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January 4, 2010

Could you disrupt the recruitment industry?

The recruitment industry is great in boom times, pretty good in steady state, and terrifying in times of recession.

The basic model is, you scout for roles to fill, then you source candidates from your pile / DB of resumes, and then you navigate them through the hiring process and take a percentage once they are finally hired.

The problem is that it is exceptionally competitive. It is a mass audience game where you need to strike at many, hoping to hit a few.

At any one time your clients are playing you off against at least two or three others. Why? Because they cannot be sure that you can get the right people. They feel safer with more sticks in the fire.

So how can a recruitment agency stick their head above the rabble as the obvious choice for placements of quality?

Like any business model this is one that needs a shake up. Sooner or later the rules will change and everyone is going to be in trouble. LinkedIn could do his, but HR departments are never likely to get their act together sufficiently to pose any real challenges in the short term.

So what if you were on the candidate side instead of the client side?

What if instead of web forms, papers and cookie cutter CV's - you actually went looking for the top class candidates who are not currently looking for work?

More to the point, what if you did that without having any current roles to place them in?

Meet them, online or in person. Speak with them. Find out what they want. pre-qualify them as one of the very best in their particular field, and then lobby clients on their behalf.

Instead of the customary clutch of resumes you would instead have two or three exceptional candidates who would move if the role was right.

Further more, what if you could assemble a fleet of nearly retired, not quite ready to go quietly into the night to use as interim managers?

The deal would change dramatically, and it would be hard not to fall back into old patterns of business.

You would need to focus laser like on a specific role, sector or specialty. You would need to spend a lot of time, at the beginning, meeting candidates and potential clients. And you would be creating a new space instead of trying to squeeze into an already crowded one.

It would be disruptive, but not dramatically so. Not until you became he go-to company for the best candidates.

The other way, the way to really disrupt things like Google does, is to do so on price. If you could get (say) 20 companies to pay you a subscription fee of, say, $15,000 per year for as many hires as they required. (And associated expenses as they were incurred)

Then you are disrupting the industry. You are going to cut down the margins and volumes of cash flowing into recruitment generally. But they would be flowing to you.

Old style billing, the per candidate kind, would look decidedly expensive, and you would stand out as the cheap option.

Toyota used to be the cheap low quality option. As their systems and processes matured they suddenly became the cheap high quality option. What could you do?

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