Almost daily, I receive calls and e-mails from Owners and Managers who express a desire to change their area of specialization or to add areas of specialization. In most instances, they are somewhat uncertain as to the process they should follow in making their selection.
Without getting into the myriad of issues related to whether or not a firm (or individual) should, in fact, change their area of specialization, there are certain factors that should be considered before making a change.
First, what do you wish to accomplish with your business? Are you focused on growing your firm, protecting your assets, retaining your staff, positioning for the future sale of your business or all of these? You need to know your reasons for change; otherwise you’re just changing for the sake of change.
Many times Owners, Managers and Practitioners tell me they want to migrate from a declining market to a growth area. Although, in some cases this is necessary, in many others they merely wish to move from one area of “low hanging fruit” to another (See TFL – 05/99 – “Beware of the Low Hanging Fruit”). That’s fine if their long-term goal is to have a commodity based business, which typically is what happens when firms continually chase the “hot” areas and never settle into a specialty where they can truly develop long-term client relationships.
If your goal is to have a growth business with strong client loyalty, you have to differentiate yourself on a qualitative basis and this has little to do with your area of specialization.
Ask yourself, why do I want to change (or add) specializations? A proper answer to this question will lead you to consider other decisions that need to be made in this process.
As a general rule, the more focused the specialty, the broader the geography. As an example, if you decide to only place design engineers with toy manufacturers, you will most likely have to work a national market. In comparison, if you choose to focus on accounting/ finance (a broad specialization), in most instances, you should be able to sustain your specialization on a local basis.
Therefore, desired geography plays a major role in selecting specializations, particularly if you wish to focus your business locally. Working a local market allows you the opportunity to meet your clients on a face-to-face basis. When surveyed on this subject, most practitioners considered that to be a major advantage. Nevertheless, there are many in our industry who work national markets successfully and rarely, if ever meet their clients.
Specializations come in all shapes, sizes and combinations including:
– All positions within a specific industry.
– Specific positions within specific industries.
– Specific positions across industries.
– Level of positions within or across industries.
– Level of relationships you wish to develop with your clients.
– Size of potential client companies.
– Whether the potential clients are public or privately held.
Very importantly, you need to review your business model in the context of a potentially new specialization. A business approach that may work well in one specialty may be counter-productive when applied in a different specialty. As an example, recruiting Sales Representatives on a national basis is quite different than recruiting Engineers for a local market.
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In making the decision on a new area of specialization you should also consider your current resources including:
– Which specializations are best known to you or hold the greatest interest? Is that interest based on valid criteria?
– Have you completed a properly constructed market survey of the specialization? (This is extremely important regardless of the specialization)
– Where do you already have established contacts?
– How about your database? Do you have a ready supply of qualified candidates for your new specialization?
– Is there a possibility of expanding specializations within your current client base?
– Finally, determine who the top Recruiters are in that specialty and contact them asking for their input regarding the specialty. Some may not be responsive, as they will view you as potential competition. However, others could very well provide you with a wealth of useful information and resource material.
Under ideal circumstances, a specialty should be selected because you have knowledge (or can quickly develop it) of the specialization; demand for qualified employees outstrips the available supply; you have an identifiable source for both potential clients and candidates; and most importantly, you will be able to quickly differentiate yourself on a qualitative basis from the competition that already exists in the specialty area. This is the ideal.
When your ideal area of specialization (or as close to it as possible) matches your operating model and will provide you an avenue to achieve your business objectives, you have identified the right area for specialization.
Finally, in order to successfully develop a new area of specialization, you need to commit the necessary financial assets and staff resources required to do it properly. Making certain you’re prepared to “stay the course” in developing the new area of specialization will help insure your ultimate success.
As usual, if you have questions or comments, just give me a call or drop me an email. It’s always good to hear from you.
Terry Petra is one of our industry’s leading trainers and consultants. He has successfully conducted in-house programs for hundreds of search, placement, temporary staffing firms and industry groups across the U.S., Canada, Mexico, Australia, New Zealand, Russia, England, and South Africa. To learn more about his training products and services, including “PETRA ON CALL,” visit his web site at: www.tpetra.com. Terry can be reached at (651) 738-8561 or e-mail him at: Terry@tpetra.com.