The Use of Social Media in the Recruitment Process, Capstone Project Example

Introduction

The landscape of the recruitment industry today is different from the one ten years ago. Most recruitment agencies work with a sophisticated online platform, and try to create applications that serve their clients the best. This means that they are focusing on maintaining a high number of quality applicants, use tracking systems to keep in touch with companies and applicants, and even complete employment related checks online. These technological advancements can increase the competitive advantage of a recruitment agency, however, developing a comprehensive system to collect applications, match clients’ requirements with applicant profiles, and make use of social media requires an already large client base and substantial investment (Boughton et al.). This indicates that larger recruitment agencies have a technological competitive advantage over smaller firms. The below paper will focus on this issue in order to highlight the potential solutions for smaller agencies to develop their own platforms that cam compete with large companies’ applications.

Problem Statement

Larger firms have several advantages on the marketplace, compared with medium sized or small businesses offering recruitment services. The 2010 Global Recruitment Market Report (Koncept Analytics, 11), the U.S. recruitment market size decreased between 2008 and 2009, due to the economic crisis. Companies were hiring fewer employees, and became more cost-conscious. This created a greater disadvantage for smaller companies, especially those specializing on one industry, or personalized services. They were unable to maintain their service level, and lost more customers than large firms.
The same report (Koncept Analytics) identifies some trends that further increased the gap between smaller and large recruitment firms’ competitive advantage. In 2008, the three major staffing firms: Adecco, Randstad, and Manpower had a revenue share of over 75 percent. (Koncept Analytics, 28). The shift towards larger firms can be explained through the market demands, detailed by the latest report of Recruiter.com. Customers’ demand for more automation, better integration between their own systems and the recruitment software, and job performance prediction disadvantages firms that do not already have, or cannot obtain the technology to serve clients’ needs. All three large companies have taken advantage of the digital recruitment strategy. According to the definition of the 2010 Global Recruitment Market Report (Koncept Analytics, 33), it is a strategy a recruitment agency uses: “a holistic integration of its brand strategy, business models, and processes, and information technology to accelerate its business”.

In order to keep up with the above described strategy, smaller recruitment firms also need to engage in similar innovative projects, but in a more cost-effective way. The below literature review will examine the opportunities open for smaller firms to make online recruitment and information technology create competitive advantages for them, at a lower cost.

Literature Review

Ghazzawi and Accoumeh (169) found that recruitment firms need to perform e-recruitment services in one or more ways, in order to maintain their competitive advantage. The empirical study created by the authors has confirmed that “recruiters should be all over the Internet looking for qualified applicants; also use social media networking to find the best and brightest candidates” (Ghazzawi and Accoumeh, 169).

This means that companies also need to ensure that they engage with their potential candidates and customers over social media in a cost-effective way (Boughton et al., 20). Considering that this method requires a low capital investment, and can target different sub-niches, it is possible that for smaller firms, this approach can deliver both growth and higher reputation. While the majority of smaller firms are unable to set up advanced per-selection and pre-screening systems, similar to Monsters’ website, or other large platforms, they can deliver cost-effective applications, such as online questionnaires and surveys to manage their pool of talent and customer base.

Given that the recruitment consultancy market has shrunk during the recession, it is advisable that smaller firms focus on differentiating themselves on the marketplace, and create a unique brand image, to attract the right type of customer. This approach is an effective way of increasing not only brand reputation, but effectiveness, as well. Focusing on the customers the firm can effectively and successfully serve will result in higher customer satisfaction.

Differentiation as a method of achieving competitive advantage in the services industry has been reviewed by Gebauer, Gustaffson, and Witell. The authors mention a few findings that are extremely relevant to the current model. First, the report states that service companies that deal with complex customer needs have to adapt a customer-focused model. The latest Recruiter.com report (17) confirms a related industry trend: “customers are asking for more customized solutions and access to data based on the customized efforts”. Given that implementation of automatic customization features into existing software and platforms is problematic, small and medium sized businesses have an advantage over large firms. While small firms have a disadvantage based on their availability to create automatic recruitment and screening systems, they can serve the sub-niche of customers that are looking for tailored, customized, and industry-specific services. Therefore, instead of trying to serve all industries, and all types of customers, companies need to focus on those firms that can be served better by a specialized firm.

Several opportunities lie in different industries where information technology has little or no use. In case of customer facing roles, it is not possible for Monster to create a role play video interview for all applicants for the job. A smaller firm, however, can – focusing on the client’s specific requirements – create a video interview that can be recorded, so decision makers can review the abilities of applicants related to the role advertised. This is, however, only one application of the customer-focused approach.
The next method that the article (Gebauer, Gustaffson, and Witell, 9) mentions is to involve customers in service delivery and seek feedback on existing services. The authors state that many firms are happy to pay extra for services that match their needs more than the competition’s. The article also finds that making customer-centric marketing investments, instead of focusing on the general market can improve the financial performance of the firm. Given that several cost-effective collaboration, file sharing, and conferencing tools exist today, from Skype to Google Talk and Cloud storage, smaller recruitment firms can create a customer focused marketing and branding project, seek feedback, and realize a higher return on investment (ROI) for their project than large recruitment agencies investing in automating their websites.

Ehmke (5-1) defines competitive advantage as: “an advantage gained over competitors by offering customers greater value, either through lower prices or by providing additional benefits and service that justify similar, or possibly higher, prices”.

The authors mention several ways businesses can differentiate their offerings on a highly competitive marketplace. The dimensions the author of the current study has picked for a framework of increasing effectiveness, market share, and competitiveness of smaller recruitment agencies are: operating procedures, value-added services, and customer experience.

While it has been determined that smaller firms lack the funds to create information technology systems that automate processes, this disadvantage can easily be turned into a competitive advantage through implementing one ore more of the above methods of service differentiation.

Recommendation To Create Competitive Advantage

The above review of business environment has revealed that three quarters of the global recruitment market is today controlled by three of the largest companies. This makes expansion, growth, effectiveness development of smaller firms challenging. However, the above literature review of competitive and differentiation strategies has shown a path for improvement, which requires little or no investment, makes use of freely available social media and collaboration technologies, and adds value to the services through implementing a customer-focused approach. Still, in order to ensure that the company targets the right type of customers, it needs to complete a market analysis, to identify the gaps in the market it can fill with its offerings. Finding out reasons why companies would decide not to use large firms for their recruitment needs would reveal a large number of opportunities.
Increased effectiveness, active engagement with customers, and seeking feedback will evidently result in higher market share, and added value, which, in turn, will increase the revenues of the firm.

Works Cited

Boughton, A., Foley, B., Ledermaier, S. and Cox, A. ”The use of social media in the recruitment process” ACAS. 2013. Web. http://www.acas.org.uk/media/pdf/0/b/The-use-of-social-media-in-the- recruitment-process.pdf

Ehmke, C. “Strategies for Competitive Advantage” 2009. Web. https://ag.arizona.edu/arec/wemc/nichemarkets/05competitiveadvantage.pdf

Gebauer, H., Gustaffson, A. and Witell, L. “Competitive advantage through service
differentiation by manufacturing companies” Journal of Business Research, (64), 12, 1270-1280. 2011. Web. http://dx.doi.org/10.1016/j.jbusres.2011.01.015

Ghazzawi, K. and Accoumeh, A. “Critical Success Factors of the E-Recruitment System” Journal of Human Resources Management and Labor Studies. June 2014, Vol. 2, No. 2, pp. 159-170. 2014. Web.

Koncept Analytics, “Global Recruitment Market Report: 2010 Edition” 2010. Web. http://www.catenon.com/inversores/pdf/Global-Recruitment-Market-Report- 2010.pdf

Recruiter.com “Recruiting Technology Trends 2013” 2012. Web. https://www.recruiter.com/recruiting-technology-and-recruiting-software- trends.pdf