After much speculation, Facebook officially filed for a $5 billion IPO on Wednesday. Now that they are looking to raise capital, how will this affect hiring demand over the next few months for this social media giant? To forecast this, we took a look at hiring trends by some other companies before and after they filed their IPOs during 2011 – Demand Media (January 25 IPO), Pandora (June 15 IPO), and Groupon (November 4 IPO).
As you can see by the below charts representing the volume of online job ads placed by both companies, there are some trends in hiring once they begin trading on the stock market. Before the IPO, hiring tends to remain somewhat steady in the months leading up to the offering. Hiring at these 3 companies didn't change more than a few percentage points in the 90 days prior to their IPO. After the IPO, hiring tends to increase and decrease over the first few months. It makes sense that hiring would grow since these companies are raising capital, likely being used on various projects or expansions and companies would need to build their workforce for these projects.
Although the volume of job ads changes each month, all 3 of these companies have seen growth in hiring since their IPOs. Groupon, now 3 months after their IPO, has seen the volume of job ads increase about 40%. Pandora, has seen about 7 months pass and hiring demand is up about 30%. Demand Media, now 1 year since their IPO, has seen explosive growth recently with 400% more job ads being placed online.
Will Facebook follow a similar pattern? At first glance, Facebook seems to diverge from the typical pattern we see above. While hiring normally levels off in the months before an IPO, the volume of job ads has declined significantly at Facebook . The volume of job ads placed online has decreased 77% over the past 3 months. Only time will tell what jobs (and how many) Facebook will recruit for, but we expect hiring to increase. After all, on top of this IPO, their first engineering office outside the West Coast is expected to open in New York City early this year and, as far as we can tell, they are still accepting applications.
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