Traditional retailing is in its “pre-death,” according to Silicon Valley investor and Mosaic creator Marc Andreessen, whose prediction has plenty of parallels in outplacement. Like chain stores stuck in shopping malls, traditional outplacement firms will struggle to compete with online companies and results-driven approaches.
Andreessen has been quoted as saying, “Retail chains are a fundamentally implausible economic structure if there’s a viable alternative. You combine the fixed cost of real estate with inventory, and it puts every retailer in a highly leveraged position. Few can survive a decline of 20 to 30 percent in revenues. It just doesn’t make any sense for all this stuff to sit on shelves. There is fundamentally a better model.”
Sound familiar? Just look at how traditional outplacement is provided. It is heavy with on-site group seminars between outplacement specialists and multiple job seekers to discuss the generalities of job transition. This model is outdated. Many professional services are now delivered without time and money being spent on meeting someone in an office. Plenty of professional services are being provided virtually using the telephone and the Internet. The need for expertise is the key, not being in a room together.
New workers need new approaches to outplacement
As Gen X and Millennial workers grow to dominate the workplace, the demand for bulky traditional outplacement services will diminish. These two groups are very comfortable with virtual and “on-demand” services. They want quick access to information and they don’t have the patience to wait for someone to visit them. If they are conducting their job search late in the evening or on a weekend, they want access to the information they need. This is the new outplacement model – quick access to the right kinds of information.
Traditional retail has a difficult time with quick changes. Think how long it takes Barnes & Noble to change to the needs of its customers and the market. Traditional outplacement has this same problem. However, next-generation outplacementproviders are able to change and respond as job search techniques and technologies change.
Fixed costs will hamstring traditional players
Traditional retail has a lot of money tied up in its brick-and-mortar stores, which increases their costs relative to their online rivals. Traditional outplacement is in the same boat. These companies have a lot of money tied up in their current model (travel costs, costs of hiring consultants to be close to customers, costs of changing job transition manuals, etc.). Modern outplacement providers like RiseSmart don’t have these costs.
Marc Andreessen suggests that newspapers should shut down their printing presses before they have to close altogether. Traditional outplacement firms should take note as they too are running some tired, old machinery.