinkedIn's revenues come from what Mr Legrand calls "marketing solutions" - essentially, advertising on the platform. Here too, it's carefully targeted. "We hope to uniquely target relevant advertising to you, in the form of digital advertising, or native advertising, which is really sponsored content,'' Mr Legrand explains.
"For example, we work with big tech companies like Microsoft, HP and others. They want to connect with IT business decision-makers - a very specific group of business-to-business buyers. They're able to find these people on LinkedIn, and we're able to target advertising to these members."
But the company's "sweet spot", he says, is business-to-consumer advertising for more expensive products, which the largely professional LinkedIn membership is assumed to be able to afford.
Mr Legrand suggests that new forms of buyer behaviour for high-priced goods give the LinkedIn platform an edge. "Buyers have changed the way they buy,'' he points out. "They use the Web to do homework about what they want to buy. They are usually 70-80 per cent into their buying decision on their own; they've already gone online, asked their network, and decided on a shortlist. We try to get involved in this 70-80 per cent 'consideration phase'. Because, if you get in only during the last 20-30 per cent, that person has already made the bulk of the decision, and your company may be irrelevant to them.''
For example, if you were going to buy an expensive digital camera, it's unlikely that you'll just go into a shop and say 'Hello, I want to buy an expensive digital camera'. You'll probably already have done some research and you know there are three or four models that fit your needs. So you'll probably go to the shop and say, "I want to look at cameras A, B, C and D", and then you'll go through issues like detailed features, pricing, etc. It's unlikely that the sales guy is going to sell you a fifth camera, because you've already done your homework. This happens for most big-ticket items.''
There are also marketing solutions for sales people, which Mr Legrand calls "sale solutions". "If you want to be a good sales person today, you need to know a lot about your customers,'' he says. "Platforms like LinkedIn bring a lot of intelligence for you to understand the company you're calling, the person you're connecting to, who that person is connected to, and what kind of content that person is consuming.
"Sales people can potentially leverage a common third party for a 'warm' introduction. In the world of sales, the worst thing you can do as a sales person or experience as a customer is a cold call. The way we do it is to find someone to make an introduction. So if I'm a sales person and I call you, it won't be from out of the blue; it'll be because I've been notified through your industry or through your activities on social media that you have a need. And I'll call you with something that's relevant to you.''
LINKEDIN VS FACEBOOK
People have asked, and will continue to ask: Can't Facebook (which has about four times as many members as LinkedIn) do the same thing as LinkedIn on a much bigger scale?
"I don't think so,'' says Mr Legrand. "One reason why LinkedIn has been so successful is because people want to separate their personal network from their professional network.
"Reed Hoffman, who was LinkedIn's founder, put it well - and he's an early investor in FB too. He said, 'Facebook is a backyard barbecue and LinkedIn is a business lunch'. You don't necessarily invite the same people, dressed in the same way, talking in the same manner to a backyard BBQ as you do to a business lunch. Sometimes, you have overlap; some people may belong to both circles, but a lot of people won't."
The two companies also have different missions, he adds. "Facebook's mission is to bring Internet to everybody; it's more on the personal side. Our mission is to make professionals more successful and create economic opportunities for a global workforce."
LINKEDIN'S "GRAND VISION"
There are about 750 million knowledge workers in the world, of which LinkedIn has connected about 415 million. "We're well into delivering on that mission,'' says Mr Legrand. But it wants to go beyond. The bigger mission, he says, is to connect all members of the global workforce "and make them more productive and successful". That number is a lot bigger: a whopping 3.3 billion.
So what LinkedIn wants to do is "to build the first economic graph, a digital representation of the global economy. This would include a digital representation of every member of the global workforce of 3.3 billion people, a digital representation of every company in the world, and every job available in the global market - all on the LinkedIn platform.
"We would also need to know the skills required to acquire those jobs. Thus, universities and educational institutions would also be represented on LinkedIn, which many of them already are," says Mr Legrand.
Making the most of LinkedIn
What advice does Mr Legrand have for LinkedIn members? Here are his tips:
- Get your profile right
Everything starts with the profile on LinkedIn. I'd begin by looking at how complete that profile is. Think of your profile as more than just a resume. Some people just take their resume and post it on LinkedIn. For example, they say they are a marketing director. But what future employers or business partners want to know is, "what is it that you do?" So invest time to tell the story behind the story. What does it mean to be the marketing director where you work? What work do you do? Also, share what you create, read or watch. That reveals more about you.
- Post a picture
Make sure you have a profile picture, because profiles with pictures get a lot more views and are a lot more engaged with.
- Build your network thoughtfully
You don't want to accept every invitation you receive on LinkedIn. You want to accept invitations that are relevant to you and what you are trying to achieve in your work. LinkedIn is a big data product, and as with big data, it's garbage in, garbage out.
If your network includes people with whom you're most likely to create opportunities with and engage with, LinkedIn's algorithm will pick up those people and what will come out of it is suggestions on people, content, companies, etc that are relevant to you. But if you connect with everybody, including people you don't really know and who are not going to add value to you, you run the risk of being served with different material which may be less relevant to you. So it's really important to connect with the right people when you build your network - people who may get the best big deal for your company, or get you your next job, or who will add value to your business.
- Don't accept every endorsement
If someone endorses you for a skill that you don't think is right or relevant, don't accept it. Remember to curate your profile.
In paragraph 3, an earlier version of the story stated the penetration rate for Singapore's PMETs was the highest for any country. It also incorrectly stated LinkedIn's vision was to connect “all professionals” - it should read “all members of the global workforce”. The article has been revised to reflect all the above corrections.