Agency Recruitment. Five Brutal Truths.

Recruitment agencies must move with lightning speed to stay ‘recession-fit’, but also agile enough to take advantage of an upturn.

Precisely the same applies to individual recruiters.

Laggards and dinosaurs won’t make it. It’s as simple as that.

Here are the five big brutal truths agencies must tackle, with pace, persistence and courage. Also, ideas of what to do about them.

1. Client volatility is a certainty.

Plan for a W-curved recovery. Things start to improve, then a re-occurrence of the virus sees regular new lockdowns. Stop, start. Repeat. Clients will have little visibility to set new longer-term budgets and to commit to a long-term stable hiring plan. Confidence will be up and down like a yo-yo. Actions to take:

Commit to agility: Agility and speed are the keys. McKinsey & Company: “Being on the fastest trajectory matters more than having a great plan, because plans become quickly outdated.” As change hits, ask: “How does our plan change now?” And change it

‘Plan-Ahead Team’: Put equal effort now into planning as you are into short-term business survival. Have a team driving planning around Pleasing existing clients, Product, People, Pricing, Process, Profile, Pipeline, Profitability.

Quarterly Sprints: Plans will be out-of-date quickly. Regroup quarterly to ‘start again’- to reshape and prioritise the next 100 days. Focus on shorter-term goals and decision points. The focus of the 100-day plan may be the polar opposite of the previous 100-day plan. That’s not inconsistency. That’s agility

2. Clients will be ROI-obsessed

Good times breed fluffy ‘nice-to-haves.’ (Remember those?) Recessions see every dollar put through the ‘value’ wringer. Actions to take:

Speak their language: Get deeply connected to client KPIs. Know their language to describe their recession strategy. Cast everything you propose in that language. If your client is a CFO fixated by ‘process improvement and efficiencies’ thinking, link everything you do to adding value to that funnel.

Obsess about their results: It’s always your first question: “How are sales?” Keep probing. What’s working. What’s not. Bring competitor insights and ideas on how to out-gun. Your clients are desperate for market intelligence. Who is doing what? What’s working? Show you are sweating what they are sweating. That leads on to what people and skills they need to help.

Get ‘the narrative’ right: You need a persuasive point of view. A powerful narrative. About how clients and candidates can respond to short-term challenges. And a clear, persuasive point-of-view about the future. We need clear, smart ideas and thinking about what our clients and candidates are facing, and what they need to do. As a recruitment leader, you have to set the tone from now on. With a straightforward positive ‘story’ about how we will get through this, and thrive the other side. I am not talking about ‘spin’. Or some superficial flim-flam. Definitely no BS. I am talking about an authentic point of view that points the way. Your ‘chat’ with clients must be razor-sharp: how maintaining spend will deliver fast sales gains; how ‘Bad Costs’ (e.g., fancy property) should be cut, and ‘Good Costs’ (e.g., spend on good people) maintained. Persuade. Influence. Don’t ‘sell.’

Measure everything: Set (conservatively aggressive) KPIs for all your strategies. Less ‘gut’, more data. Regularly ‘report back’ on results. Claim it. Be brave. Act bigger than you are.

3. Expect vicious price competition as clients ‘de-risk’ spend.

Recessions bring relentless downward pressure on prices and costs. Clients are frequently under the cosh to cut cost, to get more for less. Risk-aversion permeates spending decision-making.

Your competitors will be desperate. They’ll undercut. Lower operating costs to keep a competitive advantage. Whenever possible, maintain prices, and add more value. For clients, though, ‘lower-cost’ and higher value is Nirvana. Actions to take:

De-risk engaging your agency: Become easier to use. Propose short-term projects fees. Sell contract and temp if it suits. Develop fixed-price products for drudge work like screening and reference checking if appropriate. Offer ‘Recruit now. Pay later’ structures, such as this one from market leader APAY (Australia and NZ) Keep competitors out. Scrap hard.

Run towards the ‘Exclusivity/Retainer’ fire: We are desperate for work. But quality work is what will get us through this and make us fly when the market comes back. Go hard for exclusivity. For appropriate roles pitch retainers. Learn the skills. Commitment is what we want. Here. Here. And here.

Lower your fixed cost base: ‘Frugality rules.’ Cut all flab. Be lean. Move quickly, as much as possible, to a ‘lower fixed, higher variable’ cost structure. Compensation is around 65% of most agency’s costs. Pre-COVID salaries have enjoyed a decade of ‘good times’ creep. Reshape base salaries, yours included, for the long-haul. Refresh roles when they open up with less expensive talent from the eager, large pool now available. Add flexible compensation options (I will write a blog on post-COVID commission, so watch out for that)).

Measure real-time productivity: In fact, reinvent the definition of ‘productivity. Lift the measurement, not drop it. Reinvent KPIs. Shape them for each individual. Measure selling, not spamming. Reward the outcome
Everyone has daily goals that are achievable and continually evolving, depending on the need. Manage performance with a laser-like focus. (This is what you need to do). Pivot and shift constantly.

4. Existing clients are the route to agency salvation.

Keeping and growing revenues from existing clients is the life-line of recession survival. You’re proven, ‘procurement-approved’ and on-board. Don’t blow it. Become indispensable. Actions to take:

Become client obsessed: Speak their language, focus on gritty commercial outcomes, get your narrative right, prove ROI at every step.

Flex, Fix or Freeze:  Mark Ritson identifies three client categories: Flex (doing well), Fix (scrambling to keep revenues healthy), and Freeze (hibernating). Where do your clients sit? What does that mean for communications and resources you allocate?

Be ‘energisers’: Be the most energising people in client’s business lives: passionate about their success. Clients must leave time spent with us inspired, with a spring in their step, and a lightness of spirit. Be dealers in hope.

5. Good things come to those who are ‘visible’.

‘Visibility’ drives agency success during downturns. I don’t like the word ‘hustle’ but some use it. Energy, determination, persistence, commitment. Recessions are tough. Don’t get bitter. Get better!

Conditions perfect for a land grab: The opportunity to grab market share is enormous once the Twilight Zone of WFH eases. Clients will want fresh thinking, efficiency, certainty, ease-of-relationship. Some will look to consolidate with fewer agencies. Defend hard. Grab what you can. Be ready. Refresh narrative, credentials, marketing materials.

Innovation: small steps of progress: Review your products, processes, pricing, client service, promotion. Task an Innovation Team to get done an ‘idea a month’ that adds relevant ‘new’ to the agency. Your offer will quickly be more competitive.

Sharpen the saw: Use this time to reshape your team. ‘A’ grade talent might now be now affordably available. With current staff, create the opportunity to learn new skills or deepening specialisation. Safeguard jobs. But do not tolerate passengers.

Drive profile that matters: Stay vibrantly top-of-mind. Develop points-of-view linked to issues clients care about. Lift profile through webinars, social media, trade press, direct presentations. Hard to believe, but marketing works!

Plump up your pipeline: You have a one in four chance to win work from dormant clients, even if they fired you. Check all invoices sent during the past five years. Who do you no longer work with? Where are those executives now? Reconnect. Share something of value. Good things will happen.

Cash is king, and queen: Cashflow is everything. Do whatever you can to build your cash reserves. Seek additional credit (if you can).

Lead from the front: Lead by example, every day. Teams working through adversity create powerful bonds, a winning spirit and do special things. This ‘mystical power of we,’ the magic created working together to get an agency and staff safely through the rapids, is unforgettable. It all starts with energised, creative, adaptive and client-value obsessed leadership.

In summary, recessions lead to recovery.

Agencies which move fast to tackle the right priorities with courage can survive and thrive. Fortune favours the brave. Go hard. Be bold. Get a little mongrel. Now is the time.

Many ideas in this blog came from Chris Savage. And when I say ‘many ideas’, I mean ‘most ideas’.

Obviously I improved on his scribblings but to fair, this is mostly his.

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