Job seekers turn to social networks

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The economic crisis slamming firms across the globe has sparked a spike in use of professional networks to find new jobs.

Services such as Xing and LinkedIn are proving to be key sites as people hedge against losing work and laid-off employees seek jobs.

Traffic on the world's top professional web networks has surged since the financial crisis started to make headlines, with top player, privately held LinkedIn, notching 25 per cent more registrations in September than forecast.

"Nobody has ever seen anything like this before," said Kevin Eyres, head of LinkedIn's operations in Europe. "Now we are growing by almost one new user each second."

Membership on LinkedIn has jumped to more than 31 million from 18 million at the start of the year, growing fastest in the financial services, media, education and technology fields, Eyres said. The firm has not disclosed any financial details.

"Given that a lot of professionals are currently losing or are worried about losing their job, it makes sense that career-focused social networks such as LinkedIn should see a boost in traffic," said Martin Olausson, director of the digital media strategies unit at research firm Strategy Analytics.

He estimated the size of the online professional social networking market at about $170 million (£111.8 million) this year.

Professional sites seek to distance themselves from social networks such as Facebook with their more sober approach, and by giving members more control over their profiles.

Richard Evans, director at UK-based Sheridan Evans Executive Search, said he has seen a rising number of requests to connect on professional web networks: these are increasingly about the need for a job.

Sheridan Evans uses both LinkedIn and Xing, but also Paris-headquartered Viadeo and the largest address-book site Plaxo, to identify potential candidates. It has directed many people to their new jobs using such networks, Evans said.

"The recruitment industry in general is being hit hard. In financial services it's clearly very bad. In construction it's bad. In retail it's getting bad," said Evans, adding a shortage of senior management was supporting the headhunting business.

Already an estimated 150,000 jobs have been lost globally in the financial sector alone, with more widely expected to go in investment banking and trading.

LinkedIn said it had seen a slight fall in job offers, but no sharp declines, whereas smaller peer, Europe-focused Xing, reported increasing traffic toward job adverts.

But with the downturn hurting the recruitment business and advertising, social networks have struggled to find a balance between sharply rising usage and profitable growth. LinkedIn said last month it would cut 36 jobs - 10 per cent of its staff.

Hamburg-based Xing, which has 6.5 million users in total and whose half a million premium users pay €5.95 (£5) per month for extra services, has also seen a jump in registrations and connections to record levels, and believes the crisis could open opportunities to grow through acquisition.

"The crisis is very beneficial for us. We are debt-free, with over 40 million euros (£33.49 million) in cash, and the prices for competitors are dropping significantly," said Xing chief executive Lars Hinrichs.

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