I’ve been in recruitment long enough to remember the dotcom bubble. I remember it very well and I also remember its burst.
I remember that I first got into recruitment in 1997 and that only a couple of years later crazy stuff was happening in our market.
Firstly, there was the prediction that the planes were going to fall out of the sky. That on new years eve 1999 as we celebrated the turn of the millennium the hospitals would cease to operate, the trains would crash and we would all burn in hell as a result of the millennium bug.
We were screwed.
DOOMED unless of course, we gave every salesman who could spell the word computer every bit of budget we could find to upgrade our kit until it was “millennium compliant”.
Salesmen who couldn’t sell their way out of a paper bag were earning crazy money and the market for the work I was doing for my then employers was in enormous disequilibrium. It was a candidate-led market where commission guarantees were the norm.
We then combined that with the world wide web as we called it and we had the perfect storm. More jobs than candidates by a long shot.
The world was going through its next phase of industrial revolution, it was changing commercially at a speed nobody understood and could predict.
Every organisation we dealt with rebranded as someone.com, hardware.com, this.com, that.com or as Esomeone.com. It was particularly cool to have an E in your name.
Marketing agencies had a field day!!!
Companies that didn’t make money were worth BILLIONS. I remember one company that was VC backed that employed 14 people from us in a month and a half, all on huge commission guarantees only for the candidates to discover that they didn’t have a product to ship … at all.They were crazy, heady times and quite wonderful for us recruiters.
So it came as no surprise when I saw the markets start to fall and the serious run we have had on some tech stocks out there.
And the same things are going to happen.
During the dotcom bubble burst, we started with a trickle of candidates and then a flow and then a DELUGE. The clients who were still hiring thought it was hilarious. “We don’t need you now” they scoffed, “there’s loads of salespeople on the market” they chuckled. They negotiated aggressively on fees. And then after about three months, they realised something rather terrifying.
When times are good like they have been and I hope still (please let me be wrong) are big companies get fat. They can hire anyone and still make money.
Oracle are great at this. The brand is so powerful, the technology works and the market for it is good and so they prevail in spite of, not because of, a large swathe of the salespeople that they recruit.
When the market collapses they offload that “FAT” and we get a saturated market full of people with brand name CV’s who can’t sell for toffee. It’s only then that the clients realise that the good guys have all hunkered down until the storm subsides.
What actually happens is that the market is MORE candidate driven than when times are good and the disequilibrium in the market is even worse.
I don’t want to be a Chicken Licken and those who know me know I can be a touch hysterical at times but I wonder if we are going there again.
Who knows. I’ll be keeping a close eye on a few key indicators in the next few months but I can guarantee one thing and that’s that if we do our clients won’t have it as easy as they think.