How LinkedIn acquisition reinvigorate human resources

Microsoft will attempt to transform how companies recruit talent and manage people.

When Microsoft said in June that it was acquiring LinkedIn for $26 billion, the mammoth deal was seen as the lynchpin of a sweeping effort to reinvent the workplace. With the European Commission giving the merger its approval this week, the transaction is expected to close before month’s end. Here, in this second article of a three-part series, the combined companies’ plans for transforming how companies source talent and manage people are examined. The first piece in the series can be found here.

In terms of human resources, LinkedIn CEO Jeff Weiner describes the integration of LinkedIn’s more than 433 million members with Microsoft’s1 billion-plus information worker user base as “a massive business opportunity and an entirely new one for Microsoft.”

Acquiring the world’s largest professional social network gives the software giant a wealth of data about professionals, their jobs and the organizations for which they work. When that’s combined with the routine data that Microsoft’s business clients already collect about their employees—such as birth dates, home addresses and social security numbers—Weiner contends that Microsoft will be able to provide HR insights and synergies that no other company can provide.

Corporate recruiting is a prime example. “Recruiters already make extensive use of LinkedIn’s network,” notes Sheryl Kingstone, research director for business applications at 451 Research. But incorporating LinkedIn’s social graph into Microsoft’s Office Graph “has the potential to improve outreach results and make recruiters lives much easier.”

LinkedIn’s social graph visually depicts the professional accreditations, skill sets and workplace associations collected from its member profiles. The Office Graph is a set of back-end machine learning and intelligent search technologies that draws on data about who a user is and what he or she is doing with Office and various other Microsoft applications. Once the two technology frameworks have been combined, they are likely to be used to help recruiters identify potential candidates who meet their search criteria and to alert them to any change in circumstances—such as the end of a long-term assignment or a new graduate degree—that may make the prospect more receptive to a new job offer.

“It’s about enabling HR to get to the right candidate at the right time,” Kingstone says.

“Human capital management applications have traditionally been focused on managing HR processes without providing any sort of insights,” agrees Manish Sood, the CEO of Reltio, a cloud-based provider of data driven business applications. By giving managers the ability to view their employee population by traits such as subject-matter expertise, professional certifications and work experience, he says the Microsoft-LinkedIn acquisition will be a watershed in terms of using HR data to strategically shape a workforce.

The acquisition “offers a unique opportunity for Microsoft to further penetrate the world of talent tech,” says Lisa Rowan, International Data Corp.’s research vice president for HR and talent management services. “Leveraging LinkedIn’s knowledge of users and their skills and abilities positions Microsoft to be a provider of employees and contractors for customers of its workplace productivity tools such as Office. Together the combined organization may look to develop new applications for talent functions not addressed by either today.” These, she says, include employee performance management, employee education and succession planning.

There are three key features of the LinkedIn user experience that Microsoft could potentially leverage as part of a modern talent management solution, according to the IDC analyst. These include endorsements, recommendations and posts:
  • On the LinkedIn network, every user can obtain endorsements from colleagues and their business associates for the skills and capabilities that they’ve demonstrated. These are tallied and featured in the user’s profile and are used to graphically represent the user’s professional expertise. Microsoft could extend this further, Rowan says, by allowing HR managers to map employees and job candidates’ influence across various fields and subject matter categories. Such insights, she says, “could be used to inform many elements of talent management,” including performance, learning and development. An employee needing to broaden their skill set, for instance, might receive course recommendations from their manager based on how those instructional sessions were rated by other employees with similar backgrounds and career development needs.
  • LinkedIn users can also secure written recommendations from co-workers and managers to enrich their profiles. Microsoft, Rowan says, could couple these with a user’s endorsements to build talent management solutions that chart employee behaviors, skills and aptitudes. For example, department heads and project leaders would be able to correlate education credentials and work experience with success rates on different types of projects to identify the best candidates for a given position.
  • LinkedIn members can use LinkedIn Pulse, an open platform that lets users contribute blog posts, off-the-cuff ideas or thought-leadership articles to the social network at large. These can be used to demonstrate subject-matter expertise, expand influence and build a personal brand within professional circles. Tied to LinkedIn’s endorsements and recommendations, Rowan contends that these postings represent another source of information about employee skill sets and abilities that Microsoft could use to enrich any HCM solutions that it develops as an outgrowth of the acquisition.

There are other opportunities for Microsoft to expand into HR-related fields as well, Rowan notes, including professional learning and employee communications.

On the learning side, Rowan expects Microsoft to leverage, a professional learning site that LinkedIn acquired last year for $1.5 billion. By using social awareness to determine who among their colleagues has taken what courses, at what point in their careers and to what benefit, she says Microsoft will help make knowledge workers more productive and successful through better educational choices.

And by taking advantage of LinkedIn’s newsfeed, the IDC analyst predicts that Microsoft will offer HR departments the ability to tailor their internal communications and news dissemination for different segments of their employee population. They will also be able to broaden their audience to include customers, partners and suppliers.

Furthermore, by giving HR the ability to tune and configure news for different audiences, Rowan says that “Microsoft will be able to provide them with even more insight into their employee population based on the content they consume in the newsfeed.”

Yet another potential opportunity: “LinkedIn’s vision for transforming work life to better empower career movement hasn’t always played well with other HCM solution providers,” given LinkedIn’s refusal to make available some of its application programming interfaces, says Reltio’s Sood. But if Microsoft decides to open LinkedIn’s APIs —the bits of computer code that allow different applications to tap into LinkedIn’s social graph and other resources —“this will enable more innovation in talent acquisition and management technology.”

“If Microsoft and LinkedIn create a platform that embeds the right information at the right time for the right process, it could change the dynamics of the HCM applications market,” declares 451’s Kingstone. “Microsoft would deliver the digital future, which is all about employee or individual empowerment.”
The final part of this three-part series will look at impact of the Microsoft-LinkedIn merger on CRM, marketing and sales management.

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