The current funding crisis in the New Media industry, manifested by a spate of high profile dotcom failures, has steered companies into a period of recruitment consolidation.
Over the last few months, prominent eBusinesses such as Thestreet.co.uk, Clickmango, Shopsmart and Boxman have collapsed through lack of funding and this has impacted on the whole new media industry. Every backed venture is now under tight scrutiny from its investors, and companies are being forced to reassess their managerial structure and operational costs. It is goodbye first class and back to economy for the dotcom executive.
There have been a number of common mistakes in the way many eBusinesses have been run, and these include:
- Inflated salaries for under-qualified staff
- Lack of solid business expertise at board level
- Over-commitment of resources to advertising
- Not enough focus on profitability
Recognising these shortfalls, New Media companies are now embarking on a period of consolidation. Over the next few months we can expect to see a lot of 'dead wood' employees being cleared from the dotcom ranks - a trend that is already apparent across the Atlantic. In December 2000 over 10,000 Internet Sector workers were made redundant in the US, with the most heavily affected market being online retailers.
While companies will be laying off surplus staff over the coming months, there will conversely be a greater demand for solid managers with a track record in building a successful, profitable business. However, senior executives who can marry new media flair and knowledge with an established business background will be in high demand. Generous stock options are not going to be enough to tempt executives on board; they will be seeking a more visible and secure package, namely higher basic remuneration and bonuses. This represents a big challenge to the recruitment industry that will need to use all its expertise and endeavour to seek and place senior level staff.
www.maya.co.uk
Consolidation the next step in New Media markets - 03/2001
Marie Cronogue - MD - Maya International