Quick – to aptly recognize Labor Day, everyone go update their LinkedIn profiles. You won’t be alone: LinkedIn membership has tripled in the past three years and now stands at about 315 million professionals, of whom two-thirds live outside the United States. The company generates revenue of more than $1.5 billion, and its market capitalization exceeds $27 billion. Its achievement is simple and remarkable: LinkedIn has transformed the marketplace for professional labor.
The Economist magazine provides a very good summary on why this is important. The labor market too often has been binary – one is either looking for work (and active on the job market), or not. Reaching people who might be persuaded to take a different job that is a better match for their skills — raising overall productivity — used to be nearly impossible. But now LinkedIn provides a clearinghouse for these workers:
LinkedIn’s main benefit to recruiters has been to make it easier to identify people who are not looking for a new job, but who might move if the right offer came along. These “passive” jobseekers, says Dan Shapero, head of sales in the firm’s talent-solutions business, make up perhaps 60% of the membership (active jobseekers make up 25%; those who will not budge for any money make up the rest).
A fluid, dynamic job market should be in everyone’s interest. Particularly interesting is how many large companies are using LinkedIn to better find and position their own employees in jobs that fit their skills. Which is something you can mention the next time your boss catches you updating your profile.