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It is better
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John Sumser

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John Gall


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Rates and Demographics (From The Archives)
(June 25, 1999) We've been digging through the unemployment and census statistics for a client. Even though we know this stuff, seeing it again in detail is a continual source of refreshing reminder. Did you know that:
  • The unemployment rate for holders of college degrees (bachelors and above) is 1.8%!
  • Less than 25% of Americans have a four year (or more) college education?
  • Unemployment for those with High School Diplomas (or less) is over 8%.
  • The fastest growing occupations (in numbers) do not require a college degree.

    Unemployment numbers (the percentages) are more complicated than a body count. They make all sorts of wild assumptions (the kind of stuff that keeps government statisticians happy and busy). Let's walk through some "back of the envelope" thinking about those numbers.

    Roughly, there are 120 Million people in the American workforce. (The others are too young, too old, or not working right now.) If 25% have a minimum of a four year college diploma (that's high by a couple of points), there are 30 Million college graduates in the economy. If the unemployment rate translated directly into the number of people who are out of work (and it doesn't quite), here would be slightly more than 360,000 bodies in play. You might well ask additional questions about the mix of training in this group and so on. We know that there's a large pocket (say 50,000) who have PhDs and are trying to get one of the non-existent college professorships. (They'll have t wait another 10 years for those jobs.)

    So, 290,000 people are available immediately to fill the more than 2.5 Million discrete job postings. (There are over 35 Million listings but duplication is the current name of the game.) That's the numerical essence of the shortage we've been talking about. The other 2 Million openings are going to be solved in one of three ways:

  • The person who takes the job will be recruited from a competitor.
  • The job will go unfilled.
  • A less than perfect fit will be acquired and given additional training.

    As we survey the landscape, it seems that the "job board" business is overly focused on the impossible problem (filling jobs for college graduates) while the easy one goes unresolved. By leaps and bounds, the economy is built on people who don't have college degrees. And, there are plenty of people available to fill at least some of the openings.

    Meanwhile, the Recruiting profession is cluttered with misconceptions about the "ethics" of competitive hiring practice. As we discussed last week, an odd distinction (it's a carryover from an earlier time) that separates directly employed recruiters in HR departments from the subcontractors who serve them. There are really no ethics involved. If you have an opening that requires a college diploma, there is (at the very best) a one in ten (10%) chance that you will find someone who is available to take the job. 90% of those placements will have to come from one of the three options we outlined earlier.

    - John Sumser, © TwoColorHat. All Rights Reserved.

    Small Businesses (From The Archives)

    (June 23, 1999) Off an on, we hear a very interesting statistic. No validation, mind you, we're just repeating a bit of info that seems to get repeated.

    80% of the customers (recruiters) on most job boards are small to medium sized businesses who post an average of 3 jobs per year.

    If its true, Electronic Recruiting is reaching an entirely new audience. Typically, the Recruiting marketplace is composed of companies that are large enough to have a formal Recruiting/HR Department. They come to the game with procedures, processes and the ability to build a job requisition.

    If it's really the case that the small business owner is the largest (numerically) audience in online Recruiting, there are some interesting consequences. A Pareto analysis begins with the assumption that 20% of the customers bring 80% of the value. The question, in this case, is "what does the other 80% mean?"

    First of all, we take this statistic to mean that the playing field (in Recruiting) is somewhat leveled by the web. If the numeric bulk of the customers are small operations, the web is making it easier to compete with large operations.

    Secondly, the importance of content that teaches the fundamentals of Recruiting has been vastly under-rated. These small companies rarely have as much as a standard application form or a process for developing a requisition. Simple tools that help without burying the learner in data will be meaningful discriminators.

    Third, the small business is opening as a market for a broad range of Recruiting services. Imagine a sales pitch that begins with "We can help you with the confusing maze on the web." Differing price points are required, for sure. But, this end of the market has rarely been pursued as a part of a Recruiting service market strategy.

    In all, we're beginning to see a change in the market caused by the web. As companies in the Job Board, Infrastructure or Online Recruiting Businesses design their plans for "global dominance", it will be important to remember the impact of the small shop.

    - John Sumser, © TwoColorHat. All Rights Reserved.

    Strategy (From The Archives)

    (June 22, 1999) By now, everyone in this audience has been on the receiving end of a pitch about Internet Strategy. As we plan the narrative components of our next industry analysis, we've begun considering the essential components. As we started to lay out the components of an online strategy, we gained a key insight into the rampant frustration in the Electronic Recruiting Industry customer base. No single supplier, that we know of, offers a comprehensive solution. Everyone sells pieces (though many claim to sell complete toolkits).

    Here's our current outline. If we've missed a piece, please let us know.

    • Objectives Of The Strategy
      • Cycle Time Reductions
      • Cost Growth Containment
      • Candidate Acquisition Costs
      • Technical Budget and Schedule
      • Workforce Competence Norms
      • Candidate Percolation
      • Resume Database Freshness
      • Single Interfaces
        • Posting
        • Resume Review
        • Candidate Tracking
        • Status and Reporting
        • Training
    • Business Model
    • Website Development and Integration
    • Website Content Acquisition
    • Posting Process
    • Targeted Candidate Acquisition
    • Research (Direct Marketing)
    • Sourcing Process
    • Media Research, Planning and Execution
    • Traffic Development
    • Response Management
    • Training
    • Applicant Tracking
    • Intranet
    • Extranet (Vendor Integration)
    • Hardware / Network Design
    • Bandwidth Requirements
    • Software / Platform
    • Integration
    • Maintenance and Improvements

    - John Sumser, © TwoColorHat. All Rights Reserved.

    The Onslaught Of Changes

    (June 21, 1999) What's something we can do that is quick, impressive, (preferably) inexpensive and will drive traffic while keeping our website sticky? The question reverberates around the strategy conversations in the industry. In response
  • Net-Temps has launched a new "desktop" that is the beginning of their plan to build interest-based portals;
  • CareerBuilder has opened the doors on its "mega-search" tool that integrates the responses from a broad number of job boards;
  • Job Options (nee Espan) has increased its press release volume;
  • HotJobs has begun advertising on MTV
  • Monster.com is launching its free agent service in a week or so
  • World.hire, after a couple years of careful formulation, is emerging as hire.com.

    Meanwhile, everybody is doing everything in a fit of "brand development". New brochures are popping up; sales teams are changing; teams are expanding and dollars are flying, at least two IPOs are in the queue. It looks as though the financial stakes, at the top of the game, are rising.

    We've always maintained that traffic development, coupled with a stream of changing features (improvements) is central to the top end media play. Inevitably, web Recruiting sites are becoming media companies with large requirements for unique content and services. As the holders of the cash cow for publishing (online and off), the quest for unique brand identity and relevant content is a matter of survival.

    It's an interesting phase.

    The marketplace is starting to split into a number of pieces, each with their own value. We see:

    • High End Segmentation (The Major Job Boards)
    • MidRange Segmentation (Regional and Professional Services)
    • The Emergence of The Boutique Low End (Focused Plays from Public Search Firms)
    • The Beginning of The Emergence of The Corporate HR Department as a Publisher (a la World.Hire/hire.com)
    • Blue Collar Services (For the 75% who aren't online yet and don't use resumes)
    • Whopping increases in the exaggeration of traffic statistics
    • Ad/content budgets that dwarf technical budgets by two orders of magnitude
    One thing is getting clearer. The use of passive profiling, which can help really flesh out the passive candidate (who doesn't own a resume), is on the rise.

    The summer looks to be a time of rapidly increasing rhetoric that discloses some small incremental improvements in the actual services delivered.

    - John Sumser, © TwoColorHat. All Rights Reserved.

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