Not long ago I “linked” with a recruiter on Linkedin.com, only to find that he had precluded me from seeing his network contacts. I questioned him about this Internet faux pas, and, not surprisingly, he replied that, as a recruiter, he had to protect his asset: his contact list. This behavior seemed a bit ironic considering that Linkedin.com is a Web 2.0 website.
The idea that recruiters can maintain exclusive control over their networks is increasingly unrealistic. There are a couple of different factors behind this. First, the Intranet and Internet of the HR world are merging. This is leading to the more liquid flow of CVs between Internet sites and internal systems of recruiting companies. Second, the Internet is becoming Web 2.0. This is empowering Internet users, often job candidates, to manage and control their own professional information (i.e. CVs), and encourage the flow of this information among websites and recruiters of their choosing.
IDC predicted that U.S. spending on automated hiring software will rise from an estimated starting point of $750 million in 2006 to $1.7 billion by 2009. This spend will benefit vendors such as Bullhorn, an interesting case study. With Bullhorn’s software, a recruitment firm can create an open position, then use their “Dragnet” feature to pull candidate resumes (or CVs) from places like monster.com and careerbuilder. These resumes are parsed, written into the Bullhorn database, and then matched against the open job, ranked by suitability. Recruiters can then email or contact the candidates about the open position.
Let me summarize: Bullhorn’s software sits in the recruitment firm’s Intranet, and reaches out into the Internet for job candidates. It pulls those candidates back onto the Intranet and then turns them into a CRM (Intranet) task. It gets more interesting still: Bullhorn utilizes software from Resume Mirror, owned by Talent Technology (staffed with upbeat employees, it would seem). Resume Mirror’s software performs resume parsing – and is compliant with HR-XML. HR-XML is a standard for both Internet based HR information (jobs, resumes, and CVs) and for Intranet information regarding billing and staffing. Oh, and by the way, monster.com is one of many members of the HR-XML consortium. That is, CVs and resumes are becoming standardized data -- data that can easily flow between the Intranet and Internet world of recruiters, job boards, and companies in the liquid HR market. Reiterating Point 1: The Intranet and Internet are merging in the HR world.
Point 2: The Internet is becoming more open and user-controlled with Web 2.0, and social networks are driving this openness. The Web 2.0 buzzword was already getting old in San Francisco two years ago. We’re now on the second slope of the S-curve – companies are gleaning real, not imaginary, benefits from Web 2.0. Xing.com, a business networking company, has successfully gone public. Facebook is well known as an open platform with support from many application developers. A host of networking sites are standardizing to the Open Social API, and also creating additional "application programmer interfaces" (APIs) – they’re opening up access to data about their users to other websites. 
The benefits of this are not imaginary: Plaxo has utilized Linkedin's API to balloon its active user base, and there are recent rumors that Xing might buy them for it.
Can you imagine a recruiter that grew its base of contacts from 200,000 to over 1,000,000 in 1 month? I can't. Yet.
Where did Plaxo get this information? By getting current members to invite new members via an API from places like Linkedin and Yahoo address books. That is: by taking advantage of an open stream of data about people. What's the impact? Plaxo can garner contacts far faster than recruiters who choose to be exclusive. More importantly, professionals know that if they create an image of themselves and their professional network on a site like linkedin, they can transport this image and network to other websites. Candidates will feel less inclined to type that information into a recruiter's website, and more inclined to tell the recruiter: "Get with the program. Integrate your website via an API like Open Social or get my details from my online profile somewhere. I don't feel like typing it into your website."
One issue that has long plagued candidates is that of managing their own data on a multitude of corporate websites, including websites of recruiters and hiring companies. Traditionally, every time candidates wanted to apply for a job, they would have to key in or upload their CV into a company or recruiter's website, at which point they began to lose control over that information. Social networks are member-driven websites that members often visit; members have total control over their own information, and actively maintain it. This contrasts with recruiter websites, where members create a profile once and are then inclined never to return - particularly once they find a job.
Interoperability among social networks via standards and APIs ultimately gives users that much more power to control and encourage the flow of their own data. If you add recruiting and job posting capabilities on these websites (as Linkedin, Xing, Jobster, Liquid-CV and many others have already done), you begin to solve the woes of the candidate who cannot or does not want to manage his or her own data on yet another recruiter's website. Furthermore, social and business networking sites integrate features such as professional references into the online job hunting arena, which are crucial for many recruiters.
What does this mean? It means that for job candidates, it's easier to use online social and business network websites to manage their own professional data and networks. It means that recruiters can improve their performance by using one platform for both CV browsing and reference checking.
Recruiters are already online, and not just entry level recruiters: executive recruiters are online as well, and beginning to adapt to the Web 2.0 social networking environment. Though there is still debate about the quality of online candidates, social dynamics (references and personal networks) are being used to pre-filter candidates, and various websites have developed that cater to niche and more senior professionals, like asmallworld.net and theladders.com. 
How long before these sites develop a way to maintain exclusivity and high standards while leveraging the Open Social and other API data exchanges? Not long. Consider the case of new upstart Notchup: candidate users import their profiles from linkedin to get started. Notchup's business model is built around passive, high-quality candidates who companies will actually pay for an interview.
The impact upon recruiters
All of this means that the traditional recruiter's world of closed databases is shrinking, and in some cases, ending. Recruiters are becoming power-users of social and business networks, rather than proprietors of their own candidate databases. Companies like theSkillsMarket have been working on the Intranet side of business to improve the flow of data among recruiters, and are discussing the launch of more Internet (Web 2.0) facing features. Recruiters are beginning to understand that tapping into this open data exchange -- the flow of CVs and resumes -- can vastly increase their pool of candidates (remember Plaxo), and that the focus will shift from the acquisition and retention of basic candidate data to acquiring deeper information about candidates, and matching candidates to jobs.
This is a positive development: it means finding jobs faster and making a better match with hiring companies. It means some recruiters will have the opportunity to truly add more value to the process, as people who can read deeper into CVs, understand candidates, as well as the jobs for which they are applying. But those that wish to horde a list of job-seekers will increasingly be left out in the cold.
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