View Questions

This is a problem most recruitment company owners face as some point in the life-cycle of their business: what do I do when demand drops in my chosen market?

You have essentially asked if diversification is a sensible option to better ensure business growth. But before you create another division within your business you must first research whether or not an opportunity exists, and moreover, whether or not an opportunity exists with the resources you have at your disposal. Diversification can work to spread your liabilities as you are no longer reliant on the buoyancy of a single market, but at the same time it could result in an erosion of your brand, a drop in service levels and poor returns on investment.

In terms of adopting a diversification strategy, I have seen a number of recruitment agencies take this approach in light of recent market conditions. For example, a recruitment firm specialising in accountants and actuarial staff has managed to successfully branch out in to the wider financial and private banking market. Equally, a firm such as yours could consider venturing into a related market such as change management/management consultancy. It is all about ensuring that clients understand the value-add you can bring to the table by hiring in related sectors, but you need to ensure that you have the right calibre of staff operating in this new market without spreading existing staff too thinly as otherwise your core business will suffer. If you feel this could be the case you need to factor in the cost of hiring in the correct expertise, and ask yourself the extent to which the cost of doing so, alongside training staff to become profitable, is worth the initial expenditure if you are facing tough economic times.  If I were you I would start by taking a long, hard look at your business as it is now, operating within a single sector. There are always areas to improve, without resorting to diversification.

Firstly, look at your value proposition; the part of your business that stands out from the crowd. What is it about your agency that makes you special? Is it your staff, your network, your brand?

You then need to look at how you communicate with your chosen market. Perhaps you only use phone and email. If that is the case I would look into leveraging things like social media and events. These marketing apparatuses can build trust with your clients and guard against the unreasonable terms you made reference to in your question.

I would also make time to evaluate your current candidate sourcing methodology. When you supply the best candidates on a consistent basis you start to be able to dictate the invoicing terms. There is indeed an abundance of high quality candidates in the market but many who are perfectly qualified for the financial sector are deciding to enter other industries through a lack of opportunities. This means it is not only a matter of selling the job role any longer; it is also a matter of selling the industry.

On a final note, diversifying is not the only manner of opening up a new revenue stream. As recruiters there are opportunities for us to get involved in the entire human resources function of a business i.e. training and assessment. There may be other ways that you can add value to your clients.

This question is unsurprisingly at the very heart of what the Institute of Recruiters (IOR) is trying to achieve and is probably best answered by the like of Azmat Mohammed, Director General of the IOR. That said, I do have some strong beliefs on where to focus our energy.

In my eyes the solution to improving the recruitment industry’s reputation is two-fold: 1) to provide all recruiters with a thorough education as regards the functions and practices of recruitment and 2) to provide professional support and training to all recruitment agencies from the likes of government and trade bodies (like the IOR).

The underlying message of my first point is that the profession of a recruitment consultant is a highly sophisticated role when executed well.  The methodology behind this education is up for grabs but it has to become paramount amoungst all recruitment business leaders. A good starting point would be to iterate how Human Capital, as a resource, is arguably the most important aspect of business because without it you have nothing. As such, recruiters need to understand how their job relates to the wider complexion of a business.

Once educated, recruiters will be able to better communicate with clients and other members of the wider population about the complexity and significance of their job roles, thus changing attitudes.

My second point relies on the government and recruitment related institutions working together, which is arguably where we have fallen down thus far. These powerful bodies need to collaborate to set minimum professional standards, such that the individuals and organisations outside of the industry are assured of the quality of services accredited agencies provide. Furthermore, I like to think of every recruiter as an ambassador for the industry; hence if we improve the skill sets of our recruiters we will improve the image of recruitment.

The IOR has made in-roads on this point having struck a deal with the Institute of Training and Occupational Learning (ITOL). The outcome of this deal is the ‘Train the Trainer’ solution, whereby world-class training qualifications will be delivered to recruitment and HR practitioners. This is a good start.

Another project that the IOR are spearheading to provide professional support is a training needs and analysis model produced in partnership with the University of Central Lancashire’s Innovation in Society Unit. Many of you will be aware of the National Occupational Standard for Recruitment scheme, but in its current form, the scheme has no way for recruitment businesses to measure how good their consultants are against the standards. This latest initiative should work to change all that.

On a more micro level, I would encourage individuals across the industry to engage with the institutions I have mentioned in this piece. Returning to the notion of you acting as an ambassador for the industry, you might want to look into contributing to publications, events or social media communities that are concerned with altering public perception of the recruitment industry.

This is a very apt question for the present-day recruitment market as the movement of consultant staff between agencies is at an especially low level through concerns over job security. This makes having a resourcing plan for talent outside of the recruitment industry a sensible option.

A recruitment strategy that looks further afield to find talent will also result in a much more diverse workforce. In many cases those who have no recruitment experience will be able to offer a fresh skills set that could add considerable value to your business. For example, by bringing together individuals from different vocational backgrounds your business may be able to increase its market share thanks to the ability of your diverse workforce to communicate with a broader range of clients.

One of the most important parts of your resourcing plan should be the audit of your existing team’s expertise to identify potential gaps that those with transferable skills could fill. Equally, you must identify the cost/risks associated with training those without experience.

If you remain confident to seek lateral hires you must formulate an induction scheme to fully assimilate your new workforce.  Perhaps a training academy involving psychometric tests to ascertain whether the values and skills of potential recruits match well with your business.

In terms of the key skills and aptitudes you should seek in a candidate with no recruitment experience I would consider the following:

-  Strong work ethic

-  Ambition and desire

-  Tenacity
-  Exemplary networking skills
-  Strong client relationship abilities
-  Candidate care
-  Negotiation
-  Target-driven, results-orientated
-  Team player

-  Stoicism

Of course, you have to use your discretion to judge the relative importance of these qualities dependent on the job role open.

As well as learning to recognize the qualities that make a good consultant hire, there are a number of mentalities that must be avoided. The main one to bear in mind is a pre-formed idea of how to sell, or at least narrow-mindedness in terms of sales practices and techniques. Hiring from outside recruitment you have to be sure you can stamp your own sales style on your consultants.

All this is very much easier said than done, but perhaps the best way to unearth these qualities is to conduct competency based interviews. Moreover, requesting analogous situations to the ones your consultants typically face will work to sort the wheat from the chaff. One particular colleague of mine, David McLean-Reid, CEO of Eden Brown, testifies that in these circumstances the ultimate check is something he terms the ‘pub-test’. If he can hold your attention in conversation for up to an hour over a pint or two then he will almost certainly be able to do the same with clients. Whether or not this works for you…there is only one way to find out…

The truth of the matter is that if you look at some of the biggest names in recruitment, many came across as lateral hires as they found that their transferrable skills provided a ‘hand in glove fit’ to the requirements of the role.

Ensuring that the supply of available candidates matches the demands of clients is perhaps the most important thing to get right for any young recruitment agency because this is what drives your business forward. Moreover, the candidates that you have on your books are as much a reflection of your business as your consultants are when they attend their interviews, and as such, are integral to the development of your reputation. Subsequently, it is not just about attracting as many candidates as possible – it is about attracting the right candidates.

How do you go about finding the right candidates? This is all down to networking in the right circles and communities. When all is said and done, canvassing for candidates on a face-to-face basis is the most effective format. This entails attending industry events as well as hosting your own. These events do not have to be grand (or expensive) expos, they can be intimate affairs, with only a handful of invites. I remember hosting my own a number of years ago when I first set up Alexander Mann, and they worked well to enhance my reputation as they became a showcase for what my business and I could offer on a personal level.

It is this personal edge that will make all the difference in the midst of these market conditions. In this market it is difficult for the recruiter who is trying to coax candidates out of their current positions; businesses are accused of ‘hoarding’ staff, employees are reluctant to move through risk of not keeping their jobs and falling numbers of companies are expecting to expand their workforce. This is why you have to position yourself as the business that understands these conditions, but can offer a solution on an individual basis.

One of the most effective candidate canvassing schemes I have used regularly over my career are referral mechanisms. Depending very much on the style of approach that your business most warrants, i.e. volume versus tailored, you can send messages to key contacts of yours asking them for referrals to recommended candidates in return for vouchers or something to that end. If you are all about volume then quite large mailshots will be good, yet if you need a more targeted approach, the events that I spoke of above can be a great way to introduce your incentive scheme.

Job boards are a difficult format on which to express this personal touch. However, you mention LinkedIn, and this is a great platform on which to communicate and provide evidence for your placement achievements. Potential candidates need to be exposed to these success stories, or they will never move. You may be using LinkedIn already, but I cannot stress enough the opportunity the platform provides.

Of all my recruitment businesses I would have to recommend Webrecruit as the best example of an agency utilising LinkedIn to its fullest effect. The first thing Webrecruit’s consultants do is profile their current candidate list. In doing so they check for which groups they are members of and contribute to, which companies they follow and which connections they have in common. This way you will come to inhabit the same online communities, where if you contribute regularly enough your potential candidates will get to know you, and on the flip-side you will gain a better understanding of their employment drivers. This means that when you eventually come to contact your candidates directly they will be all the more open to your advances.

The simple answer to this question is yes. Having a database of candidates categorized and profiled according to your clients’ varying demands is what you should be aiming for.

A 48-hour time frame is no time to leave yourself for presenting selected candidates to your clients. Now that you have seen the format of the RFPs you can better anticipate what kind of IT staffing requirements the government have. You say that your candidates have been working in similar roles and have relevant experience, but, as you undoubtedly know, there are far more qualities that go under the microscope before a client makes a hire. Perhaps it might be a good idea to start up conversations once again with the government departments to find out exactly what the most important factors are in guiding their recruitment decisions …is it wage expectation? Personality type? Qualifications? This will enable you to better categorize your candidate base.

When you have a better idea of what kind of candidates your clients want you will have a better idea of where to find them. The candidate canvassing techniques that you implement will be dependent on the profiles of the candidates that you want to source. If the government are typically hiring from other public bodies then you should be targeting these institutions. If the government are hiring for specific projects, target public bodies or companies that work in an industry relating to the project. The Olympic Games are a great example, as they led to the creation of hundreds of IT contractor jobs.

What makes your position slightly more challenging is the UK’s political backdrop. While you try to grow your public sector recruitment business, government initiatives and policies are working to shrink the very sector you operate in.  On the plus side, with a lower demand from the government you will face less competition from other agencies in the RFP process, but at the same time you will have to up your game to convince the HR departments you work with that your candidates can provide them with an opportunity to produce efficiency savings. The biggest concern for the government right now is cutting the deficit of this country…if you can communicate how your candidates can aid in this process you are on to a winner.

There are several sources for this kind of information:

1)     A number of the most reputable agencies that operate within the financial services market release market reports and insights on a regular basis. These are accessible from their websites or blogs.

2)     Most publically listed recruitment companies have their annual reports available to download from the ‘Investor’ sections on their websites. These reports will often contain useful market overviews. If you target the ones that operate in the financial services sector you should be able to find what you need.

3)     The social media profiles of these same publically listed companies and insightful agencies that I mention above are usually well-tended to and can provide you with very up-to-date information of the financial services market. If you search LinkedIn for ‘financial services recruitment’ you will find a selection of groups that will contain useful insights on the market. Moreover, you will able to engage with the experts from the industry within the group.

4)     The recruitment industry’s publications are very good at keeping up-to-speed with the financial services market. A simple key-word search on their websites will list all the most recent articles on the market.  Some of the publications that I find most useful are listed below:

      i) Staffing Industry Analysts

     ii) Recruitment-International

    iii)The Recruiter

    iv)Global Recruiter

     v)Onrec

5)     A number of advisory bodies within the fields of consultancy, accountancy and asset management produce staffing publications. This is perhaps the most detailed literature on the market so you will be unsurprised to learn that these reports are likely to come with a fee. If you are a young business with a small budget it is still worth purchasing these reports on at least an annual basis.