Is a LinkedIn Premium account worth the money?
While many features are free, the professional social networking website dangles an array of additional tools - for a price.
Chicago: For job seekers and employers alike, LinkedIn provides a valuable service. While many features are free, the professional social networking website dangles an array of additional tools - for a price. But for those on a budget, is a LinkedIn Premium account worth the money?
The answer depends on how you use LinkedIn, which has more than 160 million members. For recruiters or those in cold-call sales, LinkedIn Premium's access to potential clients is a boon. But many job seekers may want to save their cash for printing resumes.
"It is worth it for me, because people look at my information online," says Teresa Haenn, a business development manager at Profiles, a Washington, DC employment agency for online marketing, Internet and IT professionals. "When you cold-call to companies, people will go onto LinkedIn and see if you're worth talking to. It gives you some validation."
Some LinkedIn users find the premium service "intrusive," however - they don't like the amount of information that is shared on the network. Others say they can find job seekers who use the free LinkedIn site without paying the extra cash.
"If I'm a casual user or a job seeker, it doesn't appear that the value is there, at least at this time," says Sharlyn Lauby, who writes HR Bartender, a human resources blog. "But if I were tasked with doing some heavy-duty recruiting, I'd give a LinkedIn premium account a whirl."
Skipping the middleman
The price of a premium account varies depending on the services. Haenn pays about $20 per month for a Premium Business account that allows her to send three InMails a month. An InMail gives Premium clients access to LinkedIn members, even if they aren't already personally linked, and offers a seven-day response guarantee. This guarantee, in theory, means there's less of a chance the recipient will ignore your missive.
The next tier up, Business Plus, offers 10 InMails monthly at about $42 a month.
A subscription to Premium also allows the user to see more results per search - 300 for Premium Business, 500 for Business Plus, compared with 100 for free LinkedIn users.
Typically, Premium memberships are for people who need to find people outside their initial network, says LinkedIn spokeswoman Julie Inouye.
"Reporters who need access to folks they need to talk to, recruiters or just people looking to expand their network with a more powerful search," are the prime users of this service, Inouye says.
InMail is helpful for users who want to skip the middleman, says Matt Kerr, director of executive search and talent at BPI group, a global management and HR consulting firm in Chicago.
"Instead of waiting for one of your connections to pass along your information to their contact, you can proactively introduce yourself by sending an InMail," he says.
One of LinkedIn's early adopters, Kevin L Nichols, started using the service in 2006. He switched to Premium about three years ago to develop his sales consultancy "more rapidly, effectively, and efficiently."
Has it worked? Nichols, who is based in the San Francisco Bay area, says yes. "The time saved is well worth the $900 investment on the front end," he says. "Moreover, one deal made via one of these InMails will pay for its cost tenfold in my profession."
Elissa Barnes, one of Haenn's colleagues at Profiles, says LinkedIn Premium "has completely changed our way of searching for talent, especially in a field that's white-collar and very, very technical. We've been so successful with LinkedIn that we've stopped using Monster and CareerBuilder. It is absolutely the strongest tool I've ever seen for recruiting in the past six years."
LinkedIn banks on recruiters. When members - both free and Premium - post their resumes and reveal their connections to business colleagues, they create a valuable network. In turn, LinkedIn makes money by charging high-end recruiters premium prices for deep access to member profiles. The Pro account, for example, cists $4,800 a year and allows 1,000 InMails and close scrutiny of prospects based on factors such as seniority, interests, years of experience and newness to LinkedIn.
What's the payoff?
LinkedIn Premium isn't for everyone.
While those who categorize themselves as "JobSeekers" can use LinkedIn Premium to get an advantage in going after prime jobs, they may not gain much for their money.
"If you are just a standard professional who's just trying to do standard network and trying to be found, you will be found. You don't necessarily have to pay a Premium fee," says Kate Rojek, a marketing associate with Profiles.
What's more, there is no evidence, according to Lauby and others, that a Premium account pushes a job seeker to the top of a recruiter search on LinkedIn.
"LinkedIn Premium has had less popularity with our user base because it tends to be intrusive and people prefer the standard method LinkedIn offers to organically build relationships," says Ryan Felps, chief executive officer of StarChapter, a Maryland company that serves associations and membership-based groups across the United States, helping them to organize and present information more effectively to members.
LinkedIn shares have been trading in the $95 range through the first half of June 2012 - more than double the $45 price on May 19, 2011, when the Mountain View, California company went public. Its 52-week high is $120.63, and its low $55.98. In the first quarter of 2012, revenue grew 101 percent, year over year, to $188 million, a period when the service added 15 million members. Meanwhile, LinkedIn is closing in on $1 billion in revenue a year. It expects $880 million to $900 million this year, based on a conservative growth rate of around 70 percent. If it maintains its first-quarter pace, LinkedIn will top $1 billion in revenues this year.
Inouye says the company doesn't break down its membership and so can't specify the number of Premium members. "However, we ended our first quarter of 2012 with Premium subscription revenues at $37.9 million, up 91 percent, year over year."
Barnes would not disclose the cost of her LinkedIn corporate recruiter account other than saying it runs "thousands per year." But, she says, "it is worth the investment tenfold. When I have 30 seconds to look at a resume, I want to see the core information and not just the fluff you normally see."