This month Rod Hore of HHMC and Dianne Gibert of Certex International have put their heads together to discuss the topic of Management and Leadership and issues they see in the Recruitment Industry.
The recruitment industry still has low barriers to entry, although this is slowly changing. Small businesses dominate the recruitment industry and are likely to dominate for some time yet. Every day there are new companies being formed and entrepreneurs are investing their energy and funds so that they can be successful.
In 2009-10 Small businesses in Australia (1 to 19 staff) provided nearly half of the employment in Australia and accounted for over 40% of the services industries. Small businesses account for over 95% of the total businesses in Australia. And about 15% of small businesses close each year. Key Statistics Australian Small Business, Department of Innovation, Industry, Science and Research, 2011.
With these statistics you would think that Australia would be a mature environment for the development of individuals with the skills and experience needed to commence a new business and make it successful. It’s not. New business start-ups often struggle with a lack of skills and experience and a lack of external support.
Fortunately the recruitment industry associations are providing more and more products and services that can help get new businesses started and operating successfully. Services include building effective leadership and managing for success, and products to keep the new business owner performing in a legally compliant manner.
Effective leadership and strategic management is a key requirement. One of the major issues we find in our interaction with companies across Australia and New Zealand is the lack of awareness that business owners have of their business. There is often a stubborn belief that what worked previously will work now and will continue to work tomorrow. There is often a belief that what worked when a consultant was at a multinational company will now work when a leader in a new small business. A better perspective is needed if the business is to survive the challenges of competition, industry changes and economic conditions.
Strategy is becoming a more critical issue for leaders in the recruitment industry. Listen to any presentation within the industry and it is all about change – clients are filling the easier jobs, RPO’s are preventing access to hiring managers, margins are getting squeezed, social media strategies are required, technology expectations have never been higher, consultants are harder to find, and processes are more difficult to execute profitably.
Today’s leader needs to have a very clear vision and strategy about what business they are going to be in the near future and they need to have the skills to build that business. Consider this – whatever your business was doing before the GFC has most likely had significant changes today; whatever you are doing today is unlikely to be what your customers want from you in the next two years.
An External Review is often the best way for a business leader to analyse their business with clarity and to understand risk. An external review should be able to clearly question all aspects of the business – strategy, leadership, clients, competition, marketing, sales, processes, financial management – everything.
Too often leaders are so passionate about their business they have difficulty objectively reviewing where their business is today and what might need to be done to provide success in the future. Risk analysis and exposure to industry trends is a valuable check for a leader – as long as the leader is open to new concepts and can objectively debate them. With rapid evolution occurring in the recruitment industry today, leaders are more often being asked to “bet the business” with key decisions.
Quality Processes don’t go out of fashion. Especially in a changing industry, defined processes used by engaged staff are one of key the success factors for winning and delivering products and services to meet customers’ expectations.
The industry associations have partnered with Certex International to advise, review, audit and certify processes in a manner that is relevant to the industry. For a small investment, leaders can understand strengths, weaknesses and gaps in their processes and work efficiently to rectify issues. Importantly, certification is a badge for your company to stand out when bidding for work.
Performance Measurement is another business attribute that has been around for a long time but really gains benefit when the industry is in a state of change. As a leader you must know the relative performance of your team and your organisation against your peers to understand what is working and what needs attention. Performance and efficiency measurement is so much more than sales and commission – it is all aspects of the business. And “average” is not a sufficient goal. The RIB Report provides a sophisticated analysis of your business in a simple and timely process.
Today it is a critical requirement to understand clearly the costs of executing your recruitment processes so that you can have a continuous improvement culture and you can clearly and profitably bid for work. If a client only wants a portion of the recruitment process, or you are bidding for a lower-cost supplier agreement, clearly understanding costs and performance metrics is essential.
We all see recruitment agencies promoting top level consultants to leadership roles, and we all see top level consultants heading off to commence their own business. “The characteristics of a good salesperson are money motivated, large ego, and a bit selfish. These are the opposite of what a sales manager should be.” Greta Schulz, Schulz Sales Consulting.
Too often we see the “top consultant” characteristics being applied by the leaders of smaller recruitment agencies. This is not a recipe for success.
In the 1950’s leadership was defined by Cattell in his Leadership Potential equation as having the following traits: Emotional Stability; Dominance; Enthusiasm; Contentiousness; Social boldness; Tough-mindedness; Self Assurance; Compulsiveness.
While this might still apply, today leadership is most often defined as possessing traits that help motivate others, envisage the future and convince others that their vision is worth following. Additional leadership traits therefore are: High energy; Intuitiveness; Maturity; Team Orientation; Empathy; Charisma.
An assessment of leadership potential would be a rational process for many of today’s and tomorrow’s recruitment industry leaders to undertake so that they have a clear understanding of their capabilities for the demands of the future.
All businesses commence with a vision of what they plan to achieve but over time that vision can become less clear. Do your current management strategies and leadership plans support your vision? HHMC often works with agencies to provide external review and help align their vision and strategy to ensure they are realistic and achievable. Then agency value can be maximised.
Vision, strategy, management and leadership – nothing new here! But these are essential actions and capabilities for small recruitment agencies to enable survival in this stimulating and changing industry.
Originally Published in Recruitment Extra October 2012