If I started a new recruitment company tomorrow, I would…

I have started several recruitment businesses, and I invest in new start-ups right now too.

But if I were to rush back into the main game, and start a business tomorrow that I intended to run, there are certain things I would do, and others I would not.

I certainly would build a business that was niche, specialised and deep in an area where talent was hard to find. Yes, hard to find. Because clients will only pay us for hard to find skills, so the idea is to become a world champion at finding talent in a niche, and go deep.

For sure I would build a strategy that delivered at least 60% of my GP from temp and contract activity. In fact 70% would be better. When my ex-Recruitment Solutions colleagues started people2people, and I invested and helped on their Board, I know I irritated them by insisting the business focus on temps, even though at the time, permanent recruitment was easy and juicy and seductive. We did Perm well, still do, but the fruits of that ‘build temp‘ strategy were fully revealed in the post-GFC downturn, when 400 plus high-margin temps generated a cushion of income that withstood a 50% drop in perm revenue.

I am not a high-volume, low-margin guy. I have spurned 100 times more PSAs than I have pitched for, and I believe the commoditisation of recruitment is a slippery slope to recruiting hell for many. So my opinions below are based on my view of the recruiting world. But I am often right, so have a read anyway

Multi–listed, contingent permanent recruitment is a mugs game. Taking a Perm brief where you are competing not only with other recruiters, but also the clients’ own internal sourcing mechanism is lunacy. And it’s degrading too. If the candidates are easy to find, it’s almost certainly work not worth doing, because the margins will be low and your fill-rate even lower. Avoid PSAs where you think volume will make up for shit margins. It hardly ever pans out.

Do recruit for clients in areas of intense skills shortages. You will have their attention when they are in talent-short pain. Trust me on that. Work with clients who treat you as a partner, and fire the game-players, users, and those who routinely disrespect what you have to offer. It’s not that hard, I promise. Liberating actually!

Maybe the very biggest of corporates are not your hunting grounds, but rather seek out SMEs without massive internal resources, tedious bureaucracy, and a smug attitude to boot.

In actual fact the temporary industry is at greater threat from technology disruptors such as Freelancer.com and Upwork, and their ilk, than most people realise. But mostly at the low-skill level, and for discrete project work. So don’t focus your agency on that work, where mass recruitment leads to low margins and sometimes high litigation risk. I know some big recruitment players make money there, but they have the scale, technology and process to make it work. Mostly, you don’t.

ABOUT THE SAVAGE TRUTH

Written by Greg Savage, The Savage Truth is a resource of insights and ideas for anyone interested in recruitment and staffing. Though his views are often controversial and contrarian, Greg Savage is a sought-after speaker and presenter and is regularly asked to comment on the industry, its challenges and its future.

Focus on the professional contract market, where the ‘career contractor’ exists. The person you can actually build a relationship with. Where the contractor sees you as her employer, and values your service. Work in areas where assignments are long, skills are rare, and tasks are complex. This kind of temp recruitment requires recruiters with talent relationships, deep networks, great skills in the ‘craft’ of recruitment, and longevity in the market place.

Technology can’t replace that.

The Agency recruitment industry has massive opportunities. But unlike the past where you could make money just about anywhere, doing just about anything, now we have to be strategic and razor sharp in both focus and implementation.