How LinkedIn Makes Money Off Your Resume — And Why That’s Good For You

Today LinkedIn serves hiring managers as much as it serves job seekers. Companies are paying big bucks for the right to look at your profile, whether you’re on the job market right now or not.

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Photo Illustration by Justin Sullivan / Getty Images

Everyone knows that they’re supposed to have a LinkedIn profile. We all have a vague awareness that it might somehow help us get a job some day. What you might not know is that over the last several years LinkedIn has quietly redefined  the nature of job recruiting. Today it serves hiring managers as much as it serves job seekers. Companies are paying big bucks for the right to look at your profile, whether you’re on the job market right now or not.

LinkedIn has undergone a subtle but significant transformation under the leadership of Jeff Weiner, who took over the company in December 2008. In that year, the company launched LinkedIn Recruiter, a premium service that allows businesses to view and search through every single profile on the network.

Recruiting through LinkedIn, once used mostly in the technology sector, has gone mainstream — 82 of the companies in the Fortune 100 use LinkedIn Recruiter, according to LinkedIn spokesman Richard George. More than 10,000 companies worldwide use some of LinkedIn’s recruiting products and services, dubbed Hiring Solutions. “Hiring Solutions is now our largest and fastest growing business line, which I think kind of illustrates the market demand for what we can offer companies,” George said.

The influence of LinkedIn recruiting has reached companies both big and small. Aaron Aders, the CEO of search engine optimization consulting company Slingshot SEO, said all the recent hires at his 100-person organization have been found through LinkedIn. “We basically haven’t even used our recruiter for the last year,” he said. His company reduced its expenses per potential hire from $7,000 to less than $1,000 by eliminating expensive recruiter fees. “It’s absolutely necessary,” Aders said.

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What’s a value proposition for businessmen like Aders is a financial boon for LinkedIn. The company charges as much as $8,000 for a log-in to its Recruiter program, and big companies pay for dozens of accounts. Now the biggest money driver for the company, Hiring Solutions brought in $103 million in revenue in the first quarter of 2012. Premium subscriptions, which the everyday user is more familiar with, pulled in only $38 million in comparison.

As Facebook and other social networks struggle to maintain user privacy, LinkedIn draws a userbase that actively wants its information put in front of the right eyes. And as the number of users grows — it currently sits at about 161 million — so too does its monetary value.

David Marr, a recruiter who has worked with Fortune 500 companies, has watched the industry change dramatically in his nine years in the field. He said job boards and cold calls to potential hires were heavily used before LinkedIn. Today the social networking site is his primary tool.

“It definitely makes it easier to communicate with people,” he said. “It allows the communication channels to flow broader. It’s viral.”

Most critically for potential job seekers, both Marr and Aders noted that they don’t only use LinkedIn to find people actively seeking jobs. They’re also looking for qualified people who aren’t job hunting.

“The most valuable employee is typically one that already has a job,” Aders said. “So the nice thing about LinkedIn is even if people are currently working, you still have access to their profile. We call it having a deep bench — having a list of people for key positions in our company so that if someone’s let go or they’re transitioning, we’ve made some contact with [people] that we can call on and possibly pull the trigger on to hire.”

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This recruiting tactic of seeking out “passive candidates” has changed the very nature of the job search. Marr said the currently employed are much more receptive to a LinkedIn connection than a cold call. “When I’m identifying the talent, I’m networking with them,” Marr said. “It doesn’t necessarily mean they’re interested in the role, but I’m having conversations and engaging in dialogue about what their interest might be for future opportunities.”

For recruiters, every LinkedIn member is a potential employee, and today’s workers are more likely to keep their eyes on opportunities in a volatile job market. Increasingly, the passive job search has become an ever-present part of working life. “You have to plant your seed today for your harvest tomorrow,” Marr said. “The days of working for a company for your entire career, for 50 years, isn’t realistic anymore. While it still exists, the average life cycle is 18 months in a position. If you’re not growing, you’re going to be looking for the next place where you’re going to grow.”

To harp on an old point, having a LinkedIn account isn’t just a good idea — it’s becoming the primary point of information exchange on the job market. But as LinkedIn’s prominence in the professional world grows, so too does its responsibility to protect its users’ virtual identities. In June six million users’ passwords were stolen, and the New York Times reported that the passwords were only lightly encrypted.

But the users will keep rolling in, and the recruiters will keep finding them. As Marr says, “If you’re not on LinkedIn and you’re not using LInkedIn as an avenue to connect and follow and really be informed, you’re really doing yourself a disservice.”

15 comments
Realpearl7
Realpearl7

Great article. Thanks for sharing this great and informative post with us.

Mil_gen
Mil_gen

Since graduating college in December of 2010 I've had two jobs. Both were through LinkedIn. I am still working at the second one and have been for almost one year now. I am trying to get my unemployed friends to join LinkedIn and actively use it but they won't; Their lost. I love LinkedIn and even though I am employed and I like my position a great deal, I still log in and look around just to keep up with what the market looks like and to see if there is anything else that I would rather being doing or could be doing. 

CoreyTrib
CoreyTrib

I just happen to be Mr. Marr's colleague-except I work at a large media company.  So far this year, LinkedIn has enabled me to hire a Front-end Development Director, and coincidentally, a SEO/SEM Manager.  LinkedIn has done wonders on sourcing passive names and took the mystery out of guessing games. 

LinkedIn Recruiter console has become a necessity and will be proven useful time and again. 

Scotty_A
Scotty_A

This article is not realistic. 18 months is how you become unemployed regardless how good you are. I pass over hiring people who I know won't be around after a while. At least 4 years is normal, and even then you are just entering a new stage provided the company keeps its bargain and gives decent raises (i.e. above the paltry 1-2% inflation). It is fine to have the odd job that did not pan out, but don't expect to be taken seriously if you bail out in 2 years or less all the time. I find it sad that many companies do not do technical promotions and only look to give new employees salary increases. Most companies are average and not special places to work.

Guest
Guest

There are a lot of fake recommendations, experiences, etc. on LinkedIn.  I can create a linkedin account that bring tears into your eyes.  Looking for a job? Send your resume directly to the company.  If you qualify, they'll call you.  If you don't, they won't.  Simple as that.  LinkedIn s for those that haven't learned such simple concept. 

Guest
Guest

Just another evil place on the interwebs.

thesparky1
thesparky1

I wonder how they feel about fake listings.  I use it to get access to people on which I need to spy.  Nothing illegal, just wanting to know if they are looking for another job while employeed at a business I know.   I use an email address I use for all listings such as that.  I get all kinds of canned messages that all go like, "Hello, I'm Meagan, a recruiter for  (insert any company name), I saw your Linkedin page and we want to talk to you about (insert any job.)

rocket_pants
rocket_pants

I was recently looking for a job and joined LinkedIn for about a month before I deleted my account.  I absolutely hated the experience.  Most annoying was the fact that it kept spamming everyone I had ever emailed for 10 years, including ex-boyfriends.  I dug through the settings but they made facebook's look simple.  I only had a handful of contacts in my industry and no new job postings.  I ended up getting my job by submitting my resume to every consulting firm in town.  As a millenial, it seemed like a facebook alternative for the older generation.  I found the LinkedIn experience to be useless for my job search and the intrusive marketing to be offensive. 

telesia
telesia

Reply to Cara: Excellent post, and one that should be repeated... often.

Li Wright
Li Wright

I'm a minority and my picture is at Linkedin.  It took me awhile to put it up there, because I didn't want to be "prejudged" if you know what I mean.  I see a lot of hits to my profile, but no one has contacted me.  

Adam Jaster
Adam Jaster

If you are so worried... what happens when you show up to an interview? Do you wear a mask

Christina Smith
Christina Smith

What you are missing is that, with a picture on LinkedIN, Adam is concerned with being prejudged and NOT even getting in the door for an interview.  Of course he wouldn't "wear a mask," that is a ridiculous statement.  Once he - or any minority/protected class of persons - is the door and granted an interview, he can sell himself and the interviewer can make his/her choice based on the interview experience.  

It is much harder to do that when you aren't even let in the door in the first place because someone has looked at your picture and decided not to give you a call.

Cara Posey
Cara Posey

LinkedIn is your online resume. It helps you stay connected with people who are a virtuous circle...and may help you in your career. It gives you a marketplace to connect with recruiters who are looking for people just like you, but perhaps they didn't know you personally and you didn't know about their job opportunity.  I think we can all probably agree on this.

What LinkedIn is not is a company's resource to showcase their people.  Because of the inherent personal nature of LinkedIn and the way people are using it, companies need to be aware that unless you are recruiting, you may not get the results you are looking for.  There are better options out there to help companies showcase their achievements and make their own connections.  Similarly, there are better options out there for individuals who want to showcase their work and expertise in a more dynamic fashion, hence why so many individuals have their own websites, write books, etc. 

LinkedIn has become a necessity to be relevant in today's market. But it's still only one tool in the shed to help show the world who you are as a whole person or as a whole company.  With sites like Facebook and LinkedIn right now, they sometimes try to be everything to everyone (think Facebook email amp; jobs postings; LinkedIn corporate pages.)  Given this, we as consumers have to be mindful of what each platform does really well and where they are lacking.