Local Companies Reluctant to Add New Jobs

Just two years ago, “feet on the street,” popularized by Groupon, was the conventional wisdom among anyone seeking the business of local merchants. But according to a market analysis by executive search firm Hawthorne Search, startups and larger companies alike are shifting strategy to focus on hiring staff that can bring in agency and big brand business. Robert Hawthorne shares what his firm is seeing in the marketplace.

Just a couple of years ago, local companies like Groupon and LivingSocial (and many others) were expanding rapidly and staffing up — eager to put hundreds of salespeople on the street as quickly as possible and grab share of their new market. But in 2013 those boom times have faded a bit, as local companies have adjusted to a period of economic uncertainty and are reluctant to add new positions to their cost structure. Many companies today have decided they are only willing to add cost if a perfect candidate comes along.

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So even as locally focused companies have definitive needs, there is reluctance to hire due to general economic uncertainty. As more and more brands have shifted their focus in local, 2013 has seen uptick in certain sectors of the local commerce, tech and marketing industry — with the hiring activity focused heavily in early-stage and mid-sized companies.

Here are some of the latest trends that we’ve noticed in hiring, in the local space:

Less Field Leadership
We’ve seen a consolidation of sales leadership positions in both traditional and digital media in recent months. Gone are the days when companies new to the market were building out large field sales team and installing the managers to lead them. Most companies are either selling through channels and trying to piggyback on the existing sales teams of their partners, or building specialized inside-call centers. There are a few exceptions, like Cardlytics in Atlanta, but overall we are seeing fewer searches for regional sales managers and area sales managers than at any time in the past five years.

More Agency Sales
Where companies are hiring is in the national/regional market with a focus on individuals who can sell through agencies and also to franchise groups.  If you are a salesperson with legitimate agency relationships in New York, San Francisco or Chicago, your phone is no doubt ringing. We recently worked with a candidate in New York who had strong agency ties and had FIVE offers to sort through.

Mobile Hiring Hasn’t Exploded (Yet)
There is still a decent push in mobile, and mobile-local, but not at the clip that many had predicted a few years ago. Where we do see strong additions to headcount is in verticalized companies, i.e. health and wellness, travel, auto, etc.  There seems to be an increasing number of local search companies that continue to try and own a vertical market as opposed to a geographic area. For candidates, it’s better to be a specialist with deep contacts in a specific category as opposed to being a generalist.

Consolidation in Traditional Media Continues
With the Supermedia/DexOne merger, and the senior management shake up at Hibu, we continue to see a large influx of resumes — but very few job openings to send these talented professionals out on. Similarly, our newspaper clients continue to shed headcount; and where they do add, it is strictly on the digital/mobile side.

Daily Deals Mania Fades
Just 18 months ago our phones rang off the hook from daily deals companies looking to add headcount as quickly as possible. With the implosion at Groupon, and LivingSocial’s continued inability to become profitable, that flow of jobs has turned into a trickle. Smaller companies have folded and those that haven’t certainly are not looking to add to headcount.

Loyalty Takes the Lead
Loyalty, or what some might call “Deals 2.0” has really taken off as a sub-category in terms of hiring. Companies like Cardlytics, Cartera, Edo and many others are partnering with banks and developing loyalty offerings that have shaken up the local space. These companies are being selective in terms of adding headcount, but most are extremely robust about their future and boast major private equity firms backing them up.

2013 has  seen a noteworthy uptick in hiring activity versus the same period in 2012. We certainly are not in what anyone would describe as “boom times” but there is a significant increase in companies hiring versus Q4 2012 or Q1 2012.

All in all we give the local search jobs market a solid “B” in terms of amount of activity and the quality of jobs available.

Robert Hawthorne has been a leading recruiter in the digital space for well over a decade. During that time he has focused heavily on the local market place, working with companies across the globe. His firm, Hawthorne Search, has placed over a thousand professionals in the local search space, ranging from senior executives to field sales and marketing talent.