It was Bob Dylan who famously wrote “the times they are a-changing” nearly 60 years ago, in reference to the Civil Rights movement in America during the 1960’s. Back then, recruitment agencies were in their infancy, and the staffing industry has since blossomed to be worth nearly US$500bn according to recent statistics. Given there seems little doubt that the current health crisis sweeping the globe is having a massive impact on business in all sectors, it’s fair to assume recruitment will be no different. So, what will the recruitment industry look like when we come out of all this?
Doing more with Less
The first thing we can see already is the number of job losses in the recruitment industry itself, as companies big and small have reacted to a dramatic fall in demand from their clients by reducing their own headcount to compensate. Although this is likely to be a temporary reduction in demand as the world eventually recovers economically from the crisis, most recruiters I speak to are cautious about medium term prospects given market uncertainty, and I doubt that many will bring their headcounts back to pre-Covid levels any time soon. So, how will they do the same (or more) with less?
The short answer is they will have to work smarter, and look at innovative new ways to generate revenue, as well as expand their client base to offset the lost fee income from traditional clients. In most cases, marketing for recruitment companies has been limited to the standard “BD calls”, sending in-mails on Linkedin and networking over a coffee or at industry events. None of these are working in the current climate. The need for a new approach has never been more pressing, and those that fail to adapt to this ‘new normal’ may struggle to survive.
The End of the Office?
Any businessperson worth their salt will tell you that revenue is only one half of the equation when it comes to handling challenging times, with the other being costs. Given that we have already seen costs reduced by headcount reduction in many firms, what other options do staffing firms have to navigate the current market?
Probably the biggest expense most of these businesses have outside of staff is their commercial office space, which has often been seen (until now) as a way to position yourself in the market. How many times have recruitment boardrooms discussed getting A1 or A2 rated commercial property leases in prime city locations as a way of demonstrating their credentials to clients and the industry as a whole? I must admit I’ve succumbed to this pressure myself, when setting up a recruitment firm in Sydney many years ago; and have since realised it’s as much driven by ego as it is business acumen.
With many (if not all) recruitment businesses operating remotely in recent months, is it realistic to expect everyone to return to their city-based offices when social distancing restrictions ease? Unlikely in my opinion. I have already heard of webinars discussing how to break commercial leases being conducted by recruitment industry leaders, and with good reason – cash is king right now and paying tens of thousands of dollars a year in rent is a scary proposition. Given they have just demonstrated that their business CAN run remotely, would it not be prudent to look at alternative options in terms of office space? Expect more ‘virtual offices’ where companies hire meeting rooms on demand; or subleasing non- productive space to companies complementary to their own service offering to be commonplace going forward.
A New Approach?
As mentioned earlier, for many years business development strategy in the recruitment agency world has been dominated by phone and email interaction. Anyone who has spent time in the industry will be familiar with the demand to “make more marketing calls”, often to prospects that they have had little or no previous dealings with. It can be an onerous task, and not for the fainthearted.
Social media platforms such as Linkedin (which you’re probably reading this on!), have softened this approach somewhat, allowing recruiters to approach potential clients and candidates more strategically, and with reference to other people they have worked with. Yet in the current climate, businesses are still reeling from the economic effects of Covid-19, making them much less likely to engage with people they don’t know well. So how is a recruiter to approach new business in these changing times?
The strategy outlined above is a classic “outbound sales” approach – where a seller, or in this case a recruiter, initiates customer engagement from their end. Pick up the phone, call someone that you know has recruited staff in your specialisation, and away you go with your sales pitch. Easy right? Not always, and it’s getting less so, especially now.
An alternative approach is “inbound sales”, where a prospect (or client) commences the sales process. You can read more about the difference in these approaches here , but I’m sure most recruiters would welcome enquiries from potential clients right now! So how does an inbound sales approach play out in a recruitment setting?
The key is to engage your potential clients in an environment you know they frequent, and in current times especially, this is online. The most widespread platform for most businesspeople right now is Linkedin, but there are many others, such as industry association sites, industry news sites etc. By sharing interesting and relevant content on these platforms, you not only get your name and company in front of them, but also build your credibility by providing insights that benefit the reader. All without ever contacting them directly!
It’s easier said than done – getting conversion to actual sales is an inexact science – but ultimately it comes down to ‘a numbers game’ (how many times have you heard that in this industry!). The more potential clients visiting your website and engaging with your brand, the more likely you are to generate revenue from them. Given the changing times ahead, many recruitment firms would be wise to embrace an inbound sales approach to complement their existing business development efforts.
I imagine many reading this will be sceptical of some of the points made above, but one thing about change is that it is constant, and there has never in the life of the recruitment industry been more potential change than now. The ability of the industry to adapt is well proven – it coped with the introduction of job boards, internal recruitment functions and the rise of Linkedin Recruiter, yet continued to grow – so there is every chance innovation will rise to the fore and businesses who embrace it will prevail. For those who wish to return to how it was before, it could be a long road ahead.