The Facebook fallout and what it could mean for HR.
By Michael Beygelman
Facebook’s recent IPO put the company in a spotlight, albeit a very different kind of spotlight from what it has enjoyed historically. Since inception, Facebook has had a profound impact on the social aspects of life and activities of people using its service. It allows people to stay in touch with friends, family, and acquaintances as long as they have access to the Internet.
Some argue that Facebook is beneficial to one’s social life because a person can continuously stay in contact with his or her friends and relatives, while others say that it can cause increased antisocial tendencies, because people are not directly communicating with each other. But what we do know for sure is that this service has ushered in a new era of transparency the likes of which we have never seen before.
The speed with which information can go viral on Facebook is extraordinary, because the moment something is posted, it can be shared and accessed by people all around the world. Transparency in the Facebook age has become the de facto standard, but Facebook’s leaders never imagined that the very transparency culture they helped create could wreak such havoc on their own company.
In recent weeks, billions of dollars of wealth have been obliterated, and notably a good portion of this wealth came from the pockets of Facebook faithful users, which has left some of them disenchanted with the service they have grown to adore. “Scorned investors filed a proposed class-action suit in federal court against Facebook, Morgan Stanley, Goldman Sachs and other underwriters of the IPO. The plaintiffs argued investors had lost more than $2.5 billion since the company went public and were not informed of the trim in revenue expectations,” reported thehill.com. The allegations are that Facebook and its bankers were not very transparent about the company’s prospects in an effort to boost the IPO share price.
Could such a debacle burst Facebook’s transparency culture bubble? And how would a shift in behavior to spend less time engaged in social media affect talent acquisition strategies?
Many questions will remain unanswered for a long time, but what we know for sure is that Facebook is not LinkedIn and it is certainly not Google. Fundamentally, Google enables its users to search for products, services, and information and then to be connected directly to what the user is trying to find. Its success boils down to the simplicity of the service Google provides and how it is directly integrated into how Google makes money. On the other hand, Facebook is more like a reality TV show where the potential revenue model—advertising—detracts from its users’ experience, not enhances it. And the user experience is less tightly correlated to the advertising that is served up, so advertisers are less likely to advertise.
Then there is LinkedIn, which like Facebook has its roots in social networking. LinkedIn, however, turned its social network into what is today basically a job-hunting and recruitment site—anecdotally a Monster killer. As reported in CNNMoney, “LinkedIn took the old adage that social media isn’t a destination but a feature directed at a specific strategy. In doing so, it found a market it can serve for years, while Facebook invested billions in a platform that could be irrelevant tomorrow.” Facebook basically built its success catering and listening to people under the age of 25, and in a single tweet Facebook can virally slouch toward irrelevance.
LinkedIn is the social-media version of an old fashioned printed CV, while some claim that Facebook is more akin to the high-school cafeteria, where you worry about whose table you sit at, who will eat with you, or better yet who you don’t want to eat with. Both companies offer situations rooted in emotion, because that’s how social networks are fueled. The difference is one of these social networks is where people go to grow up, while the other is where grown-ups go to advance themselves. If nothing else, at the present, investors appear to be more interested in LinkedIn than Facebook.
HR and recruitment organizations should not quickly dismiss these developments in the capital markets. Social media recruitment strategies take time to develop and capital to execute. To some extent, as an HR leader, you will be charged with making a bet on what the future of social networking will hold, to ensure that your company is positioned well to benefit from these new mediums. Betting the house’s money on a strategy that is largely dependent on the winds of emotion is a risky value proposition.
We could be witnessing the first tangible evolution of social networking or just a bad couple of weeks for a new IPO. When contemplating social networking and how that ties into your overall talent acquisition and management strategy, ask yourself about the kind of people you want in your company’s social network and find the most appropriate media that align with your organization.
Michael Beygelman is president of RPO Solutions at Adecco North America. He can be reached at firstname.lastname@example.org.