- 2009 will be a painful year for recruiters. It’s obvious, but how could I leave this off the list? We’re in a recession, and as employment numbers continue to fall it will get worse for recruiters before it gets better. When will the turnaround come? Hiring typically lags behind corporate profits, so don’t expect recruiting activity to pick up again until after companies’ profits start rising again.
- There will be less of us. As was pointed out to me today on the Recruiting Animal Show, I’m an old salt in the recruiting world at the not-so-tender age of 34. The last time I saw our profession contract was in the recession of 2001, when we simply had too many recruiters trying to fill too few open positions and thousands of professionals moved on to greener pastures. The strong and the lucky will once again survive, and those who are not at the top of their games will move on. In the last recession, many went into real estate. This time it will be different.
- Recruiting stocks will rebound. As an industry, the public companies whose businesses connect people with employment opportunities will rebound before the year is through, including Monster, Taleo, DICE Holdings, Kenexa, Manpower, and Spherion, barring any issues specific to the individual companies. If the economy is so scary, why predict a rebound? The stock market is a forward-looking discounting mechanism, and in the next few months I expect the worst expectations to be priced into the stocks of these companies, and for investors to begin to look forward to better results in the future. On the other hand, Workstream will finally be delisted.
- Social Media will play an ever-increasing role in our personal and professional lives. Yeah, this is a safe one. There are still plenty of people whose lives have not been touched by Facebook, LinkedIn, Twitter, and others, but there are less every day. More and more, it’s where people, young and old, are communicating and managing relationships, and smart recruiters always fish where the fish are. Also, the pace of innovation in Social Media will not slow down any time soon. Why? Because even though venture capital money is drying up, it does not take much capital to build these things. (BTW, I’ve linked above to my profile on each of these social networks, so be my friend!)
- Social media overload/backlash. With social media innovation continuing at a blistering pace, we are constantly being barraged with new, cool-sounding social tools and networks. There are only so many hours in the day, and we are forced to pick and choose the services that best meet our lifestyles and objectives. In the fight to stand out from the pack, implicit promises are being made about why every single service is the best. Inevitably, people are going to be disappointed with those that do not live up to expectations. The best will continue to grow, while the ones that do not stand out from the crowd will quietly go away.
- Social networks will make finding a business model their top priority. They’ve proven that they can attract huge audiences, but here’s a pop quiz — which of the following social networks made money in the last year — YouTube, Facebook, or Twitter? Not a single one. And in this economy, not even Google, YouTube’s parent company, can afford to have a money-losing property. Finding a solid revenue source to sustain their torrential growth will be the goal of every major social network.
- …and the medium-sized players won’t make it. The biggest networks have or will raise enough investment money to give them time to find workable revenue models. The truly tiny social networks will find their niches and targetted advertising dollars will follow. It’s the medium-sized services — the Facebook wannabes — that are going to fall by the wayside, being snapped up on the cheap by acquirors or simply going out of business.
- Vendor shakeout. It’s not only the social networks that will see a shakeout. This year will be brutal on the vendors that serve our profession. Less hiring = less recruitment spending = less business. Layoffs, consolidation, and bankruptcies will be norm until things stabilize later in the year. The strongest, and those with the best relationships with their customers, will survive.
- Recruiters will try to shift towards the most cost-effective tools. Not the cheapest, but the ones with the most return on investment. Of course, recruiting departments do a notoriously poor job at measuring their own results, so I expect to see a lot more focus on metrics and measurement. Expect plenty of debate over how to properly evaluate recruiter performance and industry metrics in the next few months.
Reading back over my list, I am struck by how almost every single prediction hinges on the state of the economy, and I guess that sounds right to me. I can think of nothing that will be an bigger influence on our professional lives in the coming year.
I know this all sounds gloomy, but it’s always darkest before the dawn. We’re already a year into this recession, and nothing lasts forever. When the smoke clears, we’ll be back in the growth part of the economic cycle — and they are always boom times in recruiting.
What do you think the new year will bring? Let’s hear it in the comments!