The Long Tail: Digital Disruption & Recruitment

“Our task is to read things that are not yet upon the page.”

Steve Jobs

The world is changing.

And, as HR and recruitment professionals, we need to change with it.

Welcome to the New Normal.

Meeting Across The River:

In this article, we share why we believe the theory of The Long Tail really matters and why more HR and recruitment professionals should be thinking about this concept (and how it can enhance their work in talent attraction, acquisition and management).

So, let’s get started…

A View Of The New Normal Landscape:

Rocky Ground:

Everyday, more and more of us move evermore online for our everyday transactions and interactions.

This is just as true for individuals in the local labour market, who increasingly tend to look for their next job opportunity via Google or Facebook, rather than in a newspaper or on Jobs Portals.

It’s also true of employees, who’d rather receive training via a video on their smartphone, than read a rather dry corporate document in hardcop;, or they’d prefer to collaborate in a peer-to-peer learning environment, rather than be lectured in a traditional classroom set-up.

My Hometown:

Most people in South Africa, and much of the rest of the world, now have access to the Internet through their mobile-phone (of which evermore people have smartphones) or other mobile devices. Most people are using Facebook and Whatsapp, along with other free social media and communication apps. Mobile phone penetration of the population in SA is over 90%, for example.

The largest demographic in the labour market is now Gen-Y (AKA: Millennials), who truly are the first generation of digital natives (and the first of many more such generations to come). They expect to interact with your brand via digital media and mobile devices. Gen-Y are working with several other generations in the workplace, like Gen-Xers, Baby Boomers and even some of the Silent Generation. All this makes for interesting workplace and organisational culture.

Wrecking Ball:

Everyday, it seems there’s a new digital channel or app that’s taking off in a BIG way. And, increasingly, AI too. Daily it seems there’s a new mega-viral hit, in the form of a new video or song or advert or trend. Everyday, there’s more digital content (and noise) posted on all the different social media channels and across the internet, far more than we can possibly keep up with.

Radio Nowhere:

The fragmentation of our media landscape (therefore the fragmentation of audiences too) continues at a relentless pace, while the rising tide of BIG data (across multimedia formats and mediums) threatens to overwhelm our ability to manage and make sense of it (and it’s still unclear whether AI will address this effectively or not).

Dancing in the dark:

It seems that consumer trends are several years ahead of what business (and HR) are doing to adapt to these trends. In fact, these consumer trends are so fast moving, it seems to be paralyzing many businesses and professionals: like a deer caught in oncoming headlights. And, remember, consumers are candidates (and vice versa). They’re employees too. That’s why candidates and employees expect us to communicate with them via digital media on their mobile devices.

The Long Tail:

So what is the theory of The Long Tail? We’ll take some time to explain it here and share two case studies of brands that effectively built their business model around The Long Tail.

Darkness On The Edge Of Town:

The Long Tail is a term coined by Chris Anderson, a founder of Wired magazine and CEO of TED, in a book that he wrote in 2006 on this topic: The Long Tail: How endless choice is creating unlimited demand.

As described on the back-cover blurb of his book, it’s put like this: “The Long Tail is a powerful new economic force in a world where the Internet allows almost unlimited choice. Chris Anderson has identified an important truth about our economy and culture: the future does not lie in ‘hits’ (the high-volume end of the traditional demand curve), but instead it lies in what used to be regarded as the ‘misses’ (the demand curve’s endlessly long tail).”

The Last Carnival:

What this means is that before the internet, in the ‘analogue’ and physical commercial world of bricks-&-mortar shops -with very limited shelf-space-  priority was given to products and services that would sell to the largest possible audience: the ‘hits’. It’s because it was the most efficient way to provide products and services at scale, while managing costs. This model was a legacy and extension of the industrial model that began with the Industrial Revolution in the 1800’s.

In short, business and the media catered to markets of ‘dozens-of-millions’. It took a great deal of resources and capital to break into these markets, which is why they were long dominated by the BIG boys in business and the media.

Generally, in the pre-internet past, niche tastes and audiences weren’t well catered for. For a current example what this contrast is like and how badly niche tastes used to be catered for. Remember your last visit to a Musica or HMV store, then go online and visit Apple Music!

But the Internet, along with more / faster broadband, digital media, search engines, social media, e-commerce, and mobile computing have all fundamentally changed the old model (and our lives along with it)!

Livin’ In The Future:

The Long Tail has disrupted our traditional media and commerce models through several interrelated dynamics and factors that are an inherent part of it:

  • Unlimited ‘shelf-space’ and storage, at almost no cost (relative to storing non-digital materials and data in analogue).
  • BIG data management, by indexing the data for ease of searching it.
  • Ease of search and reference of data/info for consumers.
  • Automated mass customisation.
  • Frictionless delivery of digital products/services and communications.
  • Almost ‘free’ digital delivery, communications and interactions.
  • Endless searchable choice, catering to an unlimited market of niches (audience: individuals, groups, communities, tastes, interests, etc).
  • This creates markets of ‘millions-of-dozens’ (instead of ‘dozens-of-millions’).
  • The more choice people and the marketplace are offered; the more niche markets are created (and therefore the longer The Long Tail becomes). Unlimited supply generates unlimited demand!
  • And it has put the tools of creation, communication, delivery in the hands of the individual persons and SMEs (just as much as they’re available to BIG corporates): the ‘democratization of the media’. The result has been an explosion in content and media creation, that we all witness everyday online.

Some real world examples will help provide context on the power of the The Long Tail and how it works.

We’ll look at two e-commerce companies: Rhapsody (a now extinct company online subscription-based music streaming platform, from Web 1.0 days) and Amazon (the ‘everything’ store, where we’ll focus at how it got started: book sales).

 

Easy Money:

First, let’s look at Rhapsody, an online subscription based music streaming platform.

Rhapsody, in 2006, offered 1.5 million songs in its song-catalogue, all of which are available 24/7 to its subscribers.

Compare this to Wal-Mart, who (in 2006) carried about 4,500 CD titles in total across all stores, which is the same as about 25,000 songs. And Wal-Mart will not have anything near this many CDs in any one store at any one time, rather they’d have closer to a few hundred in any one store that are immediately available to shoppers there.

In Wal-Mart’s CD inventory the top 200 albums account for more than 90% of all their sales. This is how the old music ‘hits’ model worked.

Wal-Mart does this because anything outside the top-selling 5,000 songs tends to sell very little compared to the ‘hit’ songs sales numbers. But, the important point is that the non-‘hits’ still sell…just in much lower numbers than the hits. This is known as the ‘long tail’ of the demand curve.

Now, Rhapsody can afford to store, display and deliver all these very low selling songs at almost no cost. So they do and they sell many of these non-hit songs to their end-users.

And the surprising thing about this is just how much all these ones-&-twos sales add up to in aggregate!

The songs ranked 25,000-100,000 in total sales (in other words, the ‘non-hit’ songs) add up to 22 million downloads per month for Rhapsody, which accounts for 25% of their total monthly sales.

Even more surprising, the songs ranked 100,000 to 800,000 in total sales add up to 16 million downloads per month for Rhapsody, which accounts for another 15% of their total monthly sales.

In other words, the non-hits inventory -of 1.5 million songs- accounts for over 40% of their total monthly sales. And it’s not like they’re marketing those songs or having to pay premiums for them, like they do for hit songs. Remarkably, every song in its catalogue sells at least once per year, while most sell far more than that per month.

Born In The U.S.A:

Next, let’s look at Amazon and, in particular, how it got started in the book selling marketplace.

Famously, Jeff Bezos started Amazon after doing research on internet business opportunities for his employer, a hedge fund. As a quant (AKA: math geek), Bezos realized that the exponential growth rates he was seeing in e-commerce were a once-in-a-lifetime business opportunity. But he had to do a lot of research to figure out the best market to set up an e-commerce company in order to be able to take advantage of the growth rates he’d discovered.

He figured out his market was to be book sales: “I went to the Direct Marketing Association and got a list of all the things sold remotely. Apparel was number one. Way down at the bottom of the list were books, because there really are no proper paper catalogues to speak of that sell books.

‘If you used the Web in 1994, with the primitive browsers and tiny bandwidth, it was a pain. I concluded that given the technology at the time if you could do something any other way, that would be preferable to doing it on the Web.

‘This was my criteria: picking a category where you could substantially improve the customer experience along a dimension that could be done on the Web.

‘It turns out that selection is a very important customer experience driver in the book category. It also turns out that you can’t have a big book catalogue on paper; it’s totally impractical!

‘There are more than 100,000 new books published every year and even the biggest superstore has only 175,000 and there’s only 3 of them that big in the USA.

‘So that became the idea: let Amazon.com be the first place where you can easily find and buy a million different books.”

The Promised Land:

In other words, the Internet enabled Amazon to eliminate all the physical barriers to an unlimited selection of books. Now, all Amazon’s millions of books were all available 24/7. All indexed. All easily searchable. All reviewed by other customers, which made it easier to find books they might like. All easy to purchase.

What This Means For HR & Why It Matters?

My City Of Ruins:

So, why does all this matter for HR and recruiters (or for: talent attraction, acquisition, and management)?

It’s fair to say that HR as a discipline practiced by many of the HR professionals has some way to travel before it catches up with the disruptive changes being wrought by tech’, digital media, Gen-Y in the workforce, and the changing behaviours in the local labour market.

Many HR and recruitment practices seem to be a legacy of the pre-internet world-of-work (or, often at best, a Web 1.0 version of these changes). Perhaps this is most true of the talent attraction and acquisition function (AKA: recruitment), in HR?

Many HR and recruitment processes and systems are often still manual, even when there’s a digital portal of some sort in place.

There are many tools out there that can assist HR (and recruiters) to be more productive and effective in their work. But, there is no one single ‘magic’ ‘silver-bullet’ software system or platform that will solve all the Web 2.0 and AI functional needs for HR. No ‘one ring to rule them all’, even though many software providers will try persuade you otherwise! Instead, HR and recruitment professionals need to find the best of several platforms optimally suited to their organisation’s needs, then effectively integrate them to work holistically.

Hunter Of Invisible Game:

This means lots of additional work for HR: researching, meeting experts in the marketplace, assessing the landscape, the options and what is best for you, a better understanding tech’ trends and options, the consumer (and labour market) landscape and trends.

There aren’t any short cuts for this work.

And this isn’t something you can do well if you’re busy most of the day with other tasks constantly ‘shouting’ for your attention.

Devils & Dust:

But, if HR and recruitment professional don’t find a way to escape this ‘hamster’ wheel of transactional busy-ness, then they’ll suddenly find that one day there’s software (and hardware) that does this transactional work more efficiently and at less cost than they do.

This is the ‘squeeze’ on administrative and middle-management jobs that is a trend already happening globally and locally in the world-of-work. It’s only going to get bigger.

That’s the downside and risk of all this change and the New Normal for HR and recruitment professionals. It’s also a risk for organisations, in that if they don’t address these challenges then they’ll loose the local ‘war for talent’ to competitors who do adapt faster and better.

Land Of Hope & Dreams:

At Blueprint Talent, we believe that all the change and disruption being brought about by digital media and mobile computing is a BIG opportunity for HR and recruitment professionals.

In fact, there’s reason to believe that it’ll help us address many of the age-old challenges in HR (and talent acquisition), which so far have proved intractable and frustrating!

The Promised Land:

Let’s focus on talent attraction and acquisition to draw out some of the reasons for optimism and the ways The Long Tail can provide opportunities for HR and recruitment professionals.

Ultimately, talent attraction and acquisition is all about the mastering the following disciplines:

  • Media Managament: Reach into the labour market.
  • Marketing: Attracting enough of the right kinds of candidates at any one time.
  • Data Management: Indentifying which applicants are the right ones from all the applicants. And reporting to assess what working.
  • Interview & Assessment: Interviewing candidates to assess if they are the right fit for your vancancy and organisation’s culture, as well as any tests / assessments included in your recruitment process.
  • Response Handling: Liaising with candidates and building your talent pool (and candidate database)
  • IR & Communications Management: Offers of Employment and Contracts of Employment (and on-boarding)

Secret Garden:

If we draw the analogy with Rhapsody’s song catalogue or Amazon’s book catalogue, then apply it to:

  • Industry and organisational jobs & skills needs.
  • Suitably skilled people and skills available in the labour market (and how to reach them).

In other words, the labour market isn’t a homogenous mass (a market of dozens-of-millions).

Rather, it’s a very ‘long tail’ of many niches (a market of ‘millions-of-dozens’), reflecting the demand curve of the many specialist jobs and skills needed by different industries, companies, and departments.

Thunder Road:

Now, with the advent of the Internet, digital and social media, mobile-computing, along with more/cheaper bandwidth and data, we have the tools to harness The Long Tail in HR and talent acquisition.

Namely, we have the tools of unlimited ‘shelf-space’, easily indexed and searchable content, frictionless delivery of this content, and relatively cheap media and communications. Think about what this means for communicating the career opportunities in your organisation (or for a better careers awareness experience for school pupils and candidates)!

Once we understand our industry, organisation, and jobs/skills needs in the context of The Long Tail paradigm, it provides a way for us to approach practicing our profession that is more effective and aligned to current consumer trends; while enabling us to add far greater value to our organisations in employer branding and talent attraction (and management).

Actually, we never want to reach the entire labour market! We only need to get our brand, employer-value-proposition, and jobs in-front of enough of the right candidates in the labour market.

The fragmentation of the consumer-media-audience, into specialist niches, is a good trend for HR and recruitment professional, as it means that for the first time in history we can start to properly target the right talent niches in the labour market.

And, for people in the local labour market, The Long Tail is a trend that benefits them too. No person wants to see every job or company there is, especially in a way that doesn’t categorize and differentiate them in a helpfully customised way for that individual. That’s too much information, too much time, too much ‘friction’ in the process. Nor do job-seekers only want to see the vacancies of companies who can afford to buy expensive adverts on traditional media (which is only ever a very small percentage of the total jobs and careers market – far less than 20% of the total jobs market).

Also, like Bezos’ observation that it was impractical and impossible to put every book ever printed onto a paper catalogue, so it’s impossible for career awareness providers to create hardcopy books and brochures listing every possible job and company. (Not that they ever tried.) Instead, they print (dull) catalogues of 50 or so jobs, usually determined by which businesses the publisher can sell space in the catalogue to. While that’s nice for the publisher, it doesn’t service job-seekers all that well (nor, really, employers too).

Remember what Jeff Bezos said about starting with book sales on Amazon, and instead think about career awareness or organisational career-mapping or pathing where you see the word ’book’):

“This was my criteria: picking a category where you could substantially improve the customer experience along a dimension that could be done on the Web. It turns out that selection is a very important customer experience driver in the book category. It also turns out that you can’t have a big book catalogue on paper; it’s totally impractical!” Jeff Bezos

The Rising:

The opportunity to do career awareness effectively for the first time in history is now very real: catering to markets of ‘millions-of-dozens’, who can access it on their channel-of-choice from wherever they are and at any time they want.

In the macro-level BIG picture, it all means that efficiencies of market allocation for the right human capital to the right job/career/organisation/sector can be taken to a new level with the advent of digital media and mobile computing. The productivity gains of this for the local and national economy are substantial.

And the productivity gains for HR (especially talent acquisition professionals) is dramatic! But only if they move to harness these trends.

 

Better Days:

The future is here already! And it’s an exciting one for HR and recruitment professionals, as well as everyone in the labour market.

Are HR professionals, with the support of their organisation’s, going to grab this opportunity? …If not now, when?

So, the question is –to paraphrase Wayne Gretzky – as a HR and recruitment professional, which type of ‘hockey player’ are you in terms of the future of talent acquisition and management:

“A good hockey player plays to where the puck is. A great hockey player plays to where it’s going to be.”

Watch a short presentation, by Dermot Grazebrook, on why The Long Tail changes everything for employer branding and talent attraction!

If you’d like to find out more about the research behind this article or chat to us about talent trends and best practice CLICK HERE to Contact Us.