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December 18, 2017

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Where's the Middle

For the past two decades the majority of the third-party recruiting industry has focused on the middle. That means recruiting for mid level managers, sales people, engineers, etc. In the recent economy, this space has nearly disappeared because of two converging trends:

  1. Technology.

  2. Supply and demand.

Technology. Technology makes it easy for people to communciate with each other. It also makes it easy for your clients to compete against you. Instead of paying large search firm fees, your clients say, ‘Hey, we can hire a recruiter and pay them a secure salary and give them all the technology tools to find people while they work for us. Think of all the fees we are going to save!’ And they are right. They can hire recruiters and give them security and keep from paying third party search firm fees because in today’s world it’s easy to find active candidates.

Supply and demand. The decrease in demand for people and the increased availability of them means that they don’t need you as much as they used to. Plus, they have their own staff who now competes against you. So those positions that comprised the majority of their hiring, the middle, have disappeared in availability for search firms.

Solution: So what’s left? How can you stay in this business and make a decent income and spend your time in a worthwhile endeavor? Stay away from the middle. Or if you do, make it up on volume. And if you do, then you have to pursue the middle with a venageance and use your differentiating factors as value-add to compete and win market share from your competitors. One of my consulting clients is a large international IT staffing firm. Their size and dominance and niche knowledge in their market gives them value-adding capabilities through other means to their clients. Their margins haven’t eroded as much as their competitors because their uniqueness as an organization and their specialization within IT gives them unique advantages over other competing firms.

If you aren’t a large compay, then you have to niche yourself in a place where there is some demand for your service, such as specializing in left-handed engineers who speak German. You have to be known as the best recruiter who serves that niche. You can be a smaller firm and still gain traction because of your specialization. You’ve stepped just to the left of the middle and have found a pocket of demand that is ripe for the picking.

- Scott Love

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Copyright © 2012 Scott Love