No amount of strategic business planning could have predicted what the world experienced since the start of 2020. According to The Office for National Statistics, coronavirus has shrunk the UK economy by 25%.
The resulting impact is, that over the last few months many businesses have closed, or significantly reduced their operations and workforce. With the UK having the third-largest recruitment market in the world, it has hit those working in the industry hard. In recent years, we’ve become accustomed to an active candidate-led market, with companies bending over backwards to attract the best talent. In January 2020, employment in Britain hit a record high, but we are now waiting for a wave of job losses and hiring freezes.
So, what happens now? Many small to medium-sized recruitment businesses started the year with a clear strategy to hit growth targets and have since been forced to rapidly backtrack. Business owners now need to consider their recovery plan to retain and advance their market position.
Whilst there’s no magic wand to turn around a business, especially during a crisis, there are a few pointers to be aware of, and implement to ensure your business is more resilient and better prepared for what lies ahead.
1. Review your business model
There’s always a different way of doing things. Have you been supporting an area of your business that hasn’t been performing? If so, change it. Now isn’t the time to be supporting anything that’s not working or providing services that don’t add value. Those that adapt, survive. Speak to your clients and find out what they really need, and how their hiring requirements are likely to evolve, to help them achieve their objectives.
Clients may not want to hire permanent employees, yet are open to contract, short-term placements to fulfil priority project work. If this is the case, offer contractors. As long as you agree on the right payment terms that allow you to pay contractors on time this can be a good way of retaining critical client business.
As we’re experiencing a client-led recruitment market, those who are still hiring have never received so many job applications; with internal recruitment and HR teams working hard to keep on top of furlough, and possible restructures, etc. some have never been busier. The last thing they have time for is wading through hundreds of job applications. This could be where your services come in to offer technical expertise to help qualify and complete initial interviews. It may not be a full placement fee, but it is invaluable for the client and could facilitate you seeing candidates through the whole interview process and charging accordingly.
Yes, recruiters are usually specialists, however, can you place different types of candidates into your specialist sector?
For example, if you usually place accountants into accountancy firms, can you also place a variety of professionals into the same accountancy clients, such as HR managers or marketing executives? Leverage your existing client relationships to understand what’s going on in their wider business and don’t be afraid to let your clients know why you’re taking this approach. If you place candidates into roles, which lie outside your usual sweet spot, but have successes in doing so, you have the opportunity to build long-term secure relationships with your clients who will see the benefit of partnering with you, rather than a new recruiter with no inside knowledge. In these market conditions, companies want to streamline their processes, including their suppliers, if you can increase the value of the service that you provide in more than one area, then you position yourself as capable, flexible, and reliable, to pick up any future work that becomes available.
3. Manage costs
Keep a careful eye on costs. Are you spending money on items that are more of a nice to have than a necessity? Can existing contracts be renegotiated that cannot be cancelled to support your company at this time or even defer payment until a later date? Are you paying for subscriptions or services that employees aren’t currently using? Obviously, your business still needs to operate, and you cannot cancel everything, however, this is the right time to investigate alternative cost-saving options. These include free or inexpensive tools that assist in the interim to help you run your business and manage remote workers more effectively.
Another aspect of managing cost, especially in recruitment businesses, is cash collection. Make sure all members of your team are focused on agreeing and securing payment terms in contracts to ensure invoices are paid on time. Offering small reductions for early payment or percentage increases for late payment can help with incentivising clients to make sure your businesses maintains steady cash flow.
Yes, we all want everyone back in the office and working as quickly as possible, however, you need to carefully consider who and when to bring people back from furlough. In this environment business, development, and client relationships are key, therefore a resourcer or someone who’s not client-facing may not be your top priority to return to work. Think about who will generate the most value on a part-time or full-time basis, where they will be busy and capable of creating new business opportunities. Also, when employees are working part-time, would they be better of splitting those part-time hours across four or five days of the week, rather than just logging on and working for two full days? Discuss and agree on what works for you and your team members, but don’t bring people back too early otherwise you could be setting them up to fail in a slower market. Plan out their target list of clients and potential pipeline and market activity, determine from that if you think they will be productive, have enough leads to follow, and convert sales.
Many business owners have faced the sad reality of having to let some members of their team go. An unprecedented event can lead to hard decisions having to be made to ensure the survival of a business. This has resulted in many talented individuals becoming available to explore other career avenues and opportunities. Although hiring in a pandemic with an uncertain economic outlook may not seem like the ideal time to be interviewing and taking on new team members, it is worth investigating the type of talent currently available. Now maybe the only time to hire your ideal recruit. Whether you look to hire them immediately or come to a future arrangement, many are open to conversations and reviewing their options. If you want to come out of this situation in the strongest possible position, you want the best team by your side.
6. Office space
Do you need all the office space you currently have? It is time to review how your business and team operates. With recent events, remote working has become the new norm. Do you need large office space at a prestigious address, or could you benefit from a smaller more flexible office arrangement? Already many businesses use shared space in WeWork and similar co-working spaces to help reduce costs and create a more collaborative working environment. Working alongside other companies and business owners can generate beneficial networking and business opportunities. Although many employees will look forward to returning to the office full-time, and it is important to provide a means of allowing them to safely return to an office, when appropriate. Some employees will however want more flexibility with options of working from home. This situation has proved that recruitment teams are more than capable of working and billing remotely. This approach reduces company office costs, travel expenses, as well as general facilities and operational costs.
If you’re a recruitment business owner and want investment, strategy, or specialist advice, speak to the recruitment business experts at Recruitment Entrepreneur.