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Why It Works

(November 03, 2000) As pragmatists, we have little time for questions like "Why". The academic arena concerns itself with "Why" while those of us charged with running businesses are better served with questions like "How", "When", "Where", "Who", "What", "If" and "Whether". "Why" is usually better left in the hands of a company's founder. It tends to disrupt the workflow. If it has to be addressed, "Why" belongs to strategic planning and budget processes. It's not really a democratic question.

The "How of it" is simple. As we mentioned in our last article, all tools degrade in effectiveness in a shortage driven marketplace. A prudent manager (or recruiter) must constantly search for new weapons while polishing skills on the current set. As more customers discover a given tool, its ability to generate results declines.

To reiterate, it's an arms race.

The underlying reasons are simple and combine basic mathematics with first mover advantage.

When a new service or form of service opens its doors for business, it introduces novelty into a niche. In the early days of job boards, it was not unusual for a customer to receive 125 valid responses to a job opening. The ratio of jobs available to online candidates was skewed in favor of jobs.

As word of the successes of very early adopters spreads (that's what marketing and sales forces do), more customers join the fray. This increases the number of jobs in the mix and effectively reduces the likelihood that a given job will get a match. Three years into the job board business, the problem was too many non-qualified candidates. Quantity was declining, but quality declined at a faster rate.

Ultimately, the effectiveness of a given tool settles at a market rate. With 70,000,000 job 'postings', it's little surprise that current results are so low. A company that posts a single job to the internet risks receiving no valid responses. Targeted carpet bombing services (like those offered by RecruitUSA) offset the risk but are vulnerable to the same dynamics.

As each niche opens up, the same trend seems to take place. So, early users of the 'left handed astrophysicists career board' should expect better results than later users. Even the tiny niches will settle into a predictable delivery of a results stream, however.

This basic trend extends to every new addition of the arsenal. Today is a very good time to be using free agent sites. It's a great time for referral networks and placing computers in the homes of every employee. On the other hand, you can tell from the AIRS moves into diversification that the desktop based candidate acquisition programs (like our Seminar in a Box) are beginning to show the same declining effectiveness.

It doesn't mean that the tools don't work. It just means that there are very real limits to the ultimate utility of a given tool. Knowing that tools are subject to decreasing relative effectiveness should be the source of strategic inspiration. Having a function dedicated to the discovery of new tools as they emerge is critical to maintaining a competitive edge in the marketplace for candidates.

Not getting this simple principle is the reason that so many CDI employees are watching their stock holdings erode. It's at the root of the massive decline in staffing company valuations. It's the barrier that new entrants have to figure out.

It's also a platform for real marketing success. Imagine the success of the player who figures out how to reverse this trend for its customers.

- John Sumser

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It is better to not be on the web than to be on and not know why John Sumser Reality is more complex than it seems. John Gall It's better to do a few things really well than than to do a lot of things badly. If you can't make the necessary commitments of time and energy to your electronic marketing efforts scale back your plan. John Sumser All material on this website is the property of IBN (The Internet Business Network: interbiznet.com) You may download a copy for personal use. Redistribution without permission is strictly prohibited. All material on this site is © 1995 - 2000 by IBN OUR HOME	Daily News. Archived Weekly. Click Here For The Current Issue. Click the 'OK' to make the ERN your default homepage Read Today's Interbiznet Bugler 2000 ERI Executive Summary Requires Acrobat. The 2000 ERI is now available. Order your copy today! If you wish to receive the Electronic Recruiting News as a daily email, please use the form at the bottom of the page to subscribe or unsubscribe. Thank you - Interbiznet Staff Why It Works (November 03, 2000) As pragmatists, we have little time for questions like "Why". The academic arena concerns itself with "Why" while those of us charged with running businesses are better served with questions like "How", "When", "Where", "Who", "What", "If" and "Whether". "Why" is usually better left in the hands of a company's founder. It tends to disrupt the workflow. If it has to be addressed, "Why" belongs to strategic planning and budget processes. It's not really a democratic question. The "How of it" is simple. As we mentioned in our last article, all tools degrade in effectiveness in a shortage driven marketplace. A prudent manager (or recruiter) must constantly search for new weapons while polishing skills on the current set. As more customers discover a given tool, its ability to generate results declines. To reiterate, it's an arms race. The underlying reasons are simple and combine basic mathematics with first mover advantage. When a new service or form of service opens its doors for business, it introduces novelty into a niche. In the early days of job boards, it was not unusual for a customer to receive 125 valid responses to a job opening. The ratio of jobs available to online candidates was skewed in favor of jobs. As word of the successes of very early adopters spreads (that's what marketing and sales forces do), more customers join the fray. This increases the number of jobs in the mix and effectively reduces the likelihood that a given job will get a match. Three years into the job board business, the problem was too many non-qualified candidates. Quantity was declining, but quality declined at a faster rate. Ultimately, the effectiveness of a given tool settles at a market rate. With 70,000,000 job 'postings', it's little surprise that current results are so low. A company that posts a single job to the internet risks receiving no valid responses. Targeted carpet bombing services (like those offered by RecruitUSA) offset the risk but are vulnerable to the same dynamics. As each niche opens up, the same trend seems to take place. So, early users of the 'left handed astrophysicists career board' should expect better results than later users. Even the tiny niches will settle into a predictable delivery of a results stream, however. This basic trend extends to every new addition of the arsenal. Today is a very good time to be using free agent sites. It's a great time for referral networks and placing computers in the homes of every employee. On the other hand, you can tell from the AIRS moves into diversification that the desktop based candidate acquisition programs (like our Seminar in a Box) are beginning to show the same declining effectiveness. It doesn't mean that the tools don't work. It just means that there are very real limits to the ultimate utility of a given tool. Knowing that tools are subject to decreasing relative effectiveness should be the source of strategic inspiration. Having a function dedicated to the discovery of new tools as they emerge is critical to maintaining a competitive edge in the marketplace for candidates. Not getting this simple principle is the reason that so many CDI employees are watching their stock holdings erode. It's at the root of the massive decline in staffing company valuations. It's the barrier that new entrants have to figure out. It's also a platform for real marketing success. Imagine the success of the player who figures out how to reverse this trend for its customers. - John Sumser **************************************************************************************** Win a 17-Day Safari to Africa for Two! Learn how you can win a trip to Africa simply by becoming a Vault member and referring your colleagues to our services. Your free Vault membership allows you to: --Post jobs FREE on Vault's Job Board --Post jobs on top job sites and newspapers with one click --Network with other HR professionals --Receive Human Capital, Vault's free HR e-newsletter Vault.com: the insider career network ************************************************************************************** Contacting Us: Call, fax, write, email. We'd love to talk about your project. All material on this site is © 1995 - 2000 by IBN: interbiznet.com (The Internet Business Network), 346 Starling Rd., Mill Valley, CA 94941 415.380.8244 staff@interbiznet.com To Subscribe or Unsubscribe From the ERNIE...** Enter email: Enter name:	1st Steps In The Job Hunt - Face 2 Face - Two Tales - Salary Survey Sites - Email Resumes - Gubmint Jobs FOR RECRUITERS: Free Email Newsletter Recruiter's Toolkit (New) Interbiznet Bugler Seminar In A Box Top 100 E-Recruiters Industry Analysis - 2000 - 1999 - 1997 - 1996 ERN Archives Our Rate Card Last Week's ERN October 29, 2000 Consolidation JobAA Gilligan Dot Idiot Dot Pro Career Erkel Losers ERN Archives Stocks We Watch Public Companies in Electronic Recruiting AOL CareerBldr CareerEngine CBS Central Newspapers CMGI Dow Jones E-cruiter General Electric Headhunter.net HotJobs.com IDG Inktomi Knight Ridder Microsoft New York Times Omnicom Oracle Penton PeopleSoft Restrac (Web Hire) SAP Student Advantage TMP Top Jobs On The Net Tribune US Search Co VerticalNet Washington Post Yahoo ZDNet Pending IPOs - None Public Staffing Cos ACSYS Adecco AHL Services Alternative Resources American Consolidated Analysts Int'l Barrett Butler Career Horizons CDI Co-Counsel Comforce Computer Horizons Computer Task Grp Consolidated Tech Grp Data Processing Resources Employee Solutions General Employment GTS Duratek Hall Kinion Headway Heidrick Heist Interim IT Staffing Joule Keane Kelly Services Kforce Korn-Ferry Manpower National Technical National TechTeam Norrell Olsten On Assignment Outsource Int'l PGA Registry Remedy Right Management Robert Half Solomon-Page SOS Staffing Staff Builders Syntel TechniSource Volt Watsco Western Staff Winston Resources Work Int'l

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