• 16 Nov 2016

    How to fine tune the performance of your Recruitment Business

    Look underneath your bonnet, not at your GPS!

    Improving the performance of your business is a little like trying to get more mileage out of your car or getting to your destination quicker.  We can stare as much as we like at our Sat Navs or out the front of our car windscreens, looking at the road ahead and trying to figure out the quickest route (or a few clever shortcuts) to get to our target destinations, but will this get us to where we want to get to as quickly and as efficiently as we want?

    If the engines in our cars aren’t as finely tuned as they need to be, we’ll never be getting good enough fuel efficiency or at worst, could find ourselves broken down on the side of the road as everyone else passes us by.

    Identifying where you want to get to in your business is, of course, critical, but once you have agreed where you are going, our focus should quickly shift back under the bonnet and towards how we can eliminate as much wastage and maximize efficiencies across every component of what we do.

    Fuel Up

    The fuel that powers our engines is, of course our customers. But too often, we find recruitment businesses fixated with overfilling their engines with fuel, obsessed with attracting as many new customers as they can (all business is good business, right?), instead of deciding whether or not they have got the right fuel in their engines in the first place.

    We allow our consultants to engage and work with customers who really they shouldn’t be spending their time on – customers who are neither valuable to us, nor do they appreciate the work that we do for them.  Customers who drive down our margins, devalue our service offering and show little to no loyalty to our relationship or us.

    Would a car mechanic spend the majority of their week working on and fixing cars, with the knowledge that the majority of their customers will probably not even pay them for what they have done?  Unlikely.  So why are so many recruiters content to do so much work for free for their customers, especially at a time when for many of us, finding candidates is 3 times harder than it has ever been?

    Most petrol pumps have filters on them to purify the petrol and refine what we put in our engines – we should use the same filtering process when it comes to filling up our sales funnels too.

    Shift up the Gears

    Driving in first gear will eventually get you to where you want to get to (and make a lot of noise along the way!) but you’ll end up putting huge strain and pressure on your engine.  That is the same for our consultants.

    The playing field of recruitment is evolving dramatically, shifting from a transactional, volume driven model to a far more transformational and targeted one.  This in turn requires a shift in the style, the approach and the quality of activities that our consultants employ.  It is no longer good enough to coast in first gear and go through the motions, hiding behind emails and portals, passively interacting with customers and candidates.  We need to step up a gear or two in how we think, how we source and interact with new talent and how we engage with our client base.

    As an example, I recently met a recruitment organisation who defiantly boasted about one of their key market differentiators being the number of local offices they had, each one situated in the heart of where their customers were based.  We then did a quick analysis on the number of face-to-face meetings their consultants were doing on a weekly basis with each of those customers, only to find out that the record for the last month was held by a consultant who had completed just 3 client visits in the whole month!  What a classic example of a business content to cruise in a transactional, low gear instead of firing up through to 5th or 6th and transforming their relationships with their clients (yes, they did also complain that client control was an issue in their business!).

    Change your Tyres

    Whenever you take your car in for a service or MOT, one of the first things they look at are the state of your tyres, and more importantly the tread. The more worn down your tyres are, the less grip you’ll get on the road, especially when conditions start to become a little challenging.

    There are many recruitment businesses who have done a good job of maintaining their tyres over the past 12 to 18 months; however quite a few have started to slip around, losing some of their traction and in some cases have started skidding out of control.  Their strategies have been worn down, and they have lost their way.  Mistakes are being made, corners being cut and wastage is rife across their businesses, albeit some times without even being noticed.

    If I take a London IT recruitment business we worked with recently, by way of example.  The last 12 months had seen them grow by revenue, but profits were down.  Their recruiters were busier than ever, but they were making less placements.  New customers had increased, but their retention of existing customers had declined.  So what had been going on at a time when they should have been cruising at full speed?

    Quite simply, they lost grip and therefore control of the road.

    Their business strategy didn’t afford them the most appropriate foundations to exploit the growth opportunities that lay ahead and so “strategy” became replaced with more “activity”.  At a time when customers were screaming out for new and better ways of working together with recruiters, more streamlined processes, more encompassing talent solutions that focused on improved efficiencies and greater costs savings, this agency simply just did more of what they always did.

    At a time when candidates were being more selective about their employment options, where they were starting to command more attention from recruiters and hiring managers alike, where they were happy to stay hidden / passive and expect to be found, this IT recruitment agency chose to concentrate their consultants towards volume based activity KPIs instead of quality based / outcome focused metrics.

    Not once did anyone really question why the profit numbers were decreasing – the focus was stuck on doing more of the same with a view that by doing so, you’ll get a better result.  There was no strategy, no grip on the road.

    This is the time now to rethink your strategy, analyse what is working and what is not working, change your tyres, align what you are doing with what the markets are dictating and ensure your consultants follow a plan that is both strategic and as well as outcome focused.

    Put new business development on hold just for a moment and focus on squeezing more out of what you already have.  Look at each of your consultants’ current desks - how much of their business is on a truly exclusive or retained basis, or are they always up against 4 or 5 other agencies?  What percentage of their current placements are high value / good deal sizes and how many are them aren’t? What current conversion ratios are they getting from roles to interviews to placements and are we letting opportunities slip out?  What is the current retention rates of existing customers and how much of their annual recruitment budgets are we getting? Is this growing and do we have a plan in place to penetrate deeper within our existing client base?

    Getting everyone on board in the business, from senior management to consultant, to run an MOT on what they are currently doing is never a bad thing, and can lead to a whole host of improvements in performance.

    Typically, car owners get their cars serviced once a year, or when they know a particularly bad spell of weather is on its way.  That’s fine... for a car.

    For a recruiter, for a recruitment business, however, we should be opening up the bonnet and looking inside all the time, trying to find new strategic ways to reduce wastage, improve efficiencies and maximising the business we already have.

    So, check your tyres, fuel up and shift up a gear or two… the road ahead is paved with gold!

    If you would like to run a quick, free healthcheck on your business, visit


Published by James Osborne November 16th 2016

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