How Microsoft’s LinkedIn Acquisition Could Transform HR

How Microsoft’s LinkedIn Acquisition Could Transform HR

The $26 billion acquisition deal, announced on Monday, immediately set commentators and analysts to speculating over what Microsoft’s plans might be for the leading business-oriented social network and its 433 million users. As the commentary continues to roll in, a consensus is emerging that this deal is a big deal, as it were, for the HR technology landscape. Quartz’s Amy X. Wang believes the combination of Microsoft and LinkedIn has the potential to transform not only how employees find jobs, but also how they train for them:

Consider that two-thirds of LinkedIn’s revenue already comes from the “talent solutions” it provides to businesses’ human resources departments, and that it’s a popular tool for salespeople looking for clients. Add in LinkedIn’s purchase of online education company Lynda last year, and it’s not hard to see how the platform—with integration into a larger business-catering company, like, say, Microsoft—could become an essential part of the way employers pick and train their employees. A LinkedIn-Microsoft product would not only help workers work, but also teach them the skills to get hired in the first place.

“LinkedIn has a unique advantage in the education space, in that they are the only place where hundreds of millions of people are voluntarily giving their longitudinal job and education history—which allows potentially for some unique analysis of what programs and courses or certifications actually lead to improved career paths,” says education consultant Michael Feldstein. Microsoft could examine that data and then offer those programs itself. While Feldstein says Microsoft likely has “too much to lose by competing against traditional universities,” with whom it has close partnerships, it could easily dominate the corporate training market—currently a fragmented space with plenty of room for new players.

Talking to some HR technology experts, Jack Robinson at HRE Daily comes away similarly bullish about the deal’s potential:

Under Microsoft, “LinkedIn could become a network for learning and collaboration,” providing HR departments a tool for connecting employees, says George LaRocque, a well-known HR technology consultant. … LaRocque sees the company connecting LinkedIn’s Lynda tutorial videos to Excel, for example, so that users can get immediate help. …

Kyle Lagunas of the IT market research firm International Data Corp. has a similar view. He sees three key opportunities for Microsoft in the acquisition: LinkedIn’s in endorsements, recommendations and posts.

If properly leveraged by Microsoft, LinkedIn endorsements — in which users rate each other for various skills — could be used internally “to map influence across various subject matters, skills and capabilities,” he notes in an email. Recommendations shared among LinkedIn users could provide a powerful tool for recruiters, he says. And companies could track posts on LinkedIn’s Pulse service to help workers develop — and demonstrate — expertise.

On the other hand, not everyone holds those features in such high esteem. Writing at Quartz about LinkedIn’s “weird” qualities, Kari Paul observes that younger professionals aren’t cottoning to LinkedIn the way their elders have, and calls the endorsement tool “so spammy that it’s effectively devoid of meaning”:

The website prompts users to vouch for the skills of their connections, situated so prominently on the page that a stray click could lead you to enthusiastically recommend someone you do not actually know, for skills you have no idea whether they actually possess. Last week, a stranger I have never met or worked with endorsed me for WordPress and French. This was very nice of him, but given that he does not know me, he’s not the most reliable source. A friend of mine in a completely different industry, whom I’ve never worked with, endorsed my blogging and proofreading skills. Recently my high school English teacher, who I don’t actually remember “connecting” with, endorsed me for AP Style, more than eight years after I took his class. Thanks, Mr. Fry!

These endorsements lead many people to rack up points for skills they don’t necessarily have, which would seem to make the platform a less-than-accurate barometer for hiring managers. Yet 93% of hiring managers say they check LinkedIn when seeking job candidates. So whether or not users think LinkedIn is legit, their potential employers are treating it as if it is.

This mix of weaknesses and opportunities underpins the challenge Microsoft CEO Satya Nadella has set himself in making this acquisition successful, Christopher Mims writes at the Wall Street Journal:

Michael Wade, professor of innovation and strategy at Switzerland-based business school IMD, says the company hasn’t lived up to its potential for a while. Mr. Wade says LinkedIn hasn’t evolved quickly enough beyond its roots as a recruiting tool and job-search site. Most of its users aren’t looking for a job, and LinkedIn has so far done a poor job of getting them to come back to the site regularly to connect with and expand their professional networks. Only about one quarter of LinkedIn’s 400 million “cumulative” users return to the site every month.

Yet Mims believes Nadella is up to the challenge, and here’s why:

Put bluntly, Microsoft today is a very different company than the one that acquired Nokia, Skype or Yammer. Under Mr. Nadella’s predecessor,Steve Ballmer, Microsoft sought to drive users to its platforms, primarily Windows. As a corollary, that meant that acquisitions were quickly integrated with other Microsoft products and development of new features slowed. Mr. Nadella has shown a willingness to meet users where they are, even if that is devices running Apple Inc.’s iOS or Alphabet Inc.’s Android mobile operating systems.