6 Reasons Recruitment Agencies Struggle to Grow
With low barriers to entry and not many overheads, around 700 new recruitment firms register a month in the UK with Companies House.
However, only about 20 percent of new businesses manage to get above ten heads and continue on successful growth trajectories which tells us that growing and scaling is the hard part.
It’s easy to assume that as long as you can keep interviewing candidates and putting them into the right companies, then your business will grow; except it’s never quite that simple. As more clients come on board, and more candidates are interviewed, the urgent need for process and structure, systems and culture all begin to creep in and suddenly, it’s a completely different beast and you’re wondering why you can’t scale up.
If you’re suffering growing pains, here’s some reasons why you might be struggling, and some ideas for how to overcome them.
1. Trying to recruit too widely
Identify your speciality and then stick to it like glue.
If you recruit for hospitality roles, but then come across a finance professional you know you could place, don’t do it. Although it’s tempting to step outside of your niche and grab the easy win, it will distract you and take you away from your vertical meaning you will be less productive in the long run.
Stick to your arena and build within it. Once you deviate, you’ll find it easy to do it again and again, until suddenly, you’re all over the place, recruiting anyone and everyone and a master of none. Remember, recruitment growth can't be achieved if you are spread too thinly.
2. No mission or vision
Often people think your mission and vision, as well as your values, are nothing but a marketing exercise, something that needs to be done for the sake of the website. However, your vision should be far more than just lip service, acting as the rallying cry your employees take up and work towards. It gives focus and direction, as well as purpose to your employees. In short, it keeps everyone walking together in the same direction. Give your people a clear direction and belief system to ensure you’re constantly moving forwards.
3. Uncomfortable culture
If trends in business have taught us anything recently, it’s that culture is so very important to the success of your organization and if your culture is uncomfortable, unethical or not in keeping with the people in the business, it can become jarring and very difficult to move forward.
A negative culture becomes toxic very quickly and drives people away and out of your agency. This might be anything from not having meetings when they’re scheduled to negative comments from toxic talent or lack of accountability.
4. No process
A lack of processes or systems in the early days will only get you so far. The right structure for hiring, compliance, candidate screening, and payroll needs to be threaded throughout your business so you’re building on strong foundations.
Adopt software to support back-office processes, and where possible integrate with your recruitment CRM for better efficiencies. As a smaller business, outsourcing your pay and bill function to an experienced provider will probably make sense.
A lack of defined process and consistency when it comes to client and candidate experience and engagement can prevent growth.
Small consistencies equal marginal gains as time and placement activity builds.
5. Lack of technology
With increasingly strong legislation and compliance laws, the right technology is imperative to underpin growth and to protect yourself. A recruitment CRM should make your workflows easier and your consultants more efficient as your candidate and client database starts to grow. With an increasingly remote workforce having cloud-based recruitment technology is paramount giving you peace of mind about data security and better visibility of information for your whole team.
Have you also thought about your digital presence as a whole? Your website is the signpost to attracting candidates looking for work and clients looking for a trusted agency. Volcanic's websites are designed specifically for growing recruitment agencies globally just like yours. Why invest in job boards when your website can do so much more and with reporting at your fingertips, it's more efficient too.
There is a direct correlation between implementing recruitment technology and building your recruitment business.
6. Poor candidate experience
As your agency starts to grow it becomes harder to offer a personalised service to every candidate that registers. However, bad experience spreads like wildfire and can really damage your business's reputation, which in turn will impact your growth. You should be able to automate some responses via your website or recruitment CRM to help manage candidate expectations. And of course, once candidates have engaged in interviews you should endeavour to provide timely and constructive feedback.
Meanwhile, a regular dialogue with your temporary and contract workers will help identify any potential issues, as well as keep you abreast of what is happening with their assignment. Candidate retention is key in order to provide more consistent levels of service to your clients.
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