Wednesday, March 3, 2010
It's what you do with the data
The Economist has a rather interesting article describing what the internet has done to the recruitment market. In the past, recruiters had proprietary databases of candidates that allowed them to charge high fees to find the right executive for their clients. Control of the data was the key to high margins. Now, with the advent of Linked In, The Ladders and other career focused sites, data on candidates is widely available.
So what are the recruiters doing? Adding more and better services around the commoditized data. For example, they are focusing on how to improve the quality of hires - reducing the number of hires that 'fail' at their new companies. They are also coming up with ways to speed up the recruitment process - making it 'just in time' so that it can support short term projects as well as long term hires. Finally, recruiters are expanding the scope of their services, helping companies come up with strategies to better manage the careers of their best talent.
All of these new approaches have one thing in common: they recognize that information is increasingly a commodity and that clients and customers will only pay for value added above and beyond the base industry data. All knowledge based service businesses face or will soon face this dilemma to one degree or another. We believe it's best to recognize it explicitly.
So, what solutions are you building to take advantage of the commoditization of your industry's information?