PART 3: THE MARKET
- “How well is my recruitment agency performing?”
- “How are my competitors doing?”
- “What are the market conditions?”
- “How do I set recruitment fees?”
This page is an excerpt of Bootstrap Recruitment: a growth handbook from eBoss. It will be published as a free, downloadable ebook, and investigates strategies for agency growth in 2018 and beyond.
In this chapter, we consider how external factors from the market can impact and shape your growth strategies.
If you are just starting out, it is really important to carry out some intensive market research for your area of recruitment. If you’re already established – be honest: how long has it been since you last produced a really thorough industry report? The important point here is that there is no such thing as too much industry insight.
Recruitment is enjoying a period of sustained growth, right now (mid-2018). That means rapid changes, and plenty of them. Tech is evolving, opportunities are being created, and demand is reaching a peak. If you don’t have a full insight of the market, you may be focusing your resources in a sector that is already saturated. Worse, you may miss a golden opportunity for growth that is there for the taking.
But what market data should you base your decisions on? What differentiates a top priority from a side interest? When should you diversify into new sectors, and when should you double-down on existing targets to increase market share?
In this chapter, we will look at all of these points. Just because a competitor is dominant today, does not mean they always will be. If you can nurture existing clients towards spending more, then you can expand, despite a squeeze from the market, as we saw in Section 2.4: ‘Smarter Targets’).
But first, let’s look at the key areas of the market.
(Roll your mouse over the image for explanations.)
Don’t neglect the importance of location to your enterprise – or the value of understanding the market beyond your immediate locality. Aim to understand the current recruitment market locally, nationally, and across borders.
Professional consultants Gartner suggest that the location of a job is the single most important factor for candidates, when deciding whether to accept a position or not.
What does that mean for your agency?
As a recruiter, you balance a two-way relationship. If your candidates are telling you that location is their priority, you want to pay attention to that. But consider how “location” can act on all sorts of scales. Nationally, Britain is a desirable place to work. Regionally, London is perhaps the most prestigious place in the world for jobs within certain industries. But does any of that affect your candidates?
Job location plays a part wherever you are. What are your clients’ business premises like? How good are transportation links? These are the aspects of job location that may be more important to your candidates. The last thing you want is to have a candidate offered a role, but reject it because their commute would be too laboursome. Having an understanding of these details can help you to build shortlists with ever-improving success rates.
We cannot all recruit into highly desired locations. But a successful recruiter will learn how to find a solution for every opportunity that comes their way.
It may be a good idea to factor in legal considerations at this point. Who is eligible to work, where can they work, and when?
Consult with legal professionals. The initial cost is more than worth the time spent on researching these matters for yourself. You also have full confidence in your legal standing, which emboldens your decision-making.
Could geopolitical factors – like Brexit, or the GDPR – make an impact on your database of candidates? How future-proofed is your current talent pipeline?
Assess your current performance and standing: do industry averages reflect your own experiences of the current market? Are you under- or over-achieving?
In 2018, we are looking at a market that many believe is reaching a natural peak. But this could be an advantage for smaller or less established agencies that have discipline and do not over-reach their goals.
But this sounds counterintuitive, so why is that? Because small, agile firms are well positioned to adapt the way they work and pivot towards fresh opportunities during a market downturn. Even a limited opening can sustain your business. Meanwhile, industry giants – by their very nature – will always be required to chase volume, to some degree.
At the same time, smaller agencies have fewer processes in place, so there is less exposure if revenues do begin to fall. And, lastly, a smaller enterprise offers higher percentage growth rates while requiring considerably less turnover to achieve them.
Drill down on your recent performance; then produce a productivity map of your enterprise. Using data from the previous 12 months, find answers to the following questions:
• Did the business as a whole hit its targets?
• Did all consultants and staff hit their own targets?
• Which quarter was the most successful of the past 12 months?
• Which month was the most successful?
• From which industries did you generate the greatest share of your income?
• Are there any similarities between your top clients?
• Do your most successful candidates share common traits?
• Are your top clients all looking for candidates with common traits?
• Which traits are they?
• What was your most successful source of new candidates by volume?
• What was your most successful source of new candidates by placements?
• Which was your most successful strategy for winning new clients?
• How well did your marketing strategies perform?
• Which processes performed well in respect of resources used?
• Which processes were a drain on resources?
Now ask the same questions of your direct competitors. You won’t be able to access all of the data that you need for every question, but make the most of what you are able to learn from publicly-available data about their performance. Specifically, try to answer each of the following questions:
• What sectors do they work with, which you don’t?
• What kind of clients are they working with?
• Who are their top billers?
• How do they present themselves in their marketing, on LinkedIn, etc?
• How are they selling themselves on their website?
• What are their online reviews like (Glassdoor, etc)?
• What’s their approach to new candidates and clients?
Then see how your agencies differ. Take inspiration from the your competitors when they are achieving big wins. Learn from their mistakes as you would learn from your own. A little market research saves a great deal of trial and error.
With company and industry data now at your fingertips, you can start to inform your decisions with real-world data. What are your priorities?
We have previously posted Part One and Part Two of the Bootstrap Recruitment growth guide.
The full text will be published soon. If you want to find out when it is ready, you can either bookmark this page, or subscribe to our newsletter. That way, you get a notification to your inbox as soon as the next chapter is online!