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In the January 2003 issue of Networking News, we asked several industry veterans to comment on the past year and give a prognosis for 2003. In the newsletter, we provided a small quote from each trainer and an abstract of their article. Below you will find the full-text article from each trainer. Hopefully their ideas and predictions will help you as you create your business plan for success in 2003.

Networking News is a monthly newsletter written for and distributed to over 18,000 recruiters nationwide. It contains articles from the industry's leading trainers, plus valuable articles that apply to recruiters in all industries.

es in how we market our services, win new clients and evaluate activity. Finding a client in the recent past hiring multiple candidates was as difficult as falling out of your chair. Today, the way in which we will find grade "A" clients and their search activity is in marketing, marketing, and more marketing. Recruiters had the luxury (and curse) of doing little of this relation-based marketing thing for the last ten years. Many recruiters have never worked a "desk" in other than that flourishing economy of the "90’s". Some recruiters have never, until now, needed to master the fundamental skills of the recruiting process. Others need to return to them. We all have to honestly assess our recruiter skills to succeed today. The toughest challenge today is changing how we made money for the last decade. This affects everybody from the new recruiter to the seasoned veteran.

We have seen no slow down in our firm. We refuse to allow the barrage of media negativity to enter into our career as recruiting professionals. What we know is that this economy demands that we work with more clients and generate new relationships. We must now, without any excuses, give higher level, value-added services to each company with which we choose to work. This is a gross impossibility with the wobbling client contact. Your clients are faced with stockholder and corporate failure paranoia. Many decision-makers in our client companies have not experienced challenging economics in the role of manager. This drives them to decisions made in an overly-cautious manner. Hiring freezes, positions left open, candidates left "hanging," and recruiters and hiring managers left frustrated do not lead to wealth. Recruiters are now in fear of losing a once fruitful arrangement with a now faltering client. Today, more than ever before, we must say that one word that top-billing recruiters say more than any other: NO! The realities of 2002 demand we ask every tough question of every client contact, every time. This is not the time to start compromising our criteria or hanging on to the comforts afforded us by the affluent period behind us.

Get back to "working a smart desk." Re-establish grade "A" criteria for clients and their searches. If you want to make more money today, work with a larger number of clients and fill the same number of searches as we did a year ago, or more! This demands that we work with the true decision-makers. These are clearly the people empowered to decide who will be hired and who will not. Once we reach these key contacts, we need to reach outside the "box" in which they may place us. Take on a consultative attitude and approach. Do not live in fear of losing a client or search from those who are adverse to providing answers to our questions, even when the questions we ask place them outside of their habitual comfort zone. The affluent times of just a year ago allowed our clients to develop some habits that now place them in jeopardy.

The candidate pool is just as shallow as it was a year ago. However, the perception of many client contacts is that the layoffs of recent months have flooded the pool with candidates ripe for the picking. We (and they) know that the majority of displaced professionals at present do not represent the best-qualified candidates available. The Internet jobsites are flooded with candidates that are either recently out of work or whose status makes them difficult to place. Regardless, the perception of these sites and the candidates they represent to our clients is one of a lower caliber than they were once believed to be. The days of cleverly fishing these sites and then representing the candidates found there as "direct recruits" is over. Most HR professionals as well as their hiring managers are disenchanted with these sources of potential employees. As many now investigate very diligently, the genesis of our referrals. A client today, who discovers our referred candidate to have been "E-cruited", is less than compelled to see us as a preferred provider of staffing services.

Direct recruiting remains the best method of finding people who can meet the challenges our clients face. In order to be effective at direct recruiting we must become, literally, an extension of our client company, its culture, its challenges, its community and the hiring decision-maker. To meet this challenge and provide value-added service to our clients, we have to drill deep into the minds of our client contacts. Some of the questions we must resolve are tough to ask and tough to answer.

Why would a highly qualified person leave their current position (one which compelled them to join their current employer) to accept this position? What makes this job an opportunity?
Why would this person you seek want to work for your firm?
What makes your community an attractive place to live, raise a family, retire, etc.?
Why would a highly talented individual capable of solving the problems associated with this role want to work for you? What would your current subordinates say about that?

Naturally we must also ask all of the fundamental questions regarding fees, terms and referral practices. There are three conditions which must be present to qualify a search as a grade "A":

Cooperation: This manifests itself in many ways, none the least of which is access to key hiring decision-makers, the professional willingness of an HR contact to be in the loop (but not at the helm), and a willingness to allow you, the professional search expert, to apply your process to solve their problems.

Urgency: The contingency placement business is obviously affected by timing. The client that convinces you that they must have the candidate "yesterday" deserves all of the hustle and priority you can provide. Work no search before its time. The client that is not ready today will be far more compliant and cooperative when the pain they feel about the open position increases tomorrow. Don’t kid yourself, the recruiter who accepts a search for the client who is not yet a serious "buyer" is not often looked upon as the sharpest tool in the shed.

Something to Sell: The companies that will thrive now and into the future have adopted the attitude that they must compete for talented people. Work with those companies that are willing to do their homework and be prepared to pick up the recruiting baton in the race for the best-qualified candidates. Those days of the past when a company could sit back and rest on its image and reputation to attract top-performers are over. Generation "X-ers" don’t see the world in that light. Companies must continue the effort to sell everyone they meet on every element of the opportunity while concurrently evaluating skills and abilities. The recruiter who provides the value-added service of educating each client in this art will thrive.

You need Cooperation, Urgency, and Something to Sell (C.U.S.) in any search you deem as Grade "A". C.U.S. without them, you do not have a qualified search or job order to fill.

In conclusion, I feel compelled to say that among the many recruiters I meet around the world I see two groups, the positively minded recruiter who is enjoying success, and the crestfallen recruiter who is wallowing in despair and totally convinced that the sky is falling. The latter group is invariably finding failure everyday. Buck up guys! This is not going to last. The market is recovering, correcting and gaining momentum. This decade will prove soon to be a great one. It’s your decision. Yes or no. You will both greet these times with change and enthusiasm thus finding success or not.

Doug Beabout brings over 25 years of expertise in top billings, placement firm ownership and industry training. His reputation for training excellence has placed him repeatedly as a guest speaker and writer for the National Association of Personnel Services. Doug is owner and president of the Douglas Howard Group, a professional placement and training services company. For more information, please visit, www.DougBeabout.com.

I am always leery

when asked to make predictions of the future. When it comes to the future of the economy and recruiting, I have been even more hesitant to prognosticate of late. For the 3^rd or 4^th time in the since the "official" recession, things look promising. The stock market is up, consumer spending continues stronger than anticipated, and company earnings and capital expenditures look darn encouraging.

One could go on and on trying to dissect these tarot cards of the economy, politics and the future, and it would make you feel prepared and like you have done your due diligence. But it would be a waste of time. The bottom line is we just can’t know what will happen until it does, so we need to stop getting analysis paralysis over micro economic details and start focusing on the macro economic realities for our industry. In other words, lets stop obsessing about the details and start looking at the big picture.

What is the big picture? The staffing, executive search, direct hire and contract industry is at least a 100 billion dollar US industry. Could be as big as 120 billion. Industry numbers are difficult to find, but we know this is a realistic ballpark range, and that number should give GREAT confidence. Though I have not had a record breaking year, I had a solid year, and I know that at least 20% of the recruiters I correspond with regularly are having their BEST YEAR EVER. It is out there; some of us just don’t want to work as hard as is required to make it happen. I know I have worked harder than all but one other point in my career this last year, but the germinating seeds of my efforts are beginning to bear some nice rewards.

Additionally, our industry has been hard hit because a number of folks simply could not adapt their techniques or specialties to stay in business. For example, IT is out and healthcare is in. My guess on a random sample of 8000 industry practitioners is that 40% of the individuals who were in our industry at the end of 1999 are gone as we enter 2003. This leaves more for each of the rest of us who had the courage and skills to ride out the storm. Did we really expect it to remain like it was at the end of the 90’s?

The final big picture fact offers me the most optimism. Yet it is the one thing most often overlooked by those in the current dark forest ofour industry. Demographically our nation is simply NOT going to have enough employees for the growth industry wants to achieve as this economic cycle ends and the next economic expansion begins. In the middle of the most difficult times last fall, leaders of industry were already focusing on the number one problem of their future: a lack of capable human capital. Despite what new technologies do or don’t come along for recruiting, this one demographic fact is our industry’s paramount saving grace. Those of us who have intelligent networks (digital and otherwise) to find the human capital that can deliver the result of quality hires for our clients and prospects will always find buyers ready to pay fees.

So I have great optimism for the future despite what the economy does or doesn’t do, despite war or terrorism or all the uncertainty that is the early 21^st century. Our industry is substantial, there are fewer players in the game, and demographically we are poised for another great boom.

We will need to continue to evolve as an industry to take advantage of these three amazing realities of our business. Evolution and change are not things we take to well historically. Don’t believe me? Remember how the fax machine was going to destroy our business? I do? I remember attending a NAPC Conference where the speaker spent much of his time telling us how to get around the fax machine technology. HA!

Now it is voice mail, the Internet and intelligent agents that make it easier for industry to ignore us, or find employees on its own. These are not technologies that will be the death knell to our industry, though they may be the death knell for individual recruiters who can’t adapt. The industry will adapt, and it will not just survive, but it will thrive. So how do we need to think about evolving as an industry? Believe it or not we can evolve by looking at our past.

Technology has duped us into moving away from the necessary human contact for success in this business. Initially new technology allowed us an easy way to pick the low hanging fruit, but now those very same technologies are taking that fruit away from us. Now we need to reach higher by building meaningful client relationships, learning to recruit talent not easily found online, and learn how to do this recruiting in a manner so as not to sound like a bad used car salesperson. We need to learn how to use technology to help us build and MAINTAIN networks that will allow us to respond and thrive.

Eventually our industry will respect the sanctity of superior sales professionals and surround them with electronic and human support systems that keep them from having to do the industry’s necessary busy work, and do the thing they do best, build relationships and SELL. Our industry continues to expect top sales professionals to do too much of the mundane essential for success in this business. We must aggressively work to develop systems and processes that let sales professionals sell.

Finally, we must recognize that training is our best investment for future success, and that now is the best time to hire new industry professionals. Those who can learn how to survive because it is hard work takes the day are the very same recruiters who will thrive and be our leaders when the going gets good again. That will be sooner than we think. Also, we need to stop looking at JUST our industry for answers and models of success. We keep recycling the same ole industry dinosaurs and are surprised when we get the same ole results. What we need are new ideas from outside our industry that we intelligently apply to build new and competitively advantageous differentiation and best practices. The thoughts are out there…now we need to mine them, refine them and forge them into workable process ideas that lead to bottom line results.

Lou Alder’s Hire With Your Head is one such example, which most of us have ignored.

So our work is cut out for us, but there are great reasons to be optimistic. It was never suppose to be easy, and the fact that it is hard gives this recruiter a great sense of accomplishment at the end of the day, week, month and year. If it were easy everyone would do it, and that is exactly what happened in the late 90’s. But now that it is hard again, well, that is what gives us satisfaction in our success. My expectation is that those who really work hard now will derive GREAT satisfaction in the not too distant future when one economic cycle is replaced by another, this one expanding, and all will be good again in recruiterland.

Jeff Skrentny, CPC/CTS, ATMS, began his career in the recruiting, search & staffing industry after graduate school in March of 1987 with one of Chicago's largest clerical placement agencies. In 1996 Jeff made the successful transition from clerical placement to technical search when he opened the Jefferson Group. Besides working his busy IT desk, Jeff has done motivational industry training for dozens of industry associations, as well as for select in-house clients.

For most in our industry, 2002 was a bad year. For many, 2001 was no bargain either. After a year or perhaps two of declining revenues and a slow-to-disastrous market, the tendency is to think that things will never improve. Of course they will! As a result of an unusual confluence of factors, we can expect a decent new year, and a genuinely solid year following that.

These factors begin with the economy. We are currently in a "growth recession", ie. growth, but at an insufficent rate to create new jobs. Still, trend lines are up. The "increased productivity" we have seen is due to workers putting in longer and more efficient hours. This will not continue indefinitely, and more hiring will result. The new majority party will pass tax cuts and other stimulous measures. Interests rates are extremely low. And the liberation of Iraq will yield first a positive attitude and consumer confidence, and then reduced oil prices.

We can expect slow improvement, but that improvement will be enhanced by our reduced numbers. The "business pie" will be split in far fewer ways. Areas of direct profit to clients will come back fastest, such as sales and marketing. Office support will follow, as will engineering and production. IT will continue to lag badly, due to grave over-consumption and over-hiring during the "bubble years". Clients have already utilized maximum temp and contract services during this slow time. As things improve, permanent may be expected to strongly lead the way. Internet trainers will continue to focus on undercutting our industry by "training" our clients, so serious telephone recruiters will far outpace those few remaining souls who rely on the "net".

In sum, we can look forward to a solidly improving year, followed by a fine 2004. After the last two years, we deserve it!

Steve Finkel offers a broad line of excellent audio and video cassettes designed specifically for the search and recruiting industry, as well as a 360-page hardbound book. He has been referred to by The Fordyce Letter as "universally regarded our industry’s leading trainer". Visit his Web site is www.SteveFinkel.com. For complete information, contact him at 314-991-3177.

I recently spent a week talking to several dozen CEOs about their visions of the future. Almost to a person they told me that everything had been on track for a recovery during this past year but the 9/11 tragedy knocked those plans for a loop. Homeland security concerns coupled with the continual drumbeat over Iraq have caused the recovery to be mired in mud. They’ve used this time to cut the fat from their companies, lower superfluous headcount and fine tune their operations. Everyone is cautiously hopeful that another 9/11-type event won’t set the economy back again but most told me that, even if it does, the country is better able to handle the aftershocks than before. Life somehow manages to move on for most and the November election results, while not to everyone’s liking, gave CEOs a modicum of economic predictability for the next couple of years. Uncertainty, according to almost all, was the biggest downside to the Washington gridlock and not overly conducive to making those new project investments necessary for growth.

CEOs in crisis management mode tend to neglect long-range plans. For many, the future is next week, next month or next quarter. But the New Year is a powerful point of reference. Subliminal though it may be, it is as good a time as any to focus their gaze ahead instead of glancing at their rear view mirrors.

When companies re-enter their growth mode, especially with plans to recalibrate and restructure, their primary need is for extraordinarily talented people to drive that growth. A majority of CEOs with whom I spoke indicated that they would be looking outside of their companies for talent. That’s where recruiters enter the scene.

We all realize that during the recent rough times, the recruiting profession has been commoditized. If all a company needs is someone to warm a chair or inhabit a cubicle, they’ve been fairly easy to find. Almost as easy as finding a financially strapped recruiter willing to work for shamefully low fees. Tough times call for creative solutions and companies of all types have tried to become do-it-yourself hirers. The Internet has become our biggest competitor and, although in-house recruiters nationwide are developing rectangular eyeballs from all the web surfing, they are beginning to realize that the Internet haystacks are just to big to find very many of those elusive needles and might be counterproductive and more costly than they will admit, especially when a savvy third-party recruiter can quickly present just a few qualified contenders willing to say yes to their job offers.

Nevertheless, the economy is growing --- it will continue to do so --- and in the near future the number of critical jobs will outstrip the number of qualified jobseekers. These demographics are systemically absolute. We are already seeing large numbers of our readers reporting a better-than-average 2002. Sure, some couldn’t withstand the storm and have moved on to other careers, but that means more opportunities for those who are left. For a while, it won’t be easy, but there is the end of this tunnel and it’s closer than you think. Developing new relationships and maintaining existing ones with those companies who are about to pull the hiring trigger has kept large numbers of recruiters healthily profitable. They are the ones who have been able to educate enlightened hirers on the efficacy and value of the recruiting professions.

Paul Hawkinson is the Editor and Publisher of The Fordyce Letter, the most widely-read publication in the recruiting business. Prior to taking over this publication, he spent 25 years in the search profession. For more information, please visit www.FordyceLetter.com.

Looking for some holiday cheer? Here are four reasons to feel optimistic about recruiting:

Analyze this: As soon as the recovery kicks in, employers will revert to their past behavior and begin hiring way beyond their actual needs (I call this phenomenon "binge hiring"). This is also the point at which new recruiters materialize out of thin air.

From my daily perspective on a desk, I see no long-term diminution of the need for third-party recruiting services. True, we may need to work harder than we did during the halcyon days of the '90s; but I still believe we're in the best–and most profitable–business in the world.

Bill Radin is a top-producing recruiter whose innovative books, tapes and training seminars have helped thousands of recruiting professionals and search consultants achieve peak performance and career satisfaction. Bill’s best-selling books include Billing Power, The Recruiter’s Almanac and Shut Up & Make More Money, and his new five-hour tape series is entitled Recruiting and the Art of Control. Bill can be reached at (800) 837-7224 or visited online at www.billradin.com

Daily, I receive calls and e-mails from owners, managers and staff within our industry asking the big question:

Although my "crystal ball" may not be any clearer than the next prognosticator, with a fair level of confidence, I offer the following for your review. As you consider these observations, realize that I am convinced the challenges we face are significant yet the corresponding opportunities they present are even greater.

The worst is behind us and "the best is yet to come". Nevertheless, there will continue to be layoffs and downsizing both within our industry and with our clients as financial reserves continue to be stretched beyond their limits. This trend may continue well into 2003. That’s the bad news. Let’s consider the variables.

On the negative side, the stock markets continued to fluctuate, as investor confidence remains uncertain. This is enhanced by a growing sense of distrust over the reliability of corporate earnings reports. Trust will return once it has been demonstrated that sound and disciplined accounting practices are the rule and not the exception, and when those responsible for the collapse of companies such as Enron and WorldCom are held responsible for their actions by the federal government.

The "wild card" is the war on terrorism. More specifically, the possibility of catastrophic terrorist acts on American soil. Any semblance of a repeat of 9/11 would have a major impact on consumer confidence and directly affect in a negative fashion many industries that are just now recovering from the economic slowdown.

However, the good news outweighs the bad. Consumer spending remains high as interest rates remain low. Inflation is well under control and the Federal Reserve has just lowered the interest an entire point. Although we may be a few years away from another balanced budget and our Federal Trade Deficit is growing, the productivity of the American work force is at an all time high and increases in defense/security spending should more than off set the continuous struggle our government has on these issues. Perhaps the most significant variable is advancing technology. This is creating a "sea change" in the way America conducts its business. "More, better, faster" is no longer a slogan, it is the mantra of 21^st century business. As a constant against all of these variables is the irrefutable fact that good employees are still hard to find and harder to keep. Projected demographics give further credence to support the continuation of the "war for talent".

However, the workplace has become a dynamic environment where the only constant is change and where the margin for error is great while the window of opportunity is small. Strategic business decisions have to be made on a decentralized basis and within a timeframe that reflects the speed at which information is made available. This has a direct impact on our business where the ability to identify, attract, and place qualified employers has taken on a JIT (just in time) profile. Emerging from these turbulent times are phenomenal opportunities for those companies who have the courage to seize the moment, focus their resources, and innovate, migrate, and mutate to higher levels of quality, reliability and performance. Herein lies the greatest opportunity for our industry.

In order to prosper in this new business environment, we have to understand that our success is tied to that of our clients. This requires a broader perspective than just "let’s make a deal". Companies will no longer tolerate staffing firms providing "that" which they can provide themselves. Rather, they are developing partnering relationships with staffing firms that utilize a "client centeredness approach" to delivering employees who will thrive in this dynamic environment, and through their creativity, enthusiasm, and initiative, create a positive impact on the performance capacity of the organization. The earmark of these relationships will be the proper utilization of job related assessment tools and strategies that dramatically decrease the margin for error during the hiring/assignment and post hiring/assignment environments.

Ultimately, people are the only true source of competitive advantage. That is the stock in trade of our industry. It always has been and it always will be. However, in the future, the processes utilized to deliver this competitive advantage must fully utilize the collective resources of both the client company and the staffing firm. From job analysis through transition strategies, successful staffing firms must be prepared to lead their clients through a process that ultimately will all but eliminate the likelihood of hiring/assignment error while insuring a positive "talent flow" for the client’s organization. Meanwhile, staffing firms who hold on to the old model for doing business will continue to experience downward pressures on fees and bill rates and increased competition from a growing body of non-staffing industry alternatives.

The challenges may be daunting yet the opportunity for growth and prosperity are unparalleled in the history of our industry. This new business environment has little room for error or miscalculation. The competition from a worldwide marketplace will insure a natural selection where the "cream" will rise to the top. For those staffing firms who understand this "sea change" in the manner in which America conducts its business, adaptation, innovation, and a broader sense of collective responsibility will guide their processes and client centered approach. For these firms, the reality does reflect the fact that "the best is yet to come!"

Terry Petra is one of our industry’s leading trainers and consultants. He has conducted on-site programs for search, placement and temporary staffing firms in the U.S., Canada, Mexico, Australia, New Zealand, South Africa, England, and Russia. To learn more about his background, services and training products, particularly his newly released CD Training Program entitled: "Just Do It … Right! A Client Centered Process That Works", check out his web site at www.tpetra.com. Terry can be reached at (651) 738-8561, or e-mail: Terry@tpetra.com.


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