Consultant Earnings Survey

The statistics of our 19th Annual Earnings Survey are in with some surprising results. The survey was Emailed to about 3,500 readers who were picked at random from our current reader database. As of this writing, we received usable information from 1,100 firms. The increased response was due to the Emailing’s ability to allow participants to respond quickly and we thank those who participated in this effort. This is slightly fewer than last year’s response but there are fewer of us these days so it was expected. Also, we streamlined the survey, eliminating some questions from previous surveys.

SOLOS VS. NON-SOLOS

Almost 29% of the respondents (3% fewer than last year) were solo practitioners with the remaining 784 non-solo firms (68%) representing the results from 3,397 consultants with more than a year’s tenure.

CONTINGENCY VS. RETAINED

Last year, 67.4% of the responding firmsified themselves as contingency practitioners; 12.2%ified themselves as retained; and the remaining 20.3% claimed to have a mix of business between contingency, retained and partially retained. Since it was harder last year to convince employers to part with front money, it is no surprise that these figures have changed significantly. Respondents commented, however, that since January employers have loosened a bit and more tell us that they are getting commitment or engagement fees with more frequency. Year 2003’s median cash in results (rounded) are: Contingency 80.2% ($165,000 median cash in) Retained 6.6% ($220,000 median cash in) Mix 13.2% ($195,000 median cash in)

FIRM TENURE

It would seem at first glance that those who had survived the last recession in the early nineties were more adept at surviving this one as well. Average number of years in business for solo practitioners was 12.34 years with the rest having been around for 14.46 years. Average for the whole group of respondents was 13.87 years in business. Of course, there are new firms cropping up every day like flowers in the spring but the old-timers seem to have the moxie and experience to weather these periodic economic storms even though many have had to reconfigure their practices to endure the downs. As shown below, one of their techniques has been to downsize their staffs.

CONSULTANT TENURE

We don’t count those consultants with less than 1 year’s experience since turnover amongst that group is excessively high. The percentage in parentheses is the percentage of the entire group and the dollar value represents the consultant share of cash in. 1-2 years (21.48%)…………………………………. $48,792 3-4 years (23.69%)…………………………………. $75,980 5-6 years (15.42%)…………………………………. $75,994 7-10 years (18.73%)……………………………….. $74,458 10+ years (20.41%)………………………………… $87,049

CONSULTANT STAFF SIZE

For non-solo firms, the average number of consultants per firm went down from 4.78 in 2002 to 3.1 consultants in 2003. Average consultant tenure was 7.69 years and with this many years in the trenches, in both good times and bad, it is obvious that those who stayed are also those who were able to produce at a level acceptable for their bosses (and families or loved ones). Forty-five percent of the consultants had been in business for less than the average tenure, but those in the group over the average often had 20-35 years under their belt and tended to skew the average. Even so, the overall median number of years in recruiting for all non-solo consultants was 5 years. And the median number of years for those with more than the average was 11 years.

SOLO vs. NON-SOLO

As mentioned above, the number of solo practitioners responding dropped from 32% to 28.8%. This does not comport with what we’ve heard in hundreds of conversations we’ve had throughout the Year 2003 with industry veterans who have discharged their consultant staffs and moved to either smaller quarters or to their homes to operate their businesses alone or with the help of a researcher or assistant. Nevertheless, we are merely reporting the results of the survey and won’t speculate on this drop in response rates from solo practitioners. Our intuition ells us that the results may be a bit different from the reality. Perhaps those missing solos were too busy tending to business.

AVERAGE CONSULTANT SHARE OF CASH-IN

An overwhelming number of firms still compensate their consultants based upon performance (commissions vs. salaries) but the average consultant share has increased from 40.8% in 2003 to 42.07% of cash in. It appears that the lower the draw or salary, the higher the commission percentage is paid to consultants. Pressure by employers to discount fees will naturally lower the fees upon which a consultant’s share is based and many said they had to raise commission rates to keep good people in the business during tough times.

MONTHLY DRAWS

Concomitantly, the monthly draws paid to consultants were down from $2,493 (approximately $575 per week) in our 2002 survey to $2,187 (approximately $504 per week) during 2003. It was no surprise after all these years that there is still a large group of owners who treat their consultants as Independent Contractors working on straight commission with no draw or salary whatsoever. These are generally the firms that pay a significantly higher commission percentage to offset the fact that they pay their people nothing in the way of a draw or salary. This straight commission method is, of course, illegal but we won’t get on our soapbox this year. We just suggest that you contact your closest IRS office and (anonymously) request a copy of Form SS-8.

AVERAGE OVERALL EARNINGS FOR 2003

Average commission earnings for consultants with over a year on the desk with a non-solo firm were $78,604. This was down slightly from $80,624 the year before and was computed by taking their cash in figures multiplied by the actual percentage paid by their individual employer. Although the average cash in per consultant for 2003 was $186,840, the median cash in was only $155,500 If solo practitioners had been paid on the same basis as if they worked for someone else, their earnings would have been $81,923 but with lower overhead, their take is considerably higher. Especially since the average cash in for solo practitioners in this survey was $194,732. Close behind solo practitioners are those members of a franchise group whose average cash in per consultant was $193,906.

HIGH BILLERS

This is a rather voyeuristic exercise since we have seen top billers from one year turn into used car sales people the next year. There are, of course, folks out there who are top billers year after year. Most don’t respond to surveys (including this one) but because reader inquisitiveness remains steady, here’s what our survey showed. In first place was a member of a 4-person retained firm specializing in the General Management field who billed $1,051,000. Second place went to an individual with a 2-person office who earned $956,000 working General Management. In third place was a practitioner with a 7-person retained firm who earned $835,000 working General Management. There were a couple of dozen who collected over $400,000.

FEE PERCENTAGES

When over 65% of respondents admit that 25% fees are what they are able to charge, it almost becomes the norm by default. There can be no denying the truth in the theory of supply and demand. While most still have a “sticker price” of 30% on their fee schedules, fact is, the real fee is almost always 25% – or lower. The epidemic of Personnel Service Contracts promulgated by hirers has become a ‘take-it-or-leave-it 25% – or lower. Many respondents said that they were able to charge 30% to select long-term clients, but many have given up the quest for the magic 30% and have resigned themselves to a 25% sticker price. This, of course, tempts hirers to negotiate for even less. Here’s the real deal, according to respondents: 30% fees 19.5% 25% fees 65.2% 20% fees 10.3% Other 5% Some in the ‘other’ category are flat fees offered by fewer than 2 dozen respondents and fees either under 20% or over 30%.

Highest single fee

The highest fee reported was $575,000 from a consultant whose total cash in was $850,000. There were 42 fees from $100,000 to $275,000. Thirty-two were from retained practitioners with the balance from contingency recruiters. Over 100 respondents said they had collected a single fee between $50,000 and $100,000. We are aware that these are not likely the highest fees in the industry only for those responding to our survey.

GUARANTEES
As the normal fees charged by recruiters diminished, the guarantee periods tended to increase in 2003. Although, in reality very few deals fall apart after the placement is made and the candidate is on the job, it does happen and hirers, especially those who use Personnel Service Agreements, demand longer time frames for evaluation of their hires through recruiters.
Despite this, the trend is away from moneyback guarantees and towards replacement provisions.
In the moneyback category, more are adopting the tire tread formula: If you offer a money-back guarantee, make it a “tire tread” or “self-destruct” guarantee. If your Michelins require replacement, they’ll deduct the tread you’ve used and reimburse for the tread that’s left. You should do the same. If you offer a 30-day guarantee, make sure the words say that the fee-back liability reduces by 1/30th with each day your candidate works. If it’s a 100-day guarantee, it will reduce the fee-back liability by 1% for every day worked. It’s that simple. Don’t offer what you’re unwilling (or unable) to pay back. Here’s what our survey participants reported offering:

No guarantee 5.25%

30 day replacement 28.46%

90 day replacement 22.09%

60 day replacement 14.98%

30 day moneyback 12.3%

60 day moneyback 5.99%

90 day moneyback 4.49%

180 day replacement 2.24%

45 day replacement 1.12%

100 day moneyback 0.07%

100 day replacement 0.07%

365 day replacement 0.07%

45 day moneyback 0.03%

70 day moneyback 0.03%

365 day moneyback 0.03%

180 day moneyback 0.03%

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Other 2.75%

One reader wrote: “I have not had any guarantees come into play in the past 2 years. I know we’re not in the insurance business, but if you do a good job matching the candidate concerns and aspirations with the expectations and goals of the hiring company, it’s not likely that the guarantee will ever matter.” Another wrote: “No guarantees are given. We recruit physicians for hospitals and clinics. Our client agreements state the client is ultimately responsible for approving the match. Our responsibility is to locate candidates they otherwise would not find on their own. Many of our clients do not have the manpower or funding to conduct searches or screen candidates. Our role is that of a matchmaker. Since we cannot control the work environment or the people in it, it is not reasonable for my company to be held accountable for circumstances beyond our control. Other companies offer “hollow” guarantees that state they will ‘make their best effort to find a replacement.’ This is not a guarantee; this is hollow language. When it comes down to it, most recruiters are going to go for the money and not work for free to replace a candidate. I refuse to put this hollow promise in my contracts. However, should the time come when a placement doesn’t work out, it is by our actions that our clients will see what type of company we are. I firmly believe it is not only the successes of a company which tell if it is a great company, but how the company works with clients to resolve problems when they arise. That is when a company is truly tested.”

In-house researchers

The number of in-house researchers has increased from last year when 30.8% reported having at least one in house researcher to this year’s survey where 38.7% reported that they have an in-house researcher. Participant commentary also indicated that many more are using freelance researchers than in prior years. One respondent said, “My researcher is my Mom and she’s awesome.” Another tapped into the fact that youngsters are incredibly Internet savvy. “My two part time researchers are 14 and 17. Their salaries go directly into their college funds.” To buy a directory of freelance or independent researchers, go to www.rsronline.com. Evidently practitioners have learned that they can be more productive with in-house researchers because those firms who had them reported a significantly higher cash in average of $231,642 (Median – $182,500) than those practitioners doing their own research.

NETWORKS/FRANCHISES

30.6% of the respondents belonged to a formal or informal cooperative split network and 18.9% of the respondents belonged to a franchise group. One of the major benefits of both of these types of groups is the ability to have broader access to candidates for whom you might have a job order – or job orders for which you might need candidates. It appears to work as advertised since both network members and franchise networkers produced approximately 9.6% more cash in than those who go it alone. One networker wrote, “My firm’s specialty is engineering, but when my clients need accountants, sales people, purchasing, IT people, etc. it seems foolish to let them go to my competitors, so I farm these openings out to my network colleagues and they usually come through for me. Half a loaf is better than none and my clients appreciate me more.”

JOB BOARDS

54% of respondents used job boards to some extent in their recruitment efforts; some claiming less than 1% of their revenue from this usage, and other claiming over 75% of their revenue coming from utilization of these resources. The average amount of revenue coming from these job boards was 26.67%. Those whose practices were involved in engineering, telecom, IT and other tech-intensive niches were more likely to depend upon job boards than those who were in specialties requiring a greater tendency toward soft skills. One correspondent who said that 95% of his revenue came from job board use wrote, “Highly abnormal advertising for some very unusual positions not searching the databases. It would be 0% if you want to know about candidates whose resumes were posted.” The median cash in for all firms using job boards was approximately 1% higher than the average of non-users, but the median cash in for those firms claiming that over 50% of their revenue came from job boards was 3% lower than the overall average cash in. SPECIALTIES There was a major jump in the number of practitioners claiming that their specialty area was General over previous years. Many remarked, “I took what I could get.” Another wrote, “I plowed new ground in 2003 because my traditional niche was increasingly fallow. I was in IT until the bubble burst. Last year I made placements in sales, accounting, manufacturing, R & D and a whole bunch of other areas that make my specialty unclassifiable.” What follows is the consultant share of cash in: Generalist……………………………………………. $123,957 Mortgage…………………………………………….. $112,011 Healthcare…………………………………………….. $87,802 Legal……………………………………………………. $83,385 Manufacturing………………………………………. $81,405 Automotive…………………………………………… $78,881 Plastics…………………………………………………. $78,409 Sales…………………………………………………….. $78,145 Banking………………………………………………… $75,936 Accounting/Finance……………………………….. $74,280 Pharmaceutical/Biotech………………………….. $73,517 Building Prdts/Construction……………………. $72,745 Medical Devices……………………………………. $66,533 Supply Chain/Logistics…………………………… $66,260 Apparel………………………………………………… $65,642 Direct Marketing……………………………………. $62,193 Insurance………………………………………………. $58,936 Engineering…………………………………………… $51,691 IT………………………………………………………… $50,951 Clerical…………………………………………………. $45,225 High Tech…………………………………………….. $41,070 Hospitality……………………………………………. $40,824 Retail……………………………………………………. $37,934

THE HISTORICAL SCORECARD

1985 $51,900 1986 $52,848 1987 $53,278 1988 $57,184 1989 $57,592 1990 $52,236 1991 $52,914 1992 $50,025 1993 $63,304 1994 $67,721 1995 $76,473 1996 $72,672 1997 $87,294

1998

$89,178

1999

$87,835

2000

$93,634

2001

$82,038

2002

$80,624

2003

$78,604

EDITOR’S COMMENTS/OBSERVATIONS

Perhaps only happy and productive people respond to surveys like this. But we’ve been conducting this survey for 19 years and the results always seem to mirror the industry in general. It is, of course, only a snapshot of the industry at one specific point in time by people who are willing to share their results. It is instructive, however, as a benchmark against which to compare your particular practice. It also gives us the pulse of the industry and we are happy to report that over 90% of respondents are very optimistic about the future. Some of the comments appear below. We continue to see the tendency for birds of a feather flocking together. If a firm’s consultants have mediocre results, all of them generally follow that pattern. If a firm’s consultant billings are above average, all the consultants beat the average. Maybe it’s peer pressure; maybe it’s higher comfort levels. Maybe it’s better management; maybe it’s better training. Wish we knew so we could bottle it. Further correlations of the data are still being massaged and the results will be reported in future issues. We appreciate those who took the time to respond. We asked: “What is your forecast for our business for the rest of 2004? “Much better! I already have more business than last year. Clients and candidates are not nearly as gloomy as last year. Still it isn’t the wild ride we had a few years ago. And I am working with a great client that is slowly changing me to their retained list of recruiters. That means I get assignments on contingency right now but if the position ends or they find someone on their own I still get paid for my time quite handsomely. I’m being tested. I think it is fair and I was looking to get into the retained only business. You got to start somewhere to get the necessary references.” “Shooting for $350,000 plus for 2004. (The 1st Quarter should yield close to $150,000 as I am currently pacing and have enough closeable orders to achieve that number with ease. Not to mention that I have consistently taken off 3-months a year just to kick around and enjoy life). Life has never been better. Even with the down turn in the economy, I was still breaking records. Year 2002 I made $202,000, that was only my 3rd year in the business and I took off 4-months that year, to boot. Remember, year 2002 followed the events of Sept 2001, so for 6 months I (like everyone else) was dead in the water. There are too many crybabies in the recruiting business. The business is there, always has been there and probably always will be there, for anyone that is aggressive and knows how to forge trusting relationships with people, work hard and serve the client’s needs.” “In general I see it getting somewhat better but not extremely strong. I am in IT recruiting and I see that still lagging behind other specialties.” “National clients are moving toward more written contracts that are very unfavorable. Having to move away from them.” “Based on our clients’ forecasting, it looks like the 2nd & 3rd quarters will be a great time for recruiting firms in the legal and/or financial market place.” “Legal market in Chicago is improving across the board, including areas such as Corporate which has been non-existent over the past few years. Anticipating another 50% increase in billings this year as a combination of continuing to learn the business, solidifying client relationships and an improving hiring climate. Firms are starting to notice a shortage in their 1999-2001es as a result of downsizings and reduced hiring in 2001-2002. I am expecting the start of a moderate hiring frenzy this year in Associates with 3-5 years experience to fill these voids.” “Too many different factors to come up with a blanket answer. However, overall, I believe those recruiters, regardless of what industry they are working in, will be successful if they personalize their services being offered to their clients. Too many recruiters are falling into the trap of using email to communicate with people rather than picking up the phone. Unilateral communication does not afford the individual the opportunity to exchange and gather vital information which they can only gather by having an actual exchange with the person they are trying to do business with.” “Still working hard for orders — we are in Detroit area — heavy automotive and suppliers — have made several changes which enabled us to stay in business but things are improving and candidates are getting offers I’ve been in the business long enough to know that if you can just hang in there things will change — I’m planning for a better year and my staff goals are set at 20% increase — I see light at the end of the tunnel.” “Very good. There is plenty of need and companies are agreeable to working with recruiters. I have gone out of management and back into recruiting. I think I will make more money and have fewer problems. Plus, I was able to train 6 recruiters to succeed on their own.” “If 2003 is any indication, a great year for recruiting, I’m optimistic for 2004. The economy has turned, the war is settled, elections are coming up and companies want to initiate growth that has been on hold since 2001.” “I believe ’04 will be a good year for us. My personal expectations are to bill $300+ this year. Last year was a very mediocre year but I take the blame. My effort was inconsistent and I did not drive the business process as I should have. Rather I was too content to work with existing contacts rather than compete in the market for new companies to gain them as clients. The challenges are going to be our own abilities and drive to do the job every day instead of slacking off for days or weeks in a row after having a good month or two. Beside these personal motivation issues, I believe the opportunity to do business is there but I have noticed a number of potential clients I have spoken with have chosen to look on their own before asking me to work for them. The feeling seems to be that there are a large number of candidates available and so they should tap into the market before spending $20k+ for a fee. The good news is that in most cases they have not been able to get what they want because there is a decent demand for this talent at the moment. They soon realize they need a third party agent like me to sell their opportunity to the best in the market.” “I think it’s important for any owner to empower his people. Treat them like human beings that can think for themselves. I don’t micromanage them but lead them instead and they appreciate it. They know that if I have to micromanage them they won’t work here for long. I also believe in rewarding people for their efforts. I’d rather make a piece on a lot of volume rather than taking the king’s ransom on very few deals. When you don’t pay people their worth then you get into turnover, clients not getting the proper service and draw balances. I have very little of these headaches. My clients are happy and my people are all buying homes, boats and beach condos.” “2003 was the first year since going out on my own almost 6 years ago that I didn’t bill $200-300K, part of the year was due to personal issues, but when my husband and I were able to kick it back in gear, we blanked the whole last quarter while working hard to make things happen. It seemed that movement was happening very slowly and candidates were being very cautious. I didn’t feel it was a lack of job orders, but making enough phone calls to find the motivated candidates. I have seen business pick up quite a bit already this year and based on talking with clients, feel we should end the year at approximately $250K+. We have also been struggling with recruiting software issues (4 different systems) and have never felt that we had anything that seemed to solve the majority of our needs since being on our own until late last year and found Big Biller.com and feel that it has already saved us a lot of time and energy and feel that alone will help increase our business just in having information at our fingertips and a way of following up on the planner vs. doing everything stubby pencil, let alone the great search capabilities and being very user friendly. This alone has kept us from considering adding future recruiters when we have had to turn away business and don’t feel that will be an issue in the future. I have spent a lot of time and energy on technology/software only to not really buy into the systems due to being cumbersome, and finally feel hopeful that we can really work smarter, not harder! (Didn’t mean to go on and on but you don’t realize how much time you spend pushing papers until you don’t have to)!” “Much better We bottomed out in Sept 2003 We were running 100 marketing calls to get 1 job order. Now it’s about 25 to 1. We added 50% more contractors to our team in the last four months. We are getting less pushback on fees and we are getting job orders called in,” “We feel the buzz and find hiring managers and companies opening up to hiring. We are seeing counter offers extended, candidates looking to make a move but the market tight for quality people that are actively looking. We as always are targeting passive candidates… We are optimistic and will continue to do what we have always done … add value through our consultative approach!” ” We are very optimistic. It seems that even though the insurance industry is shrinking, companies are more willing than ever to use recruiters. We are making a big push to add new clients and strike while the iron is hot.” “We will have many more orders, but the competition for the best candidates will continue to be greater. Now that people are beginning to consider other opportunities, they are getting more than one at any given time.” “Positive. I’m getting more requests from hiring authorities (most from previous clients, contacts or referrals) than I’ve had in a long time.” “Unsure. The last couple years have been dismal. A lot of companies still believe that great candidates begin and end with Monster.com.” “This will be a HUGE year for the company. We will increase our billings, with fewer consultants (keeping only the strongest) by a factor of 2. (And we had a good year last year as well).” “Very strong. I’m hoping to increase revenue by 25% from last year which I’m on track to do for right now. I do not have any plans for hiring a recruiter at this time. I like the system I have now which is using consultants who only work with me occasionally and get paid only if their candidate gets placed. It’s kept my costs down and has given me much more freedom in my personal life. I’d like to remain a solo recruiter, for now, and remain under the radar screen. Thanks for providing us with excellent information!! I made the decision several years ago to start this business without any experience. I would never suggest that to anyone. Fortunately, I specialize in a small niche that I am considered somewhat of an expert in and that has helped. Contracts and all of the other many issues have been learned through you guys and the school of hard knocks.” “As an eternal optimist, I see it getting better, but the client base continues to shrink due to all of the pressures to use job boards, centralized staffing, bottom feeding (choosing recruiters solely on fee rate) and the like.” “I think we are back to the days of the only problem being ourselves. That is always true to a degree but I don’t think we’ll be able to blame failure on anything else anymore. The job order per call count is rising steadily. There is still some fee pressure but even that seems to be lessening.” “Bad – everything will wait for the election. Hiring is still negative. We’ve moved into government contracting and healthcare because IT and manufacturing are barely breathing.” “Within the last month there has been a tremendous turn-around in clients calling to give us job orders. These are clients we haven’t heard from in quite awhile, possibly two years. We are pleased to say the pace has certainly picked up for our areas of expertise (EHS, HR & ChE/ME’s) and it feels great!!” “Very slow rate of MFG growth. Also high competition in Pharmaceutical and Healthcare with customers (buyers) still feeling empowered despite tightening candidate supply. Relocations continue to be resisted by candidates.” “Significant upswing – we are on track thru Feb to already experience 500% increase over 03 which was about a 175% increase over 02 lots of good news coupled with a very solid foundation of search expertise.” “Excellent for 2004 … year has started out way above 2003 currently $30 K ahead thru January ( billing) with twice # of searches pending or ongoing compared to 2003.” “I think it will continue to pick up gradually and will be better than last year overall. We have drastically reduced expenses to assist us with adjusting to the fluctuations that have been commonplace the past 2 years. Looking to keep expenses low, continue to market and, if it picks up mid year, we are planning on adding another staff member in 3rd quarter.” Good. We have over 100+ open orders we’re working on. Our challenge is quality candidates and we are looking for creative ways to find them relying less on net and more on good old fashioned recruiting/sourcing/cold calls.” “Business will still be tough, but there will be more job orders. Clients will still be very ‘picky’ with candidates, looking for the ‘just perfect’ match. Certain segments, like Telecom will still begin to pick up, particularly wireless and the applications end of the business. I anticipate Q3-Q4 to be where the majority of the money will be made.” “Clients are still moving at a slow pace, typically waiting to find the candidate with perfect skills and background, and yet, at least they are willing to pay fees for those candidates! 2004 is looking good.” Activity is up from last year – so far the first few months have been better that the last year, more job orders this year so we feel that things should pick up in the second and third quarters of this year.” “I am excited … year started with two partially retained (engaged…1/3 now, 2/3rds contingent). I’ve been forced to turn searches away for the first time in 4+ years, activity is good, though cycle still too long. Should be a busy year, looking forward to getting back to a market where we are needed and valued and where he who has great candidate networks wins. We are well positioned for 2004 and beyond.” “Since my experience in the industry as a whole is very limited, this is a difficult question to answer. We started our business focusing on the Mortgage Banking industry which tends to be on the upswing when the economy and other industries are suffering. From what I am seeing now, the economy is starting to pick up, interest rates are still very low but leveled out. We are starting to see growth and expansion in our client companies nationwide. When we attending the ASA convention in October attendance was up and people were getting excited about the new year. I think this will be a strong growth year for the staffing industry. We will be starting out slow the first quarter in our Mortgage Banking Division but we are already seeing more job orders coming in and we are planning on hiring at least 1 additional recruiter/consultant immediately with 2 additional to follow in the next 10 months. Our Sales Division (all industries) is experiencing an increase in orders and urgency with their clients. We just hired an additional recruiter for that division in January and are planning on hiring 1-2 more by the end of the year. As a company we are forecasting a 10-15% increase in sales/cash-in for 2004.” “Starting to pick up and things are looking good in sectors we search in. JO’s have been significantly stronger than first quarter of last year. Let’s hope and pray.” “My experience has been that the market has been picking up steam over the last 9 months. I believe 2004 will steadily and slowly get increasingly better. Positions above the $85k level still seem hard to come by.” “See some up tick in business and hiring; however, the major players in my segment are doing everything to keep from adding people. I place primarily engineers, technical sales and marketing people.” “It appears as if we have turned the corner. Our level of activity hasn’t been this high since 2000. “Election year will prove to be somewhat of a safety net. Political candidates will emphasize the creation of jobs. Up close, on the front lines of our industry there has been an overabundance of candidates and a limited supply of quality search assignments. The majority of recruiting firms that I have conversed with in the 1st quarter have felt a swing of the pendulum, myself included. First quarter face to face interviews have increased significantly, while send out to placement ratios are comparable to pre 9/11. Hopes of the search and placement industry are that this will graph as a steady upward trend and not a knee jerk reaction. Moving forward we should prosper from a stockpile of quality candidates. The objective here should be to operationally make them retrievable, as we need to sharpen our abilities to sell the dream and better qualify candidates. I believe that the bottom is behind us, although we are bound to hit temporary lulls and labor market corrections every now and then. In retrospect, building strong relationships and realizing that your star candidates are where your next placement will come from.”

Paul Hawkinson is the editor of The Fordyce Letter, a publication for third-party recruiters that's part of ERE Media. He entered the personnel consulting industry in the late 1950's and began publishing for the industry in the 1970's. During his tenure as a practitioner, he personally billed over $5 million in both contingency and retainer assignments. He formed the Kimberly Organization and purchased The Fordyce Letter in 1980.

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