Brave New World: Making Placements – Past, Present, Future

Aug 1, 2004

Our industry’s top consultants, managers, and trainers are great leaders. They are passionate about the business. They are innovators and risk-takers. They are skilled communicators who inspire others to greater heights.

Great leaders are optimistic visionaries. They have the capacity to interpret trends and foresee the future. This “first mover advantage” creates wealth.

Great leaders convey universal messages which appeal to the hearts and minds of many.

Thomas Jefferson inscribed “Life, liberty and the pursuit of happiness.”

John F. Kennedy evoked “We shall go to the moon and return a man safely to the Earth.”

In the same way:

  • Master artists create timeless works with their vision.
  • Legendary sports coaches use visualization techniques to win championships.
  • CEOs of high-performing firms craft mission statements from their vision.

Leadership in Search

Search consultants are leaders of the placement process. We lead clients. We lead candidates. We lead candidates to accept offers with clients. The most successful can vision a placement from the start of the process. They can predict the probability of a placement after initial conversations with clients and candidates.

Top consultants start with the end in mind. They have a plan.

An exercise many know well in achieving a larger vision is to write down goals (both business and personal) and a timeline to achieve them. Another is to visualize goals by drawing a picture of where you will be and what you will have at future dates (e.g., a specific car, house, travel destination, community position.) The key here is to be as specific as possible with imaging your goals (e.g., what model and color car or what you’ll be wearing at a future business event). The hard part for many is knowing what you want.

Testing Your Vision

Ask yourself these two questions:

1) Do you know what you want?

2) Do you know how to get what you want?

The answer to the first question is about vision. It’s about being passionate about something that truly interests you. The second, how to get what you want, is about goals. This involves creating an action plan, working the plan and committing yourself to realizing your goals.

Achievement of goals begins with a personal vision.

In my training I use a fun exercise that gets to the heart of what people truly want. I pass around a rectangular 3″ x 10″ green piece of paper to each attendee blank side up. When everyone has one, they flip it. On the reverse side is a mock $10 million check made out to cash. (“Don’t try to deposit it,” I say, “The money is in another account!”) I ask the group, “What’s the first thing that comes to mind?” To the readers of this article I ask the same, “What would you do with $10 million bucks?” In other words, if money were no object, what would you do? Your answer should help you discover your personal vision.

The New World of Search

My vision for this article came from today’s converging trends, including:

The Internet’s impact on the search business.
The recent grueling job market.
Economic and demographic trends.
Articles and books on leadership.
New Media + Reality TV.
The books Brave New World and 1984.

Have you ever read George Orwell’s 1984 or Aldous Huxley’s Brave New World? Influenced by World Wars, both depict anti-utopian worlds which limit human individuality and freedoms. The stories’ negative messages are so disturbingly powerful that their effect is to shock readers into preventing the possibility of these worlds from materializing. In 1984, Big Brother is always watching. Technology is ever-present and human relationships are destroyed by the state. Likewise in Brave New World, human life has been industrialized by technological “advances.”

We in search have entered a new world with new technologies and new rules.

It is for us to decide whether the outcome will be positive or negative.

New technologies will continuously change the way we do business. If we harness them to our advantage, they can assist us. If we don’t, they have the potential to erode the foundation of our business by diminishing our relationships with clients and candidates.

Let’s take a look at making placements in ten year intervals: In 1984 (pre-PC), 1994 (pre-Internet), 2004 (today) and 2014 (the fun part). To compare decades in time and predict how future placements will be made, we need a central theme. We’ll focus on what I see is at the core of the search business information:

How we learn, store and retrieve it;
How we use it and convey it;
How we manage it and make money from it.

Two caveats before proceeding:

Caveat 1: Since I wasn’t in the business in the mid 80’s, many who were have shared with me details of those times. Thank you.

Caveat 2: The following sections focus on big picture trends. Since space here is limited, I don’t describe specific search and recruitment techniques. Another time, another place!

Making Placements in 1984

Signs of the Times: In 1984 Ronald Reagan won a landslide second presidential term as the “great communicator.” His supply side economics and tax cuts stimulated the economy and created jobs. High inflation and interest rates were the norm (the prime rate was about 12.5%), but times were better than the no-growth stagflation of the 1970’s. Aiding growth was a drop in gasoline prices from a high of $1.30 per gallon in 1982 to $.90 in 1986.

The fax machine wasn’t yet widely used by most American businesses (even though it was invented in 1843 before the telephone!) Microsoft introduced its Windows operating system in 1983 and personal computers appeared more a novelty than a business tool. Typewriters were more common than PC’s. The Soviet Union was still the Soviet Union.

Large search firms worked nationally and internationally because they had offices in many cities. Smaller firms tended to work locally in cities or regions. As a result, most recruiters met with clients and candidates in-person. This solidified relationships.

The Approach: New clients and candidates were found by telephone and networking. (“Tried and true” techniques that won’t ever go out of.) New job leads were found in newspaper and trade journalified ads. Phone numbers (vital information to recruiters) were found in industry directories, the yellow pages or through telephone operators. Imagine now sitting down at your desk with no computer to turn on. Only the phone. This might be a good idea for many today to increase productivity and earnings!

Information about clients and candidates were written and stored on 3 x 5 index cards categorized in desk-top file holders. (Remember those boxes?) Paper resumes were stored in file cabinets, organized alphabetically or by discipline.

In those days, resumes weren’t sent often to clients. Verbal presentations secured interviews. Written fee agreements weren’t yet standard practice. Since there was no physical tracking of information, legal issues inevitably flared up. Some say practices were less ethical than today; making placements was more “hard core” sales. Closing candidates was more direct such as, “Let me tell you why you should take this job.”

The Numbers: Placements were made mostly by instinct and intuition. Short-term results (closed sales) carried greater weight than longer-term strategies (relationship development). Measurement tools were basic:

Calls per day.
Job orders per week.
Candidates recruited per week.
Placements and billings per month.

In the 1980s and before, strong relationships were built based on a person’s word. The same holds true today and for the future: Our word must be our bond.

Making Placements in 1994

Signs of the Times: In 1994 the U.S. was enjoying a “peace dividend” as the world’s sole superpower — from the end of the cold war and the breakup of the Soviet Union. This gave President Clinton the latitude to “reinvent” government with deficit reduction, welfare reform and small business tax cuts. The prime rate in 1994 rose from 6% to 8.5%, reflecting a resurging economy. Gas prices were about the same levels in 1994 as they were a decade earlier (lower in inflation adjusted terms). It was the start of a multi-year bull run for the job market — a golden era for search and placement.

The personal computer was making its way to recruiters’ desks. As a stand alone, non-networked machine with little storage capability, its use as a productive tool was limited to data processing (resume writing and spreadsheets). 1994 was the year that Netscape’s precursor company, Mosaic Communications, built the first web browser. (Al Gore had not yet invented the Internet.) Though, the coming “information superhighway” was about to explode as no one anticipated.

At the same time, the world was getting smaller. NAFTA was passed in the mid 90’s creating a North American free trading region. NATO accepted former Eastern bloc nations. Europe was preparing for its monetary union and Hong Kong for its handover to China. Globalization was the watchword as old barriers were breaking down.

The Approach: Making placements was becoming less sale-sy and more consultative. Information stored in databases assisted in engaging clients and candidates. “Private” information the kind that leads to placements — still came from the tried and true methods: Sourcing by phone and effective networking.

Managing information was always the ticket to increased earnings.

Now the PC could do it efficiently at low cost.

Some firms built rudimentary databases early on. Others bought the first industry-specific database packages. With contact management software, firms could now more effectively follow up with prospective clients and candidates by logging personalized data, e.g., birthday, kid’s names, favorite sports team. And they could better track their own activity, empowering consultants to self-manage.

The Numbers: Activity-based analysis and “management by the numbers” were becoming standard. Measurement tools were expressed in ratios:

Sendouts to placements.
New job orders to placements.
Recruited candidates to placements.
Total billings to placements.

Search firms became aware of a powerful combination: Information management was central to a longer-term relationship strategy and productivity could be improved by managing results.

Making Placements in 2004

Signs of the Times: The boom years of the mid-to-late ’90’s created over 15 million new jobs, primarily in the service sector and technology-based fields in IT, communication services and bio-sciences.

The party came to an end after the year 2000. The stock market bubble popped. Financial scandals rocked the corporate world. The events of 9/11/2001 led to Mid East wars. Gasoline prices spiked to over $2.50 per gallon in some areas.

A perfect storm created a crisis in confidence.

Three million jobs were lost from 2001 through the first half of 2003. Corporate layoffs were a sign of the times. Although no specific figures are available, an informal survey reveals that over 50% of search consultants exited the business and nearly 1/3 of all firms closed shop. The largest search firms dripped millions in red ink, while many smaller firms were reduced to skeleton staffs.

With the combination of fewer jobs and top talent itching for new opportunities, companies used the Internet job boards to fill open positions. Companies also used the opportunity to data dump tens of thousands of resumes into their corporate databases. In addition, third party recruiters went to work in the corporate world and began putting to use proven search techniques. All in the attempt to save budgets, control expenses and save the CEO’s job.

With an eye toward reelection and to stimulate the economy, George Bush II cut taxes while boosting military spending to fight terrorist wars. With inflation non-existent, the Federal Reserve dropped interest rates to 45 year lows (a 1% prime rate) which boosted economic growth and rekindled the job market. The massive fiscal and monetary stimulus boosted demand and led to over one million new jobs created from Q2 ’03 to the Q2 ’04. For those who survived, as some say “the worst job market in 30 years,” the Internet created new rules of the game.

The Approach: With networked PC’s, powerful databases, digital high speed Internet all at low costs — search firms can now “data mine” and manage information more efficiently than ever before. Key contacts are downloaded from corporate websites. Firms tap into on-line candidate databases to make them their own. The “Internet Researcher” is a valued member of the search team.

Today most agree business is bouncing back. But somehow it’s different. Tougher to get higher fees. Clients are more demanding, very selective and taking a longer time to make hiring decisions. At the same time, top candidates have many options. In high demand niches and geographies (e.g., legal in the Northeast corridor, bankers in the Sunbelt and heath-care nationwide), times are very good, because talent is scare. The premium, again, is reverting back to the relationship with the candidate.

Those who survived the last three years are adapting to a new data-rich, Internet world. Top consultants are asking more insightful questions before accepting search assignments. In working with candidates, they are screening rigorously before taking action. Behavior-based interviewing, testing motivation and covert reference checking are becoming common practices.

Search firms are harnessing the Internet to offer clients value.

Firms are developing a long-term relationship development strategy in conjunction with building a brand that stands the test of time. To demonstrate value, search consultants must be management consultants, industry experts, trusted advisors and career developers.

For candidates:
What are the true motivating factors which will prompt a career move?
How can we raise their confidence and prepare them for interviews?
How can we advise them on their career goals?

For clients:

How can we make their lives easier?
What’s the “value proposition” of our service?
What industry and competitor knowledge can we offer?

Building brand loyalty is paramount to establishing exclusive relationships.

These are the kind of relationships in which clients call us first with new search assignments. And, the kind where top candidates call us with jobs they want — whether they be with specific companies of interest or whether they find the leads on the Internet. We know we have the right relationship, when candidates see the value of the service we provide.

The Numbers: The combination of the Internet’s impact and the recent job market has made search firms rethink their business models. Productivity metrics are used to manage profitability:

Quality search assignments per 100 calls.
Top tier, placeable candidates recruited per 100 calls.
New client and candidate calls per hour.
Billings per time period (hourly, daily, weekly).

With job boards prevalent and candidates exploring multiple opportunities, search consultants are getting wiser. They are developing exclusive relationships with clients and candidates by asking, listening and delivering what their “customers” want. The by-product is a stream of valuable referrals into the future. Many know it well: Focus on your customer and the bottom line takes care of itself.

Making Placements in 2014

Signs of the Times: In 2012 the U.S. elects its first female president. (Guesses anyone?) Interest and inflation rates are low by historical standards — in the mid single digits — as “information everywhere” continues to reign in price pressures.

In 2014 the service sectors dominate. Greater than the influence of technology are demographic trends. Aging baby boomers stretch the U.S. social security trust fund to the limit. Energetic seniors demand higher levels of service in healthcare, hospitality and financial areas. (Good disciplines to specialize in.)

Impending Crisis: Too Many Jobs and Too Few People (a book published in 1993) accurately forecasts the U.S. labor market. In 2010 there are 167 million open jobs with only 157 million people to fill them: A shortfall of 10 million. The largest growing occupations are in computer services. The greatest shortage is in healthcare.

In select niches, search fees rise to 40%+.

The U.S., still the sole economic and military world power, is losing ground to China and the Far East. The world has partitioned into three primary trading blocks: The Americas, Europe and Asia, including the sub-continent. 80% of all U.S. manufacturing is outsourced to low cost, newly-developed countries. Ever since gas prices hit $4.00 per gallon in 2010, OPEC’s influence has diminished. Advanced energy sources hydrogen, solar and wind are feeding an increasingly power hungry world.

The Approach: Visual Communication Devices (VCD’s) have a profound impact on the way search consultants do business. The phone and keyboard of a decade earlier are obsolete. PC’s now double as video-phones. Great leaps in bandwidth and storage capability enable sending digital audio and video messages instantly, globally.

Standard IT formats morph from words to images. Clients and candidates can observe our presentation from anywhere. When we meet “face-to-face,” we can see them and they can see us. We no longer refer resumes to clients. We conduct, record, save and send digital video interviews.

As the world becomes increasing smaller, physical location is less important. Distance and time are squeezed. Virtual offices and flexible office arrangements become the norm. The “wireless world” connects all seamlessly. Large search firms are dispersed into virtual deal teams. The major job boards no longer exist in their former forms: In the talent drought, they were not producing value relative to their costs.

With all the technological advancement, search firms thrive because humans like to deal with humans. Artificial intelligence is still decades away.

Brand and brainpower are the new capital.

In 2014 there are half the search consultants practicing as compared to the height of the late 1990’s. This is not a reflection of the times. In fact, the shortage of service sectors jobs is creating tremendous demand for search services. Rather, firms large and small across a wide spectrum of industries bring in-house highly skilled consultants to save costs. CEO’s have gotten wise: Human capital is viewed universally as the most valuable of all corporate assets. And companies now pay up for the best search talent.

Independent search consultants are now management consultants — in not only talent acquisition but also talent retention. Clients work with fewer consulting firms and are screened for fit — culturally, ethically and in working-style — before engagements are granted. Since most HR functions have been eliminated, search consultants are seen as outsourced employees. Human capital is viewed by C-levels as a strategic imperative.

The term, recruiter, is used less and less.

Top search consultants are career managers.

In 2014, consultants no longer “recruit.” They grow “communities of networks.” They accomplish this by developing enduring relationships with top-performing candidates in the same way sports agents have done with athletes for decades. They focus — not on the next placement — but rather on how they can assist candidates in achieving their career goals.

The Numbers: To quantify and track results in this high demand, talent-short world, new client-centric criteria are used:

% time spent on high value, customer-focused activities.
Exclusive candidate agent contracts signed per month.
Repeat client engagements per quarter.
Client and candidate satisfaction scores.

In summary, the placement-focused model of the 1980s transforms into a client-centric one by the second decade of the 21st century. Performance and activity is still managed by the numbers.

The shift is in what’s being measured. Quantity of results (e.g., sendout volume) is replaced by quality of experience (e.g., client and candidate satisfaction). Those who adapt profit more and build wealth.

What’s in store for the search industry in 2024 and beyond? Use your leadership and visionary abilities. Email me your predictions at and I’ll return send my “Double Your Billings Scorecard.”

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