(November 30, 2004)
The value of a Resume is deeply influenced by demographics, specific skill categories and the local unemployment rate. The American economy is undergoing a sea change in the availability and cost of workers. The end of the baby boom has created a circumstance in which seasoned technical employees are actually declining in number. The value of each employee in this category is rapidly increasing. As a result, the cost of the information, which describes these employees, is also rapidly rising.
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Prior to the mid '90s, recruiters could safely assume that there was an infinite supply of Resumes from individuals who were qualified to accomplish a specific job. This is simply no longer the case. Recruiting, since that time, has involved the delivery of a constant stream of value to just the right target candidates.
In the "old days", Resumes were so abundant that it was appropriate to consider them a worthless commodity that simply required processing. In today's economy, where Recruiting budgets are often developed using a candidate acquisition cost target, the misinformed perspective that an hourly fee is adequate to cover value added Resume acquisition is not simply out of fashion. It is the hallmark of a company that misunderstands the market.
To place things in perspective, while the current unemployment rate is about 4.2%, the unemployment rate among college professionals is 1.8%. This means that of all of the available potential candidates with a college degree, slightly more than 600,000 are immediately available for work. A group of 15,000 Resumes displaying availability characteristics would constitute over 2% of all the available workers in the market. It would be likely to include over 20% of the available technical workers in the market.
The ownership of such a database would enable a company to conduct broad market surveillance, compensation surveys, polls, workplace development strategies and other competitive intelligence gathering. The value of a database of niche specific Resumes is incalculable. However, one benchmark might be the licensing fees that some companies charge for access to a database of this magnitude. It is common for a database of 15,000 Resumes to be sold as a subscription product with fees that range from $1,500 to $25,000 per year (to hundreds of subscribers). Many third party staffing firms are able to generate millions of dollars in annual fees from much smaller databases.
Specific Category Shortages
It is specific category shortages that really drive value differentials in Resumes. Obviously, the extremely short supply of Information technology workers creates a market environment rooted in scarcity. Just as salaries in IT are rapidly escalating, the values of the Resumes that allow companies to hire IT workers are growing.
The critical shortages of IT workers make it reasonable to suggest that a premium of 100% could be added to the value of each IT Resume.
Price Vs Cost
Generally speaking, there is little relationship between price and cost. Price, what a buyer pays for a specific good or service, is determined by prevailing market rates. Cost, what a seller expends to produce a good or service, is only seen as a component of price in very special circumstances. Resumes are routinely sold in a variety of settings. From databases to executive search services, the price of a Resume varies based on how it is positioned within the service.
- John Sumser © TwoColorHat. All Rights Reserved.
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