Disintermediation

In my last article for the Electronic Recruiting Exchange, The Birth of an Infosphere, I wrote about three aspects of the Web revolution: disintermediation, the ASP (Application Service Provider) model, and business exchanges. Let’s look more closely at “disintermediation.” Disintermediation means giving the consumer direct access to information, products, or services that otherwise would require an intervening party. Wholesalers, retailers, travel agents and stockbrokers are all in one way or another intermediaries. Disintermediation is the process of bypassing these middle parties. Disintermediation is made possible on the Internet because buyers and sellers are all on one network. The Web levels the information playing field. All information in this immense meta-database is, in principle, equally accessible; there are no barriers to the free flow of information. But does the Internet eliminate all the intermediaries?or does it force them to provide value in new and different ways? Under the pressure of disintermediation, for example, stockbrokers have had to reinvent themselves, transforming either into discount brokers or high-end investment advisors. Infomediaries Those who intervene between the user and the source of the information are information intermediaries, or “infomediaries.” In the recruiting information chain, infomediaries can be job boards, third-party recruiters, recruitment advertising agencies, newspapers, the corporate webmaster, and even the corporate recruiter. These infomediaries should add value, either by increasing the efficiency of the information transfer or changing the quality of the information. Otherwise they risk being disintermediated. <*SPONSORMESSAGE*> In traditional recruiting, newspaper classifieds performed the majority of the work in transferring information about hiring needs from corporations to job seekers. Classifieds were measured and valued according to their reach and demographics. Recruitment ad agencies brokered the information transfer, since they had access to information concerning classified rates, reach and demographics. The Internet solves the information distribution problem addressed in the past by newspaper classifieds: the Internet is its own distribution mechanism. The corporate website Careers Section provides jobseekers with direct access to information concerning the company’s employment needs. A jobseeker can evaluate the job positions, review the company and enter into direct contact with it. The corporate Careers Section is a self-serve environment; the intervention of a third-party information broker is effectively eliminated. Job Posting Providing jobseekers with real time online job information is a tremendous information task for a recruiter. The early years of Web publishing required arcane knowledge possessed only by the corporate webmaster, which formed a bottleneck in the information flow. Job-posting technology now puts the job posting function in the hands of the recruiter, and cuts out the corporate webmaster as another non-value-added infomediary. Job posting technology was perfected early on by the job boards. The job boards?many of which were started by newspaper and media companies to defend print media revenue?knew that they had to provide a value-added service, since they are infomediaries between employers and candidates. Their response has been job posting technology and a massive investment in branding. But corporations no longer have to go to a job board for posting technology. Now job posting technology is well within the reach of the majority of corporations, particularly with the rise of ASP Hiring Management Systems (HMSs) that power corporate Careers sections. For companies with a strong employment cachet, paying for the candidate-sourcing, job board brand may not be needed. Large corporations are now quite successful at generating their own candidate pool by communicating directly through their corporate website Careers section. With corporate recruiters and hiring managers handling the job posting themselves, and candidates finding that information in a self-serve environment in a corporate website Careers Section, there is the potential for unprecedented amounts of information flowing directly between candidates and employers. The recruiter, though, has to be ready to handle this volume efficiently. State of the art hiring management systems with unified front-end and back-end functionality put powerful technology in the place of the infomediary. The established intermediaries including third-party recruiters, job boards, and recruitment advertising agencies need to understand disintermediation and continue to add value to the recruiting process that is more than just the passage of information.