It is no secret that Recruitment is a highly competitive industry and one in which barriers to entry are lower than ever. It’s estimated that more than 6,000 recruitment firms were set up last year alone, as the rise of technology has made it increasingly easy to become a recruiter. The simultaneous rise of internal recruiters (36% of organizations), where companies internalize their functions, has resulted in the agencies no longer being commissioned for positions that are easier to fill. Therefore, given the increase in competition, how should recruiters look to adopt?
Understand your strengths and weaknesses
In the first instance, understanding your own strengths and weaknesses as a business is a good place to start. What are the unique selling points of your business? What are your strong points, where do you feel you miss out, and how do you naturally differentiate yourself from other recruiters? Once you have that clarity, you may want to analyze financially the performance of clients, time spent versus income generated. For example, you may have a client who, in the last year, has instructed you on ten vacancies, but if they have not hired any of them, are they really a client?
From that point, there is another set of questions. For the hires that you have made, what are the fee structures you are offering? How often do you review your rate structure with your clients? Are you selling yourself short on rates? Could you be billing more for doing exactly the same job? Then you can ask how your internal compensation is working. Who are your star performers, and how exposed are you to any of them leaving? What are you doing to then incentivize them to stay?
For people who are underperforming, how can you help them? Do you have people who should be doing better but are not? Are the desks they are working on even viable? Should they be pivoted to other areas? Alternately, if they can’t be pivoted and the desk is not viable, what then? Are you offering capabilities that are losing you money?
Keep on top of market changes
Then look at opportunities. How good are you at keeping on top of changes in the market? Which are the fastest-growing parts of it? How fast are you able to react to changes in market conditions? How long will it take to monetize new opportunities, and what is the opportunity cost in the meantime? Fundamentally, what are your Blue Ocean opportunities, and what do you need to invest to take full advantage of those?
With all of this in mind, are you implementing best practices at each and every step? If not, what can you do better? Is it looking after existing clients or generating new ones? Is your team managed correctly, and how could you incentivize them better? In fact, anonymized studies show that while individuals often say that money is their reason for leaving, a bad relationship with their line manager is actually the most likely reason for them to go. Conversely, an individual will actively over-deliver if they are managed optimally and well-motivated.
Where to focus?
If you are on your A game, then red ocean competitors will struggle to steal share. Focus less on the day-to-day and more on underlying trends. Focus on analyzing innovation amongst current competitors and potential ones. For a recruiter, what is it that a job board is doing in the digital space that could be incorporated into your website? Job boards are likely to be at the forefront of the digital innovation wave. By implementing best practices from there, you can leapfrog your competition and be the industry leader.
Alternatively, what is it that recruiters do well in other markets that could be done better in yours? For example, why is it that in the US, due diligence (meaning pre-employment screening) is a standard service offered by recruiters, while in the UK, it is not? For your American clients, who are used to having that service when hiring in their HQ, would they be prepared to pay extra for it in your market? Are any of your competitors monetizing relationships with clients by offering additional services that you are not?
You can make assessments the same way with candidates: are any of your competitors offering bespoke services deploying experts (at cost) to redo their CVs so as to maximize the impact to potential employers in return for exclusive registration? Could you do that? What about a social media due diligence tool?
Innovation
To conclude, in a commoditized service industry, innovation becomes central to being a market leader. Identify which of your competitors innovate and look to see what you can then replicate. Also, look for practical innovations you can implement outside your immediate competition to enable you to stand apart. Meanwhile, ensure that all aspects of your core business function are optimal, so you lose nothing to red ocean competition.
Over the last sixteen years, Vacancysoft has worked with recruitment firms of all sizes to help them map out market activity in order to identify changes in demand. For more information about how we can help, please contact us.