Most senior level executive recruiters have now experienced more than one market downturn. In order to make it through these lean times many recruiting businesses are forced to adjust their business model in order to survive. These adjustments include terminating staff, adjusting prices, and creating new services. However, when the markets rebound many recruiters rebuild their older, traditional model.

So how will you emerge when the market rebounds?

The Tradition

From the client’s perspective, the senior level executive recruiting model hasn’t changed much over the past four decades. Fees remain about the same, roughly one-third of the hire’s first-year total cash compensation. Average time-to-completion remains around 120 days. And perhaps most telling is that the average successful completion rate remains just under 70% at most big-brand firms.

Even as technology developments have opened access and streamlined the ability to identify and track targets, the internal execution model at most firms remains exactly the same as it was decades ago: Rainmaker recruiters generate business and serve in the lead role on many search projects while a support staff consisting of junior recruiters, researchers, and assistants serve in key execution roles.

During peak conditions in the market, rainmakers may manage as many as ten active search projects, and the firms create a bulging support team to serve them. In these good times individual search profit margins can easily reach 65%, and for small firms it sometimes gets as high as 85%.

Recruiter, Meet Adversity

So, what happens when the market drops? Firm operators know people costs far outweigh the other expenses, so the focus is initially on staff reduction. At most firms the support ranks are the first to get thinned.  After all, these individuals cost the firm money while the rainmakers make money for the firm. After the support staff is reduced to bare bones, firms move on to remove unprofitable recruiters. With empty offices and empty desks, firms usually limp along until the market rebounds. During this period you’ll hear all kinds of rumors and stories about desperation among recruiters, including super-low fees, lower-level search work, research-for-hire, and even freebies. (In desperation, imagine what one would say or do when the quicksand is up to their neck.)