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Why Most Smaller Recruitment Agencies will Struggle to Survive in their Business.

Many smaller size recruitment agencies that have fewer than 10-15 people will feel not so comfortable reading what I am going to write.

However, if you are one of them, do read what follows below with an open mind and perhaps you will be able to get something good out of it.

The reasons why recruitment agencies struggle in their business are as follows:

1) Lack of positioning

Not able to stand out from the rest of the competitors. Well, it is a very easy decision from the client’s point of view. If you are considered to be one of them, you will be treated like one of them; and what happens is 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 extent that 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 figures might not be great. In addition, your costs could go up too. Hence, giving a price reduction might not be a great idea. Somehow it actually lowers your “GRADE.”

3) Pay no attention to branding 

Well, even if you are a small player in the market, you will need to have a GREAT logo, a GREAT website, a GREAT tagline, a GREAT business card, and GREAT salesmen. If you are not putting money into these areas, you will, perhaps, be able to make some money; but 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 you know how to do it.

4) Lack of a certain skill-set 

Let us face the facts, when you open up a business, you do believe that you will have good sales because you take reference from someone or some experience that you have chosen a good industry to work in. But all hell breaks loose when you start the business; suddenly you need to manage the operation, sales, marketing, recruiting, HR, payroll, accounts, etc. My point is this: are you being trained to do all the things above? Most likely not. The question is that if one does not have sufficient skill, can they do things efficiently? It is a straight NO. Hence, what you need to do is to delegate the work to people who are good at it, handle the job you are best in, and focus all your time on something that you are very good at.

5) Unsure about the Market Tumor 

I explained about the Market Tumor in a previous article and touched base on the potency of the tumor from three groups. The basic idea is that clients do not give you exclusivity, and you might have to work very hard on many assignments and still not be able to close.

Many agencies, including top headhunting companies are also facing the same problem. (Just to name a few are Robert Walters, Hays, and other HUGE players) How do I know about it? Simple. By using 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.  

There are solutions to the problems above and if you were to put some effort into solving these problems, you will definitely stand out from the rest and make it in the recruitment agency industry. Cheers, and good luck.

Dougles Chan – The Recruitment Guru

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