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The Electronic Recruiting News is a Free Daily Newsletter For Recruiters, HR Managers, Advertising Agencies and Clasified Advertising Operations

Home | ERN | Bugler | The Blogs | Blogroll | Advertise | Archives | Careers

(June 14, 2001) Sometimes we feel like habitual obituary readers. The degree to which old industry landmarks are folding is only matched by the degree to which new operations are emerging from the soil. Maybe it's age. Maybe we've come to navigate the landscape using the veterans of the last five years and it's sad to see them go.

There are signs of impending doom:

First, you hear murmurs of unpaid vendors and consultants.

Then, you read critiques of a once shining technology that turns out to be the reinvention of the wheel.

Then, the salespeople start to defect.

Then, the rumors of impending sale begin to proliferate.

The reporters start calling about rumored layoffs.

Then, the doors close.

The tough question for our customers is how to figure out which of the players is going to endure.

When we took the emerging Job Advertising Distribution (JAD) world apart in our recent study, we were faced with the same challenge: How do you tell which private company is going to survive? They don't publish financials (and what they'll tell you about that question makes Paul Bunyan seem like a short story, not a tall one). Their grasp on survival is very tentative. Rapidly changing strategy can often leave the team with morale problems that result in increasing losses.

Since you can't tell much from the financials, what in the world do you do?

As we've mentioned before, the JAD report lays out an interesting (and novel) approach to figuring out a company's real market viability. It's a combination of staffing, alliance development, customer acquisition rates and market infrastructure. Don't be fooled by operations that claim a technical advantage. That usually means that they've understaffed critical marketing and sales functions. Claims of profitability are often really symptoms of an underpaid entrepreneur at the helm.

In other words, the companies that proclaim their health most loudly are often the ones with the biggest problems.

Watch out for:

  • Rapid Expansion Of Product and Service Lines
  • Claims of Multiple Years of Profitability
  • Practicing What They Preach (Do They Use Their System Internally?)
  • A Board Of Directors With No One You've ever Heard Of
  • No Easy Contact (By Function) On Their Website
  • Time For A Return Call

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