Many years ago, outplacement firms had lovely offices where laid-off executives could go to conduct their search. They could use an office to make phone calls, and they had administrative support.
Now, the vast majority of outplacement is done virtually. The job seeker rarely needs to visit the outplacment office. Costs plunged as outplacement firms shed their exepensive real estate and overhead costs. Outplacement services are still in high demand, but costs dropped as the delivery mechanism changed.
Many years ago, if you wanted to buy something, you went to a store.
Now, Amazon delivers merchandise to your home the same day you order it, and many people are predicting "the end of retail as you know it." Retailers with expensive overhead costs struggle to compete with Amazon's pricing. Consumers are still buying plenty of merchandise, but costs dropped as the delivery mechanism changed.
Many years ago, sales reps were the best source of information about products and services. You could actually learn something from them.
Now, by the time most customers are ready to buy, they have already done their research, and often know more than the sales rep. People no longer trust what they are told, they trust what they have learned on their own. Customers still buy, but are no longer willing to "be sold." Maintaining a sales force is expensive, and many firms are learning how to attract customers without heavy sales and advertising expenses.
Which brings me to executive search.
Candidates don't want to go to the offices of an executive search firm, and they don't expect to learn much from talking to the sales rep (recruiter). They would prefer to be more in control of how they gather information.
Employers still want great candidates, but are reluctant to pay 33% of annual salary if less expensive options were just as effective.
For both candidates and employers, the personal service from a search firm is still helpful, but the delivery mechanism must change.
What we have done:
Staffing Advisors has conducted over 300 searches without a salesforce, with nobody on commission and without using expensive offce space, and here's what we've found:
Candidates and employers, when given a choice, want our recruiters to schedule virtual interivews rather than take the time and expense of meeting every candidate face to face. Our retention statistics have proven that properly executed virtual interivews bring just as much rigor (and far less bias) to the hiring process. They also allow us to cast a much wider net for nontraditional candidates.
Inevitably, the traditional search firm business model will give way to forces that are reshaping outsourcing, retail and every other industry. We welcome the changes.