Why Smaller Recruitment Agencies will Struggle to Survive in their Business

Many smaller recruitment agencies who are less than 5-10 recruitment consultants will feel not so comfortable reading what I am going to write but if you are one of them, do read the following below with an open mind and perhaps you will be able to get some good juice out from it.

The reasons why recruitment agencies will struggle in their business are because of the following:

1)      Lack of positioning – Not able to stand out from the rest of the competitors, well it is simply a very easy decision from the client point of view, if you are considering to be one of them, you will be treated like one of them and what happen to them are that they do not get the business. Period. Sorry but this is how it works.

2)      Compete based on pricing – you may think that by having a lower price, more people will give you the business. Yes it is true to a certain aspect if you draw the line in the demand and supply curve where you change your pricing you will have some additional business.

However the truth is that you might have more sales numbers, but your overall sales figure might not be interesting. In addition, your cost could go up too. Hence giving a price reduction might not be a great idea. Somehow it actually lowers your “Standard.” I would advise you to have lesser clients, better pricing and still able to make more sales as a whole. 

3)      Pay no attention to branding – Well, even if you are the small player in the market, you will need to have a GREAT logo, GREAT website, GREAT Tagline, GREAT business card and GREAT salesmen. If you are not putting money into this area, you perhaps able to make some money and those who make the extra effort will make the most money.

Trust me on this.

This is how the world perceives you, you are what you wear, your logo, tagline, website, business card and salesmen represent who you are and determine whether the client would want to do business with you. It is not expensive to have the entire list above if and only you know how to do it.

4)      Lack of certain skill-set – Let us face a truthful fact, when you open up the business, you do believe that you will have good sales because you take reference from someone or some experience that this is a good industry to work on.

But all hell breaks loose when you start the business, you will need to manage the operation, sales, marketing, recruiting, HR, payroll, accounts etc..etc…etc…My point is this, are you being trained to do all the things above, most likely not.

The fact is that if one does not have the sufficient skill, can they do the things efficiently? It is a straight –NO.

Hence what you need to do is to delegate the work to people who are good in it, handle the job you are best in and focus all your time in something that you are very good in.

5)      Unsure about the Market Tumour – I had explained about the market tumour in my previous article before and touch base on the potency of the tumor from 3 groups.

The basic idea is that clients do not give you’re the exclusively and you might have to work very hard on many assignments and still not able to close. Many agencies, including the top recruitment agencies, are also facing the same problem. (Just to name a few that I spotted are Robert Walters, Hays and other HUGE players)

How do I know about it, simple, by doing a simple tracking method I am able to see who are the agencies that are working on the assignments and I can also see who the client is. That’s how deadly my techniques can be. Anyhow if you still do not know what the market tumour is, do take a look over here: The Market Tumour Explains.

Definitely, there are solutions to the problems above and if you were to put effort to solve the problems above, definitely you will stand out from the rest and make it in the recruitment agency industry. Cheers and good luck.

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