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Market Consolidation
August 13, 2002) -
The earliest attempts to organize the Human Capital (HC) Marketplace focused exclusively on the labor end of the equation. It is no accident that the form that emerged in both Medieval Guilds and early 20th Century Labor Unions was a combination of regional and professional interests. In the HC Market, the issues are cultural, political and professional. As a result, the market has a native tendency to revert to these structural dynamics.

The dot-com land rush introduced thousands of companies with national and international ambition to the market. Throughout the buildup, pundits, and analysts consistently forecasted a radical shrinking of the overall number with a final market consolidation featuring two or three key players. Many of the largest competitors, from CareerBuilder to BrassRing based their strategies on the assumption that consolidation was inevitable.

Indeed, more than a third of the Internet-inspired initiatives went out with a whimper during the protracted economic downturn. What is surprising is the solid number of firms that survived the so-called consolidation. Relying heavily on the fact that the HC Market is intensively niched, companies scaled back their expenses, moved to organic growth, reduced unnecessary development costs, and focused on the fundamentals. Rather than a massive retrenchment to a few players, the industry emerged from the consolidation process as a tiered structure.

With the revolutionary rhetoric gone from the marketing literature, it is becoming easier to discriminate amongst the choices available to Human Resources (HR) and Recruiting professionals. Like politics, human capital is a local phenomenon with a national component.

 -John Sumser


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Materials written by John Sumser © TwoColorHat. All Rights Reserved.
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