This social media boom will end badly, just like the dot.com boom & bust did in the year 2000″ the investment banker said. I was talking to a good friend of mine, a former master of the universe based in NYC who had kept a low public profile the last few years. “We see a lot of smart money flowing into heavy industries, machineries, packaging and other non sexy manufacturing businesses and these businesses are doing well” he continued “but it is nothing compared to the funds that fools want to invest in anything social media, they will get burnt sooner rather than later”.
Although he was right about the renewed interest in typical manufacturing businesses, I also hear from many of my C-HRO colleagues that these businesses are hiring, I told him that his views about Silicon Valley were plain wrong.
It boils down to four main themes (1) it is in the cloud (2) innovative social media is disrupting business models (3) mobile rules (4) blurred lines between business and private life.
There is something happening in the HR Tech world. In the past many promises were made and to a certain extent innovations were implemented but nothing led to real people practice transformations. It is different now.
To kick off, the cloud based core HR systems are rapidly rising in popularity. Last month I was at a senior HR conference in London and many of the attendees there told me that they were contemplating to roll out a new cloud based people management system. Reasons are simple, these systems are not only much cheaper than previous generations of people management software but also a lot quicker to deploy. Executives like that, systems that are better, faster and cheaper.
Secondly, some -not all- of the popular social media companies are disrupting the way how Talent is identified, sourced and recruited. Executives talk a lot about the impact of social media for their business but find it hard to discriminate between what works well and what is just a hype. Whereas Facebook, Twitter and YouTube are all fine channels to build an employer brand they are irrelevant when it comes to recruiting new employees, that space is dominated by Linkedin with their recruiter accounts. Same can be said for Xing for the German speaking countries and Viadeo for French and Spanish speakers.
The third movement is the quick emergence of mobile devices. According to market research company GFK the number of mobile users in a country like the Netherlands is already higher than the number of PC’s/Desktops (67% household penetration versus 65%). Mobile devices have overtaken PC’s, who could have forecasted that a few years ago? Any business that can use the mobile channel to connect with their customers will win big time, just watch at any train station or ticket line how many people are using their mobile phone while waiting for something. So all your current and future employees are using their mobile devices meaning that your HR department can’t ignore this fact when they recruit, promote, reward, dismiss or develop Talent. It is logical that a young Internet and Technology company like Groupon recruits hundreds of people via Linkedin but even established multinationals in century old industries like Shell and Unilever have discovered the power of conducting their own candidate sourcing via social media.
Also, many executives want to get People KPI’s and HR dashboards on their tablets or cell phones and some even want to conduct people transactions via these devices when they are on the road and with core systems being in the cloud all this is now possible. There is no clear distinction anymore between work and private time. Mobile devices have made these lines blurred. Five years ago we were still using BlackBerries and Nokias and we thought that Linkedin was a handy on-line rolodex and now we see that new hardware providers and above all -cloud based- software companies are disrupting many businesses and I don’t see it going bust anytime soon. The situation can best be described by the phrase that was coined by Silicon Valley investor Marc Andreessen “software is eating the world”.
Ben Van Stekelenburg, VP HR International & Global Talent Director – Groupon
Presenting at the 4th Future of Recruitment Seminar, Barcelona.