Despite the much-ballyhooed economic turmoil, the facts are that for most recruiting firms, things are going well. There will always be individual niches in a slump at any given time. Nevertheless, recruiting firms have little reason to complain.
Yet, will this continue? What does the future hold for our industry? Ronald Reagan, who held a degree in economics himself, reminded us that â€œeconomists are pessimists, and have infallibly predicted eight of the last three recessions.â€
Will the grim economic forecasts by the press and various presidential candidates be borne out? If so, how long will it last? And what do we do about it right now?
The first thing for any owner/manager to do is not to deny that a recession can happen to your firm, regardless of your â€œrecession-resistantâ€ fantasies. But the second is to actively plan, obtain information, and implement the steps to get you through it.
Following are 10 tips to consider in preparation for navigating a difficult market:
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Guide: Practical Tips for Remote Hiring
- Make your own evaluations. The concept of three markets, remembering that the only one which concerns us professionallyâ€”employmentâ€”is the last to respond, is critical. In the early stages of a recession, your business may still be quite good. You will believe you can duck it. Wrong. And conducting yourself as though you can will cost you money, and emotion, and possibly even survival.
- Focus on new clients. With the exception of a large bank account, the one thing most likely to assist in surviving a slow economy is a substantial quantity of good clients. Firms or individual consultants still hooked into a candidate-driven mode of operation will find themselves in serious trouble if they do not change their ways. You must focus on developing new clients, even if you have sufficient searches at present. The six-module audio series entitled â€œClient Developmentâ€ by noted trainer Larry Nobles will be of great assistance.
- Obtain candidates appropriately. Reliance upon means of obtaining candidates readily available to clientsâ€”such as ads or the Internetâ€”in a market downturn will gravely compound the error. As large numbers of actively-looking candidates flood the for-free and for-fee job boards and as Internet â€œtrainersâ€ continue to assist our clients in utilizing Internet strategies to find their own candidates, the phrase of â€œLive by the Tech; Die by the Techâ€ will be even more accurate. In a slow and slow-to recover market, only True Direct Recruiting will get you by.
- Cut back on expansion plans. During the past years of extreme growth, what were the chances of a new recruiter, division or business succeeding? Now pause to realize that in a slow market, the likelihood of the success of any of those enterprises becomes much, much less. Firms involved in expansion plans or considering doing so would be well advised to â€œgo slowâ€ for another six months…at least.
- Increase time spent in role-playing. Do the objections to be overcome change in a poor market? You bet they do! Candidates are harder to move, clients more difficult to obtain, fee objections riseâ€¦ Make a list of most frequently heard objections, another list of the answers, and role-play to practice. If your firm doesnâ€™t improve selling skills to reflect a changing market, you really will be trying to do business today with yesterdayâ€™s tools.
- Identify niches and sub-niches. To blindly attempt to work precisely the same market in bad economic conditions as in a boom market is business suicide. You may mistakenly believe your area of specialization is â€œRecession-proof.â€ But hundreds of failed search consultants flooding into your market because theirs isnâ€™t, will change your mind quickly! Identify a narrow sub-niche right now where Demand exceeds Supply, and which maximizes your industry knowledge and contacts, to work in a Recession.
- Implement sound management practices. There are certain standard business practices which have been proven to work in our business. These practices include – but are not limited to – daily written planners, keeping track of numbers and analyzing ratios, and regular skills-oriented sales meetings. The difficulty is that in good times, it is easy to drift away from these time-tested methods. In a poor market, with your staff highly stressed, it will be difficult to tighten controls, no matter how much those controls may be needed.
If business is still good or adequate for your firm, this is an ideal time to re-institute management techniques which will increase production in any market. If it is not, youâ€™d best make some management changes right now if you want to achieve the production to survive.
- Invest in real training. â€œTrainingâ€ is not public speaking or the computer equivalent of â€œwebinars,â€ with their inevitable flaw of â€œhere today, gone tomorrow.â€ In fact, focusing on hype-and-hustle public speaking, webinars or phone seminars when what is required is genuine training can actually reduce production, due to misdirection, shallow, and incorrect information, and time wrongly utilized.
- Consider altering intra-office split-fee arrangements. The old-style 50-50 split fee was designed for an APF (Applicant Paid Fee) market and may have some merit in a candidate-driven boom market. In a market where top-quality clients are in short supply, however, it is downright counter-productive. To motivate your people to develop additional clients, to effectively â€œwork the candidate filesâ€ and to recruit properly, consider paying them for doing so with a different split-fee ratio.
- Recognize marginal performers earlyâ€¦and take action. There is much to be said for staying with an initially questionable recruiter in a boom market. A slow or recessionary economy, however, is a very different matter, and a manager would be well advised to take a more hard-nosed approach. Your best performers will get by, given sufficient time to adjust and some effective training to reflect a different economic climate. Your marginal people, however, will not. If your market heads south, donâ€™t delay in taking appropriate action.
Editor’s note: This article appeared in a longer form in the June 2008 issue of The Fordyce Letter.