In our coverage universe are the executive search companies, the Internet recruiting sites, and the general and specialty staffing firms. 2000 was a fairly dismal year for most of the companies in this space. That is especially true on the staffing side. A lot of these companies were very flattish last year in their revenue and profits, and, on the Internet side, a lot of companies were brought back to earth with the rest of the Internet group. Contingent recruiters are saying that they are having to sell candidates harder on available job opportunities.
People are reluctant to change positions in an uncertain environment.
However, we re also hearing anecdotally at a few of the companies that their temporary staffing business, or their contract staffing business, is strengthening modestly. We think that uncertainty in the environment leads corporations that still have decent demand in their business to meet that demand through the use of contingent workers rather than permanent hiring. In the first half of 2000, a number of the companies in the search area benefited greatly from the dot-com hiring rampage that was under way at the time. So not only are they wrestling with the challenges in the economy, but they have some extremely difficult comparisons in the first half of this year. Let me offer three ideas.