You Won't Believe What LinkedIn, Inc. CEO Jeff Weiner Said About College Degrees

By Markets Fool.com

Image source: LinkedIn.

Continue Reading Below

LinkedIn (NYSE: LNKD) CEO Jeff Weiner thinks that traditional four-year college degrees are overrated. As the company prepares to join forces with Microsoft (NASDAQ: MSFT), Weiner is not resting on his laurels but trying to make a more perfect job-hunting beast.

As it turns out, he is not alone. Is the job search market about to make a dramatic turn in a new direction, powered by deep data analysis?

What Jeff Weiner said

In a presentation given at the Recode Code Enterprise conference, Weiner explained why he isn't a big fan of hiring decisions based on college diplomas.

"Historically here, there's been a tremendous amount of weight that's been given to four-year university degrees and not nearly enough weight in my opinion is given to vocational training facilities and vocational training certifications," he said. "We would do much better if we stopped ensuring that everyone had to have a four-year degree to get certain types of jobs and started being open to the fact that there's a much broader array of talents and skills and perspectives and experiences that people can be successful."

Continue Reading Below

You could argue that this was a self-serving statement. After all, LinkedIn recently acquired Lynda.com in a $1.5 billion deal, giving the company access to a respected library of skills-training classes and videos. Refocusing the hiring narrative on single skills instead of complete college degrees can help LinkedIn make the most of this expensive but promising asset.

That's a fair point, but far from the whole story.

The end of an era

Weiner's comments fit right into a much larger industry trend.

When Netherlands-based staffing specialist Randstad bought American job search veteran Monster Worldwide, it was the end of an era. The best spin management could put on Monster's 2015 performance was that the company's market share was stabilizing as compared to Monster's "traditional competitors."

That watered-down progress report said nothing of the "traditional" job search market's struggles against new and disruptive competitors.

It's easy enough to set up a database of available jobs and another of applicant resumes and then run simple matches across those two halves. But that model breaks down when both job hunters and employers start to figure out that many crucial job skills do not follow automatically from selecting the right college degree. Monster's revenues fell from $890 million in 2012 to $667 million in 2015. That 25% drop over three years shows how hard it is to squeeze green blood out of that tired old stone.

So Randstad picked up a struggling asset at a low price, getting a quick growth-to-acquisition boost at a discount.

Meanwhile, staffing specialist Robert Half (NYSE: RHI) has always taken the time to run hands-on evaluations of each prospective job applicant.

That commitment to human-powered analysis and a deeper understanding of each positions show in the company's financial results. Robert Half's annual revenues have increased by 24% over the same period where Monster's shrunk by 25%. At the same time, Robert Half shares have gained 26% since the end of 2012. Monster investors lost 40% instead, and that includes a generous buyout premium from Randstad.

Image source: Getty Images.

The new wave

That's far from the only value-added approach, of course. Elsewhere, companies with access to rich data on both sides of the job-matching process have started to apply next-generation computerized data analysis to the market.

The exact strategies vary.

SAP (NYSE: SAP) attacks this problem from the perspective of a data collection and analysis veteran. The SAP HANA 2 platform tries to merge the staffing problem right into fundamental business analysis processes. It's like throwing raw computing horsepower at a human issue. As SAP's artificial intelligence tools improve over time, so will its staffing abilities.

LinkedIn brings more of a social media strategy to the table. The company's job-hunting and position-filling muscle depends on direct input from its users and a massive network effect. The way to improve this platform is by adding more users on both sides of the staffing equation and by providing motivation to feed more data into LinkedIn's information vaults.

And there are hybrid strategies between these extremes, too.

For example, enterprise-grade staffing specialist 1-Page maintains a database of over 350 million professionals and active relationships with a stable of large employers.

"We built actual intelligence, or really AI, on top of our own database," said 1-Page founder and CEO Joanna Riley in a phone interview with The Motley Fool. "So when any of our clients come and say that they want to hire a data scientist in Silicon Valley, our system is going to be able to match that client's specific requirements to our database and really pick up on the nuances through AI, through intelligent analysis."

1-Page aims to hand its clients a short list of highly qualified candidates, saving their HR department from wading through oceans of kinda-sorta qualified applicants. The company takes the data gathering of a LinkedIn-style social network and marries it to the deep artificial intelligence analysis of an SAP.

The big takeaway

In short, LinkedIn CEO Jeff Weiner is on to something here. The right job skills for a particular position are not always the same thing as having the right college diploma, and it's a good idea to start selling the value of highly specific training to both sides of the job search process.

And merging LinkedIn's social tools to the well-established number-crunching powers of Microsoft might just pay off in unexpected ways, too. Maybe I'm drinking too much of Weiner's Kool-Aid, but the whole Microsoft transaction is starting to make a ton of sense from this angle.

Forget the 2016 Election: 10 stocks we like better than LinkedIn
Donald Trump was just elected president, and volatility is up. But here's why you should ignore the election:

Investing geniuses Tom and David Gardner have spent a long time beating the market no matter who's in the White House. In fact, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and LinkedIn wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of November 7, 2016

Anders Bylund has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Robert Half International. The Motley Fool also owns shares of both LinkedIn and Microsoft. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.