If you own an independent recruiting firm, you know the struggle of being “all things to all people.” And being “all things to all people” is not a sound recruitment business strategy.
To your candidates, you’re a career adviser. To your clients, a business consultant. And finally, to your employees, a boss. And even while you’re wearing all those hats, you still have to think like a business owner!
It’s enough to exhaust anybody. You probably don’t find the time to really think about your recruitment business strategy very often. You’re too busy with all the obligations you have right now to worry about years down the road.
Here’s the problem: If you’re like most recruiters, your recruitment business development plan needs some serious attention—pronto.
Recruitment business strategy guidelines
To help us map out a solid recruitment business strategy, we’re going to draw upon the wisdom of Barb Bruno, CPC/CERS of Good as Gold Training. Barb knows all about business development strategies for recruitment agencies, and she is happy to share her wealth of wisdom with Top Echelon and our readers.
In fact, Barb has four main points in regards to developing a long-term talent acquisition strategy for professional recruiters and search consultants. And that strategy involves making placements during both good times and bad times.
Below are Barb’s four key points:
#1—Work the right search assignments.
According to Barb, some recruiters waste time and money by working on the wrong searches. You probably consider your firm successful when you are rolling in job orders and hunting for a variety of titles. However, this is one area where diversification is NOT your friend.
According to Barb, there was once a recruiting agency owner who could not figure out why his fill rate was so low when his recruiters were so busy. Probing further, she discovered that his team was working on searches for 68 different job titles. She asked him to conduct revenue modeling to see where the money was actually coming in, and he was shocked by the results: 90% of the agencies income came from only six job titles, and they only had a 38% fill rate for those six titles!
“Within a few months of focusing their searches on the six instead of the 68, they were filling over 65% of their orders,” said Barb.
Barb’s rule is s simple one: target 85% of your marketing and recruiting efforts at your best business, and realize there are “riches in niches.”
But don’t ask about snitches . . . or Sneetches, for that matter.
#2—Make your agency “recession-resistant.”
Let’s face it: you’re not going to make your agency “recession-proof.” That would mean you make the same amount of money in the same ways during a recession than when times were good. But you can make the same amount of money in different ways through varying means. But before we get to that, let’s address how you can tell if your agency is poised to be serious trouble during the next downturn.
According to Barb, these are signs that your agency could be in danger:
- One client represents over 15% of your revenue.
- You only have one contact at most of your client companies.
- You are only a vendor to your clients.
- Many of your clients only have one point of contact at your firm.
- You own the firm and its assets.
- Your “big billers” basically run their own shows.
- Your “big billers” supervise other recruiters on your team.
“If one or more of these are true, you are teetering on a cliff,” said Barb. “It’s critical to develop a strategy to put your recruiting business on more solid footing.”
#3—Create an exit plan for your future.
Most firm owners are so busy trying to drive their annual profit higher and higher that they never stop to consider much their direct hire business is actually worth. Hint: the amount your firm bills annually is not the amount it will sell for. Not even close.
“I often receive calls from owners who went to sell their business and were stunned to find out it has little or no value,” said Barb. She gave the example of an owner who billed $2 million in direct hire business annually, but ended up with a best offer of $25,000—for everything, including the equipment!
According to Barb, there are two main reasons why this can happen:
- As an owner, your personal production makes up 35% or more of total sales. The problem with this is that you own too many of the key relationships with clients. There is no guarantee that those relationships will stay with the business when you sell, and that dramatically lowers the value for potential buyers.
- Your business has no additional sources of revenue beyond direct hire placement fees. You have no recurring revenue or diversification if you only work direct hire searches. Again, this means that the possible value of your business to anyone who is not you is unpredictable.
If either of these scenarios apply to you, you need an exit strategy for your recruiting business. Hopefully, one that will pay you more than $25K as you plan to walk out the door.
#4—Make both direct hire and contract placements.
According to Americans with prosperity, nearly 60 million Americans—about 36% of the country’s workforce—performed some form of freelance work, such as independent contracting, during a 12-month span between 2020 and 2021. Surely, the pandemic had something to do with that, and with the rise of remote work and hybrid work, freelance and independent contract work is certainly on the rise.
And yes, not all 60 million of those Americans were placed in their contract position by a professional recruiter, but many of them were. There are contingent workers in nearly every industry and at almost every level, which means your clients could be using them and you might not even know it.
“If you aren’t offering contract staffing, that doesn’t mean your clients aren’t using W-2 contractors,” said Barb. “They are hiring them from your competition, and you are leaving money on the table,” said Barb.
Here are some more fun facts about contract staffing and the flexible workforce model:
- Adding contract staffing to your direct hire business model dramatically increases your business’ inherent value because the revenue is recurrent.
- Historically, when direct placements are down, contracting is up, and vice versa. Sometimes, both are up (as is the case right now), but rarely, if ever, are both down.
- Hiring authorities used to keep staffing and direct hire separate, relegating one to a staffing agency and the other to a search firm. However, they now prefer working with a trusted full-service firm.
If you want to know about how to make contract placements, you’re in luck. Our friends over at Foxhire (formerly Top Echelon Contracting) are experts in this area, and they would be glad to speak to you. Visit their website or give them a call at 888.534.9417.
And you’re in further luck because we have a free training video on our website that delivers more expertise and insight from Barb on this subject. That video is called “Simultaneously Grow and Protect Your Business.”
Your recruitment business strategy and a split network
Developing a talent acquisition strategy for your recruiting agency goes can include other things, as well. One of those things is membership in a split network like Top Echelon’s. The bottom line for success as a search consultant is making placements, and our recruiting network can help. That’s because Network members share thousands of job orders and millions of candidate with one another in their quest to make split placements.
“Split placements?” you might be asking yourself. “I don’t want to split a recruiting fee!”
What if your choices are half a recruiting fee or no fee at all? We’re willing to be that you’ll take the former. After all, as they say, “Half a loaf is better than none.” That’s because the split placements that recruiters make in Top Echelon’s recruiting network are placements they would not have made on their own. They needed the job orders and/or candidates of other recruiters to “make the magic happen.”
Click HERE to apply for membership in TE Network™!
Your recruitment business development strategy and ATS
Your recruitment business strategy should also include your recruiting software or applicant tracking system (ATS). Because you have to keep track of your numbers before you can know what they are and improve them. Whatever those numbers might be.
Top Echelon Software contains key features that can help you keep up with your business development tasks. In fact, you can create a sales funnel in our software using features such as the following:
- The Contact Importer
- Hotlists
- Activities and Follow-Up
- Email (mass email, warm email, transactional, etc.)
But don’t just take our word for it. We want you to try it for yourself, and that’s exactly what you can do. First and foremost, you can request a recruiting software demo of Top Echelon’s applicant tracking system. However, in addition to that, you can also get free recruitment software for 15 days as part of your Top Echelon Software trial.
And since we were just talking about Top Echelon’s recruiting network, it’s important to note that Top Echelon’s applicant tracking software integrates seamlessly with membership in TE Network™. You can “level up” your recruitment business strategy for even better results. Check out our recruitment software pricing page for more details.
Contact us today to see how Top Echelon can help your recruiting agency!
(Editor’s note: Barb Bruno training techniques have guided thousands of recruiters to a higher level of sales and profits. To contact Barb, call call 219.663.9609, email support@staffingandrecruiting.com, or visit Good as Gold Training online.)
