Most recruitment agencies have now positioned themselves for survival from the economic impact of the pandemic. Staff numbers and other costs may have been reduced, new structures and protocols implemented for working away from the office, clients are doing online interviews, and serious analysis has been undertaken for revenue streams and cash flows to ensure survival over the next few months.
Each day requires attention to the engagement and enthusiasm of staff that are undertaking important activities. And leaders know that a return to “normal” seems a long way away or may never fully be seen again.
What now? It is inevitable that growth will reappear. It is time to focus on reshaping your business to enable it to be the best it can be when that occurs.
"Never let a good crisis go to waste" is a quote well used in discussions currently – this quote is believed to be based on a 1970’s book by Saul Alinsky "in the arena of action, a threat or a crisis becomes almost a precondition to communication". Moving away from activists, another version of this applies to the medical fraternity - using a medical crisis to improve a broader set of conditions (e.g. alcohol consumption or weight) rather than just the current medical condition.
Recruitment agency owners and managers will never have a better time to unshackle themselves from the structures and conditions they have endured for the past decade and reimagine the business they want to lead into the future. You have the time and your staff are very attentive.
Have you been listening to your clients and offering them the solutions they want? Have you been building a business that places the health of the business at its centre? Do you have policies and procedures in place because “that’s the way we’ve always done things around here?”
If each owner and manager paused to reflect deeply on the issues of their business that are impediments for what they would like to achieve then there would be a wide variety of topics for discussion.
I have chosen three topics that have been part of my discussions over the past few weeks.
1: 360-degree recruitment and commission structures
It is a source of frustration to HHMC that commission structures are so embedded within recruitment agencies that it inhibits work practices and unduly influences culture.
A commission structure in other industries is reserved for those that win new clients or new projects. Those that execute assignments are rewarded in other ways.
A commission structure is not meant to be so universal that it dictates hiring policy and work arrangements. Do you want your whole to team undertaking new sales activity? Do you want your whole team working individual assignments on a 360-degree basis? That is not what many clients are seeking and that is reflected in their procurement processes. How many excellent recruiters have not been hired by your organisation because of the sales focus?
For many organisations, a revision of commissions and work practices has been off-limits for the past decade. There has been a severe shortage of staff and nothing was done to upset the status-quo. All of that has obviously changed. Now is the time to rethink, with your staff’s involvement, the solutions you offer, and the relative roles and responsibilities needed to deliver those solutions.
The practices developed will need to be more agile and risk aware than those that have been in place in the past, such as paying commissions for job-filling positions.
2: Corporate structures and Balance Sheets
Shareholders often end up in an unintended position with the structure of the company, the ownership of shares, and items that are on the balance sheet such as non-productive assets or loans.
This can have a major impact when it is time for a shareholder to depart, or staff be offered shares, or the company be sold.
Changing these takes time and has a financial cost, especially with rampant state-based stamp duty.
Today the value of many assets, including the value of recruitment agencies, is lower than at any time recently and hopefully lower than it will be in the future. Now can be a beneficial time to make changes to corporate structures and to address balance sheet items.
3: Outsourcing and Technology
Owners and Managers have, in many cases, had a quick lesson in remote operations. Setting up a business for remote work during the pandemic has been a stress test for technology and processes that need to handle change.
Technology needs to be accessible, integrated and cost-effective. It would be a tough period to have core software running from a server under the desk. Recent work by Staffing Industry Analysts on the Recruitment Agency Tech Stack gives guidance on the strategy to adopt for your business.
Similarly, many organisations have found their processes are not as flexible or cost effective as assumed when business drops dramatically. Support processes, such as HR, marketing and even payroll and accounting, can be difficult to sustain and justify if the size of the business changes rapidly.
Outsourcing is a proven model. It should bring cost benefits (or why would you do it), expertise from specialists, and flexibility to grow and shrink that cannot be repeated with a full in-house team. Again, now is a beneficial time to be considering what processes are essential to hold within your organisation, and what processes are open to an outsourcing investigation.
There will never be a better time to question the practices of one decade or two decades ago. Do it now, with urgency, and engage your team in the process.