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We here at Ongig believe that the hiring world is being radically shaped.

Not to be dramatic, but we think that this will affect each of you reading this.

Towards that end, we want to dedicate our first article in this space to the 7 major reasons/trends that will contribute to this new hiring/jobs world.

1) A Hire Is A One Million Dollar Transaction…So Let’s Give It Some Love

We believe a hire is the most important transaction an individual or employer can make.

In fact, we put a number on it: $1 Million…as in, each hire in a business is worth one million dollars (you may have noticed that Facebook’s own Director of Corporate Development Vaughan Smith recently told the NY Times “Engineers are worth half a million to one million.”)

Let us use some data to explain:

  • The average high tech worker in San Francisco (who makes $123,500 per year), wants a secure job for 5 to 10 years – that’s $617,500 to $1,235,000 in income.
  • A typical tech employer in San Francisco will invest around $1 million in one worker over a 5 year period (counting salary, benefits, office space, hardware/software, etc.)
  • If an employer is raising financing, a single hire could impact the valuation of a tech company by multiple millions of dollars.
  • For an employer, according to Topgrading research, the cost of a mishire is 13 times the worker’s annual salary! – so if you make a mistake on a $77,000 salary hire, that could be a $1 million mistake!

Kayak.com CTO Paul English adds that a worker could be even more valuable:

“The difference between an A player and an A-plus player,’’ he has said, “is the difference between a million in revenue and a billion in revenue.’’

Despite the fact that a hire is worth around $1 million to both the candidate and employer, the majority of job postings really stink!

2) Your Hiring Manager Needs To Show Himself!

The single most important factor in your job is your manager. That’s who’s will (hopefully) have your back.

Yet many job postings don’t show you who you would work for.

For example, we looked at numerous San Francisco tech market job listings on Craigslist (and we love Craigslist!) and couldn’t find a single one that told you the name of the manager you would work for.

For this reason (and others mentioned below),  we believe that within three years looking at a job ad on Craigslist will be similar to using the Help Wanted ads in a print newspaper today.

3) The Power Is Shifting From The Employer To The Individual

As a society, the power shift from organizations to individuals continues at a rapid pace.

Individuals and small groups can have a larger impact than ever because of the Internet & mobile technologies.

Take Wikileaks: A single individual in the military and a programmer can expose confidential correspondence impacting major counties across the planet…with a couple of computers and Internet access!

Transparency Is A Game-Changer

At the same time, transparency is becoming the name of the game.

When you want a $10 lunch, you can rely on Yelp to show you photos of the restaurant (and dishes!) you desire as well as what other individuals think of it.

We expect job information to be the same.

Employers will need to be more transparent about such items as:

  1. Salaries
  2. Team members
  3. Strategic priorities

We applaud GlassDoor (screenshot above) for providing visibility into employer ratings, interview stories and salary information.

Pull Versus Push

Some call this power shift “pull”: as in, we are now pulling more information to us than relying on others to push it to us.

Take video programming.

We now pull down our videos from Netflix, iTunes and satellite TV; whereas just 10 years ago we relied on big networks (CBS, NBC, ABC et all) and movie studios to push the programming to us.

In the world of information retrieval Quora is a great example of pull – you ask a question and get alerted (in your email) when there are answers.

Most job information is still pushed out through Craigslist, Monster, CareerBuilder and corporate jobs/career Web pages.

The winning job information providers are going to let candidates pull the relevant information to them based on data they have already shared (such as their job history or location or tags).

4) Video & Pictures Are Ubiquitous

We see pictures and videos just about every time we evaluate a transaction online: whether it be when we’re at Amazon, Netflix, Apple.com, Yelp and especially when looking at a larger transaction (hotels, cars, homes, etc.).

We listen to short song samples on iTunes before we purchase.

Shouldn’t job opportunities be the same?

Shouldn’t you be able to see, hear and feel that job opportunity.

Especially when each job is a $1 Million transaction!

We think so.

Some employers (like Sharethrough in the clip above) “get it.”

5) Job Opportunities Will Become Alive

The average technology job in San Francisco takes about 60 to 90 days to fill on average.

During that 60 to 90 days, much about the job changes.

For one thing, interested candidates start inquiring about the job (either by applying or perhaps asking questions).

Even the office location of the job could change as we saw when the city of San Francisco recently evicted hundreds of companies from Pier 38.

Despite the fact that job opportunities are living/breathing things, most job postings are static – there is nothing that changes from day 1 of the job to day 75 when it gets filled.

There are exceptions: Ongig loves the fact that Freelancers Union posts the number of times each job is viewed and how many people have applied.

We believe job opportunities will become much more alive in the future.

6) We Are Now All A Click Away From Each Other (Or “Referrals On Steroids”)

The social graph (Facebook, Twitter, LinkedIn, etc.) is here to stay; and job searches/placements will never be the same.

Referrals continue to be the most effective way for people to find jobs.

And when you cross a Facebook/Twitter/LinkedIn-type social network with job opportunities, you get “referrals on steroids.”

People trust their friends and colleagues over anyone – so where do you think they’ll go first for finding a job?

Will it be Facebook/Twitter/LinkedIn or some face-less listing of job postings?

Our money is on the social graph.

Because the social networks provide access to their data to other Web sites, the leading job posting Web sites will be those who can leverage the data from the social networks.

7) Third-Party Recruiters Will Go The Way Of Other Middlemen

This brings us to third-party recruiters/staffing agencies, who often make 20% of a job candidate’s first year’s salary (paid by the employer) for recruiting candidates to a job.

Will third-party recruiters go the way of stock-brokers like Bud Fox from “Wall Street”?

We believe that the above changes to the world we mentioned — social graph, transparency, the shift from “push” to “pull” and other factors – will cause third-party recruiters to go the way of other middlemen such as travel agents and stock brokers.

Afterall, when is the last time you called your travel agent for a flight or your stock broker to invest in stock?

Don’t get us wrong: recruiters (especially the numerous excellent ones) aren’t going extinct any time soon.

In fact, it was the recruiting firm CyberCoders that could afford to advertise the largest number of job ads (673!) in San Francisco in August, according to the Employment Development Department of California (second place went to Kaiser, followed by Deloitte, Salesforce and IBM).

But if you look at many of the jobs that recruiters like CyberCoders advertise on Monster and LinkedIn, you will see they often lack the following:

  • Name of the Employer hiring
  • Name of the Hiring Manager
  • Social connections into the job opportunity

In the future, will a quality job candidate be willing to jump through the hoops of talking by phone or via email with a recruiter when they have so little visibility/transparency into the job…especially when the employer could be a few clicks away?

And how about the employer?

Let’s take Salesforce.com, for example – the 4th largest job posting marketer in San Francisco.

Will Salesforce want to pay $20,000 to an outside recruiter for a $100,000 per year engineer when Salesforce can click a few buttons and get their army of employees and customers to market the job for them (for a few thousand bucks at most)?

We believe third-party recruiters will see their businesses rattled by the democratization of referral fees and recruiter commission fees.

So, who survives in the third-party recruiter world?

The many excellent, trusted third-party recruiters will continue to propser based on their reputation alone.

Third-party recruiters who specialize in high touch-point recruiting  (e.g. large business C-level hires) or team/project-hring (e.g. if an entire IT security team needs to be hired to deal with a major security breach) will also still do well.

And those recruiters who can effectively navigate the social graph and other technologies will prosper.

And, of course, the Internet-based systems that automate referral/commission fees for hiring transactions will also thrive.

However, we believe a large number of third-party recruiters — the ones who aren’t the very, very best or niche specializers — are doomed for failure.

Until Next Time

So, to recap, there are 7 major reasons/trends that we believe will disrupt the hiring world. They are:

  1. A Hire Is A Million Dollar Transaction
  2. Hiring Managers Need To Show Themselves
  3. The Power Is Shifting From The Organization To The Individual
  4. Video & Pictures Are Ubiquitous
  5. Job Opportunities Will Become Alive
  6. We Are All Now One Click Away From Each Other
  7. Third-Party Recruiters Will Go The Way Of Other Middlemen

We look forward to working hard alongside the great companies out there in helping to reshape this new world of hiring.

Thanks for reading!

by in Hiring