With an average 21% YoY growth in recruitment agencies starting up in the UK, the industry is clearly still thriving. But while getting started up initially as a recruitment agency can be relatively straightforward and inexpensive to do, how do you ensure you keep growing – particularly in a competitive and oversaturated market like this one?
If you’re finding that you’re taking one step forward and three steps back when trying to scale your recruitment business, here are a few things that could be getting in the way of your business reaching its full potential.
1. You’re not ready for growth
Growing for growth’s sake doesn’t make sense for any business, and it can cause serious long-term financial damage if you’re not ready for it.
The costs of scaling your agency up from a three-man team to a six-man team then back down to three again because you weren’t ready for the stretch is extremely counter-productive and costly. A move like this can set you back years, so it’s important to only pull in manpower when you’re sure you’re 100% ready for it.
And how do you know if you’re ready? For a start, ask yourself if the timing is right (not just for your business specifically but economically too). And then look at the cash flow coming in: if you’re winning retained contracts with your clients that will secure you a steady income for the next quarter, you’ll know you have enough money in the bank to afford one or two new recruits. And make sure you have the right processes in place so that every new hire will immediately start bringing in more business, not slow things down.
If the only justification you have for growth is that you think you should be growing, you’re not ready. If your reasoning is simply that you’re losing too many placements to your competitors on a contingency basis or you’re struggling to keep up with candidate and client feedback, a good recruitment software package would be a much cheaper solution to your problem!
2. You haven’t found your niche
With almost 40,000 recruitment agencies now registered in the UK, finding your niche and owning it is the only way to stay competitive in such an overcrowded market. This specialise or die environment is something that’s happening across all industries at the moment, but it’s not a bad thing if you know how to ride the wave.
Attempting to grow as a jack-of-all-trades recruitment agency doesn’t stand you a chance against the big players, but finding your gap in the market and establishing yourself as an expert in that niche will certainly give you a fighting chance. Essentially, it’s a matter of carving out a space for your agency that will make it easy to grow in.
3. You’re not hiring the right people
And by this, we don’t mean you’re hiring bad recruiters necessarily – although we all know just how financially crippling this can be for a recruitment agency. What we mean is that too many agency owners will instantly jump into hiring more recruiters when building their agency out, or maybe they’ll hire an admin assistant to handle all the mundane tasks like data input and management.
But in reality, a good CRM should be handling the data side of things for you (and more effectively than any human could). A more intelligent hire for a recruitment agency looking to grow nowadays would be to source an experienced recruitment marketer who can focus on making your agency visible and your job ads/marketing stand out against the competition.
Then, once all the additional business begins flooding in, you can start hiring recruiters!
Content Editor-in-Chief at Firefish Software®. Editor, content manager and creative copywriter with an academic background in English Literature.