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The web churns out new bits of culture at an astonishing rate. The rule seems to be like the rules surrounding the latest hip night club....It's vogue until everyone else discovers it. We bet that Slashdot will have a longish life even as the edge wears away when it is increasingly discovered.

Poking around the site, you'll find strangeness that includes a "South Park Spoof Of Star Wars" and pointers to UserFriendly, a little known daily comic strip that makes Dilbert look like the people Dilbert complains about.

Both sites take a range of advertising.

Korn Ferry (KFY) went public on Feb 12. No industry skyrocket (but a reasonably safe bet) the stock opened at $14 and now trades in the $12 to $13 range.

IIRC doesn't bill for strategy! Though their advice is limited to placement within their growing network, advice is part of the service.

- John Sumser, © TwoColorHat. All Rights Reserved.

IPOs

The funny thing about the Internet components of these offerings is that, while they point to market trends, they are hardly market leaders. The most interesting thing about the performance of these offerings, should they make it all the way through the maze, is that they will set the foundation level for company valuations in the near term future. If the Internet bubble continues and these companies get swept up in it, our industry is going to start acting funny.

It's already extremely weird to talk with entrepreneurs who have, to their credit, amassed a sales volume of $5M to $10M. In the windstorm of Internet hype (coupled with the recent $35M acquisition of DICE), everyone is planning the interior design of their inevitable Bentley. Meanwhile, the actual value of a job posting (the industry's core commodity) is rapidly approaching zero.

Although we believe, more strongly than most, in the long term importance of our industry, we're passing through a difficult inflection point. As companies in the business learned the intricacies of marketing over the past year, the underlying technical development has slowed to an agonizingly incremental pace. At the same time, real labor shortages are looming. In January, the real number of bodies in the 30 to 45 year old demographic will begin a long 15 year decline. Nothing about any of the offerings addresses the fact that the core commodity of Recruiting (people working in jobs) is declining. Essentially, they offer last generation solutions to the problem during the final year of the market's peak.

The real utility of the Net as a Recruiting tool will begin to show itself during the year 2000 (after the lights come back on). While we have faced shortages driven by economic growth, the problem will compound in a critical way beginning next year. To navigate effectively in the coming environment, one will need to look beyond the fever associated with ownership financial plays and focus on the rapidly shifting fundamentals.

- John Sumser, © TwoColorHat. All Rights Reserved.

IIRC

Today's article concerns another player with an alphabet soup for a name. IIRC ("ear-see"?) is the yin to RSLLC's yang. (We must be in a facial analogy mode.) Where RSLLC specializes in the smooth functioning office space, IIRC ("ear-see"?) focuses on job ad distribution and online recruiting strategy. The small Indianapolis based company has cobbled together an interesting portfolio of job boards into a distribution network that rivals or exceeds operations with much deeper pockets.

Run by Bruce Robbins, ex Detroit Tigers pitcher and former marketing VP at the ill fated Online Career Center (now a fully absorbed part of Monster.com), IIRC has amassed an interesting collection of clients in its extremely short life. Their proposition is simple..."We'll help you figure out how to spend your Online Recruiting Budget."

As you know, the toughest part of building a business in this space is staffing and funding the development of a sales force. Each of the job boards in the IIRC ("ear-see"?) portfolio occupies a special niche but lives with limitations in its ability to field a sales team. The pitch to the job boards was simple an effective.."We'll sell for you." As a result, Robbins has established a market foothold by leveraging the strengths and weaknesses of both sides of the equation. The customers can not make sense out of all of the choices, the services can't effectively reach all of the customers to provide adequate differentiation.

As a result, Robbins is able to use the various job boards as a palette from which to construct a clearly articulated strategy for each customer. The bias associated with Ad Agencies selling their in-house offerings is dropped from the equation. Since the company is decidedly not pioneering a complex technical play, it can focus on adding the required human dimension to each transaction.

There are two critical dimensions in the future of these sorts of services (which we're about to start calling Media Planning) and all of the various competitors in the space will have to deal with them. First, and most importantly, the future of the job posting is suspect. Any long term play in the "Recruiting Strategy" space will require the ability to deploy services that help Recruiters build one to one relationships with candidate pools. Second, helping the market understand that hourly billing is the key to service provision is a task that has daunted the ad agencies. Players like Robbins and IIRC make the future brighter in this regard.

It's hard, we know, to begin a business that will change into something radically different 18 months after it breaks even. That is the challenge faced by all of the players who lust after the middleman space. At IIRC ("ear-see"?) , they have a running start, a track record of extreme customer satisfaction and a management team built on seasoned web Recruiting players. They are headed in the right direction.

- John Sumser, © TwoColorHat. All Rights Reserved.

RSLLC

In order to run a functioning software development process, many Electronic Recruiting Vendors have frozen their "customer definition". It's a usefully human way of approaching a problem like designing for the web. If the world of the customer is a fixed thing, then an accommodating product is straightforward.

But, entire staffing functions are being outsourced each day. Companies are building internal temporary agencies. Contract Recruiting is blossoming. Ad agencies are purchasing search firms. And so on. The frozen customer isn't really and a part of the industry's slowness to change is the fault of the job boards. They've missed some of the market evolution while they were building their solutions.

It's an old story...great generals who continue fighting the last, great war; companies who develop an innovation without continuously watching the market.

We are extremely impressed with the offerings of a rapidly growing Colorado company, RSLLC (Recruiting Solutions, LLC). RSLLC has a trio of integrated offerings that appear to avoid the temptation to design old school ideas into the product. The market seems to agree. The company has grown faster during its first year than any company we've tracked since the inception of our industry.

There are three tools in the RSLLC arsenal.

• A Recruiting Center (for Internal Administrative Processes)
• A Vendor Management Tool (designed to handle the complexities of real world management of staffing vendors)
• A Job Board (for public display of jobs and on-the-web resume collection)

We're pretty sure that RSLLC has hit a home run. While much of the industry is shoe-horned into old stereotypes, RSLLC's suite of tools segments the process cleanly. In doing so, they point the way to future developments.

Nice job!

- John Sumser, © TwoColorHat. All Rights Reserved.

Changing Tactics

Certainly, the web can be used effectively to proactively discover candidates. Sourcing, as they call it in the third party sector, is the act of identifying likely candidates who are already gainfully employed. As the supply of candidates continues to decrease, corporate Recruiters will have no choice but to get more effective in this area. But, johnny-come-latelies that they are, the barrel is already empty. With the college graduate unemployment rate at 1.9% (much of that in temporary work shifts), the retention wars have begun.

Workforce participation is the government's measure of labor utilization. It answers the question "what percentage of people are interested in working?". Across the economy, workforce participation hovers below 70% and is often seen as a reservoir that might provide bodies in a tight market. In the subset of people with college educations, however, the figure is nearly 80%. A fair portion of the "surplus" pool is composed of parents who are currently raising families.

There are very few college graduates available in the labor force. And, it gets worse.

For the 15 years beginning in 2000, the number of available 25 to 44 year olds in the economy will be lower than this year's peak. Over the next 15 years, the decline will be as steep as 15% fewer workers in this age group than we have today. The first two year's declines are large enough to consume every available body in today's unemployment lines. Solving the problem requires much more than aggressive sourcing procedures. The workforce, in the immediate future, is going to depend on classes of workers that we have heretofore ignored or assigned lower status. Meanwhile, the requirements for increased technical sophistication, global savvy and entrepreneurial skills will be more highly valued than ever.

The problem is neither simple nor cheap to solve. Widely broadcast job postings, effective research and even precisely targeted delivery of job ads will only address a small portion of the question. It's a problem of supply and is more like the shortages of "Tickle-me-Elmo" and "Cabbage Patch Dolls" that some parents have faced before Christmas. Oh sure, there will be ads. Throughout the Christmas shortages, you could always buy the item in short supply for ten times the retail price.

But, for those who can't plan on spending their way out of the crisis, today is the time to consider planning alternatives. The question is simple. "How will you ensure the availability of qualified candidates over the next five years?" The answers are complex and will involve changes in priority and resource allocation from the top to the bottom of the organization.

In this light, it's interesting to see the competition between job boards, third party firms and other recent entrants as a battle for the hearts and souls of candidates who will use the services several times over the course of the shortage. If you're trying to evaluate the eventual winners, look at the ones who are answering this question most effectively. Few of the current players rise to the top of the list even though the problem begins in earnest next year (10 months from now).

The solutions to the labor shortage problem will involve a spectrum of tools ranging from a redefinition of the boundaries of the company to increasing numbers of industry supplied scholarships to lots and lots of free training provided by companies who look like job boards today. The trick, over the long haul, will be learning to see potential candidates as a corporate resource, not an administrative headache.

- John Sumser, © TwoColorHat. All Rights Reserved.

Customized Onsite Consulting

We've recently added Nicky Gordon to our staff. Nicki is a seasoned recruiting research professional and an acclaimed trainer with extensive hands-on experience solving sourcing problems with the Internet. She will be delivering these customized training programs in which:

• We will explain how to make a clean move to web recruiting as the principal source of prospective candidates
• You will receive the tools needed to search the Internet effectively including A CD with over 30 Software Tools to get you started.
• You get the full benefit of our "Advanced Searching And Sourcing Seminar" without having to leave the office.
• You gain the knowledge needed to use Spiders and Robots, advanced Search Engine Techniques, Candidate Pool Access and the development of Just-In-Time Sourcing techniques. We'll teach you the skills and tools used by visionary recruiters.
• You will get a detailed course of action; we will walk you through the steps involved in going from Job Order to Placement.
• All Examples are done Online specifically tailored for your operation.