It’s gotten quieter around the Aliso Viejo offices of The Job Dr.
The agency, which recruits employees for local and national technology companies, has seen its own staff drop from 18 people to five,and its client list is following suit.
It isn’t the company’s service,clients just aren’t spending money the way they used to.
“We’ll ride this thing out,” said The Job Dr. President Roger Howland. “It’s just that you see a lot fewer goatees and scooters around the office these days.”
He’s only half joking. With local tech companies laying off thousands, an economic reality now faces the cottage industry that has helped staff them through the late ’90s boom: A rising tide lifts all boats, but a falling one will bring ’em down.
Though there aren’t formal statistics on OC’s tech recruitment businesses, the informal numbers paint the picture.
Some local firms have seen client lists,comprised of companies seeking workers,drop 50% to 70% in the past year. Where one employment firm had 180 jobs posted last year, it has only 18 now. Large recruiting firms have pared back their OC operations. And, overall, the number of actual placements has been cut in half.
And the squeeze is being felt across all portions of the tech staffing industry, from traditional recruiting and executive search firms to administrative and contract staffing firms, recruiters say.
“Times are hard right now,” said Stephen Iednagel, founder of Laguna Hills recruiter Silicon South. “The market 18 months ago made it look easy, but not anymore.”
Recruiters say they simply are getting buttered on the wrong side in a down economy.
Traditionally, tech recruiters are paid by companies to find employees for them,often taking a cut of the new employee’s salary or charging the employer high hourly rates for their service.
Even with a shift in the labor market in favor of employers, recruiters are reluctant to switch to charging job seekers instead of companies for their search services.
“Call it pride or whatever, but there is a sense in technology that employees shouldn’t have to pay for jobs,” Howland said.
Additionally, there are state regulations that keep many firms from searching for jobs for individuals, Howland says.
But with the labor pool flooded with job seekers, OC’s tech companies have gotten more judicious in who they hire. Where any employee could get a job in technology just a year ago, the less skilled and educated have gotten the chin. Several companies say they don’t even need recruiting firms to fill the spots,they get enough resumes on their own.
But the challenging market will show who the real good recruiters are, say local headhunters. Recruiters have to do a lot more sifting through their job seeker lists to find the right person. If they place a bad person, the relationship between a recruitment firm and the client suffers,a costly penalty in hard times.
“You can’t just take anyone off the street any more,” Silicon South’s Iednagel said. “It makes you really have to listen to the needs of your clients to be able to find the exact person they want.”
Like many of the dot-com clients they served, tech-recruiting firms simply had too many companies vying for too little business. Between 1995 and 2001, when the Internet took on commercial significance, the number of recruitment firms jumped 33%, according to nationwide statistics from industry research association American Staffing Association.
“There was a time when everyone would get into it,” said Christopher Broek of the Newport Beach office of Pacific NetSoft Inc. “You could own a dry cleaners and get into it. But many of those firms,mostly very small,have shuttered their businesses.”
And those recruitment firms that are still around have to spend a lot of time wooing clients so they’re ready for when the market returns.
“We had the privilege of being in the right place at the right time,” Howland said. “But now the tables have turned.” n
