I remember the first time I heard about what management consultants do. My friend at BCG was sharing tales about the transformative system he was implementing that would end up saving the company millions of dollars. The late and long hours, the pressure to learn things quickly, and of course the rewarding feeling of a timely and successful project.

Consultants in the recruiting world are perhaps a little intense than that but it borrows similar themes. We’re all hired to solve a particular problem that we can do better than most people that are available.

In this past year, especially during COVID-19 times, it’s been fascinating to see more and more recruiting consultants and mini firms (1–5ish people?) emerge that all focus on the startup space plus one other niche. These niches could be anything from something that’s domain/tech-specific (ML/AI, semiconductors, hardware/robotics, etc), people-specific (R4R, diversity, people executive search, etc) or even function-specific (coaching, recruiting ops, architecting hiring processes, etc). There’s a lot of ways to cut the pie apparently!

I thought it would be interesting to take a shot at understanding why there’s a rise in recruiting consulting both now and perhaps for the future to come. Follow along!

The New Economy

To start, we all know the devastating effect this pandemic has had on our economy, especially within more non-technical roles such as sales, ops, and recruiting. Even with the transfer of talent from the hardest-hit industries (travel, restaurants, entertainment, etc) to the ones who are doing a bit better (remote/collab tools, robotics, gaming, etc), there seems to still be quite a few great recruiters on the market.

Uncertain times leads to a lack of commitment.

Why hire a recruiter full-time when plans might change again? If product directions get re-prioritized and headcount gets cut in half? If the next round of funding is unrealistic to get moving forward?

The demand for identifying, engaging, and persuading great engineers hasn’t stopped. In fact, it’s perhaps only gotten more competitive as more candidates have chosen to hunker down and ride out the storm. “Things are good enough and it’s not worth the risk” has been a pretty common I’ve getting these days which ultimately leaves a gap.

If startups are going to contract something as important as talent acquisition out, why not find the ‘expert’ in that field who can solve that particular problem, whether that’s something technical/role/function related.

Hello, consultant.

The Pie Gets Bigger

I know I haven’t been in this business as long as some of the other vets out there but even in my short 6ish years in technical recruiting, it’s been incredible to see the meteoric rise of The Stack. The Stack meaning not just the web but all the other parts of the ecosystem from the cloud, mobile, robotics, chip design, wireless, so on and so forth!

Towards the tail end of my time at RockIT, we had just started to explore the idea of starting a robotics division. Computing was just getting to a healthy place that allowed researchers and engineers to do some serious stuff in ML/DL training. Software was bleeding more and more into hardware and the cloud was also starting to flex pretty hard. Little did I know that only a short while later we would start to see billions of dollars start to pour into the autonomous cars, drones, and warehouse/manufacturing automation space.

More software means more pie for everyone. Perhaps more accurately stated, we get to see a Marie Callender pie menu that’s big enough for existing and new consultants / mini firms to choose from.

Anyone getting hungry?

Lower Barriers, Tighter Networks

It’s still crazy to me that there once was a world where tools like Linkedin Recruiter and MixMax did not exist. One of the earliest memory I had of a phone book had nothing to do with actually using one. Instead, it was during a magic show in 5th grade where the magician got up and stage and proceeded to rip apart this thick yellow phone book which looked like it weighted 50lbs in half. (Oh, the irony!). These days, the bare minimum you would need to start recruiting is a laptop, phone and Wifi connection. This is pretty low cost to entry which for the most part has unfortunately led to some pretty poor recruiting practices. (I’m looking at you spammy recruiter…).

The one barrier that does still exists has everything to do with pre-existing networks. As I had mentioned in a previous post, I wouldn’t be where I am today if not for the generous referrals from people who took a chance on me. I’m assuming these new recruiting consultants and mini firms have all been able to get into the door the good ol’ fashioned way in doing good work and getting referred.

To summarize: Software gets hot > technical recruiting really starts taking off as a profession > 10+ years later, strong relationships are formed between clients, VC’s, hiring managers > easier entryway to starting a consulting firm.

Looking Ahead

The pie is big enough for more recruiters to join this consulting party but it’s not for everyone (that’s another post in itself). There will always be a gap to fill in recruiting for early stage startups that full-time employees and part-time contracts (who eventually want to get converted or just don’t have a niche) can’t fill. It’s just a manner of figuring out how you get your foot in the door and how you differentiate yourself just enough from others to stay in the door.

My hot take? I think there’s going to be more and more entrepreneurial-minded recruiters who are actually passionate about this profession that take a chance on themselves. I also think there’s a possible future where we’ll see consultants / mini firms in the same niches join forces enough times where some sort of powerhouse dynamic occurs. Those powerhouses would then double down on things like branding, building a community and investing in AI-driven tools to really set themselves apart. Then again, there will always be the boutique shops that just want to stay boutique and other solo consultants that just want to stay solo.

But enough of my thoughts! What are yours? Are you seeing a similar trend? What do you agree, disagree, or want to shed more perspectives on?