Everyone once rode the wave, but the house of cards has fallen and the dot-com world has come crashing down to reality. So, what does that really mean?

It means the world of technology is changing, morphing and trying to find its place. Equity is suddenly a risk, not a lock. IPOs are a far-off and often remote possibility, not a guarantee. Existing companies are paring staffs and merging with each other.

And in the world of the headhunter, the recruiter, who rode the wave and placed people into dot-com after dot-com, a metamorphosis is also happening, as firms re-evaluate their place in the new economy and gear up for the future.

“We followed the waves,” said Ted Martin, founder of Martin Partners. “B2C, B2B, B2B2C. When the Nasdaq was rolling, experience was less important than out-of-the-box thinking. That’s a critical piece to understand.”

As the number of dot-coms out there have shrunk significantly and the focus became more on profitability and less on prospects, the people that were being recruited for positions changed drastically, Martin said.

“In a lot of cases, these companies that crashed in terms of valuation crashed because they did not have the experience in the senior management team,” Martin said. “Fundamental business experience is back in vogue – in a big way.”

Thus, recruiters have to once again shift their focus a bit. However, says Michael Wyman, a principal in the Sears Tower office of international recruiting firm Korn/Ferry, the shift doesn’t have to be wholesale. It just has to be an adaptation.

“People were just given responsibilities five years before they were ready for the role,” Wyman said. “[The marketplace] is much more risk averse now. The risk profile has changed dramatically.”

And so, Wyman says, recruiters have a new outlook. No longer is equity going to be good enough, and people who are long on enthusiasm but short on experience aren’t going to cut it either.

“All through 2000, my expression was ‘cash is back,’” Wyman said. “The notion was, ‘come work for us for song and a lot of equity,’ and the experienced people were saying no."

Wyman says CEOs are looking for at least $150,000, and expecting large end of the year cash bonuses. Equity factors in, he says, but by and large, equity has been minimalized in its role.

Patrick Walsh, a director for Chicago-based recruiting firm Spencer Stuart, said cash is back because people have become wiser about options.

“People are much more sophisticated in realistically evaluating options,” Walsh said. “A year ago, people just thought everything was going to go up and up and up, and a lot of people learned the hard way that risk and return go together.”

Walsh says the same thing applies to recruiting firms, who at one time would be willing to accept large amounts of equity in addition to cash to perform a search. Now, he says they are much more wary.

“We don’t take equity without cash,” Walsh said, referring to a practice that became popular during the dot-com boom. “It can be a good move because it aligns incentives well, but it can also be somewhat greedy and inappropriate.”

Firms are still willing to accept equity, Walsh says, because the added incentive of possibly making money later on helps inspire recruiters to find the best candidates for open positions.

“It makes sure that the search firm truly serves the best interest of the client, because if you put some schmuck into a job and he craters the company, you’re not going to get any money out of your equity,” he said.

And so, Walsh says, business continues for recruiters in Chicago and around the globe with a different perspective.

“Our business is really strong, but it’s different,” Walsh said. “A year ago, all hell was breaking loose in executive search. Today, it’s a much more normal – still incredibly fast-paced and still very robust business.

“But God, it was crazy a year ago.”