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The Employment Industry

The last eight to ten years in recruiting have been some of the most prosperous years recruiters have ever experienced. During this time, employment was at an all time high. The corporate world and the stock market were experiencing tremendous growth. And hiring managers couldn't find enough quality people for their open requisitions. The result of all of this was that recruiters experienced some very good years!

The current economic picture is not quite what it was a year ago. Keep in mind that the fundamentals of the recruiting industry have not changed. First rate companies still need to hire top talent, and top talent is not easy to find and hire. These companies will need recruiters to assist them; regardless of the economy.

How viable is recruiting in the long term? Very viable, and here are two main reasons why. Demographics suggest that the number of people available to work (supply) versus the number of people needed to work (demand) is widening as baby boomers begin to enter their retirement years. As this imbalance between supply and demand increases, it will become increasingly difficult for employers to find qualified people. This is the perfect scenario for recruiters!

Generally speaking, the best companies usually want to hire the best candidates. And even though the best candidates may occasionally use the Internet for their job search, most of the time they are happily working and are not scouring the Internet for jobs. This means that a human being will be required to find these happily employed superstars, identify their reasons that would cause them to consider leaving their current employers, and facilitate those transitions. The Internet will never be able to convince a happily employed, superstar candidate to quit his comfortable job in favor of going into an unknown situation with a different employer. It will always take a human being - a recruiter - to work hand in hand with the candidate to make the job switch happen.

During all types of economic conditions, companies will lose key employees due to attrition (e.g., death, divorce, job changes, relocations, etc.), and they will have to replace those key employees. On top of that, demographics are in your favor, which will cause clients to turn to recruiters for help. Recruiting has been a good business for decades, and it will continue to be very viable for decades to come. And although the Internet may have impacted recruiters easier placements somewhat, the sometimes-tougher placements that can only be filled by a recruiter will always exist. Any way you look at it, recruiting is a long-term profession with a very bright future.


Overall, executive recruiting is an extremely healthy profession. Salaries are high and climbing, with the average partner taking home over $250,000, while top earners comfortably exceed $1 million. Similarly, search firm profit margins remain, on average, stunningly high. The top 20% of firm's quote record profit margins above 60%, and almost every firm is comfortably in double digits. Growth, too, continues at a fast clip as the tight U.S. labor market puts a premium on the best managerial talent. Unlike many industries that are under attack from foreign competition or emerging technologies, there is no apparent downside in the search and placement market today. Indeed, with the typical search partner working 45 - 50 hours per week and managing three weeks of vacation per year, executive recruiting has the characteristics of one of the most attractive professional service sectors. The underpinning of the enviable statistics is the traditional fee structure for searches: 30% of a candidates first year compensation. While departure from this norm is frequent, there doesn't seem to be any widespread erosion of recruiter fees. Despite some industry fears regarding automated Internet services, there is no reason for recruiting fees, profits and compensation to decrease, as long as the U.S. economy remains strong.


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