From Shortlist October 2021, Captain’s Table Meeting Presenters.
While top-tier agencies are taking a “hybrid approach” to talent sourcing, many are still failing to maximise readily available tech capabilities, says JobAdder CEO Martin Herbst.
He notes the biggest challenge currently facing the industry is sourcing quality candidates, combined with dwindling applications per job and rising pressure on days to place, particularly in the perm space.
By taking a hybrid approach, top recruitment companies are focusing on talent pooling, and leveraging databases and networks, he told a recent Captain’s Table forum hosted by Navigator Consulting.
“You’re also doing proactive searching, because you’re just not getting the applications that would typically come through the job boards.”
While leading agencies are taking this approach, it’s not widespread across the industry, says Herbst.
JobAdder’s internal metrics indicate that overall engagement with some features, such as leveraging databases, working with candidate data, and reaching out to candidates using CRM capabilities, is “below what [it] should be”.
“Perhaps it’s just because a lot of consultants are just trying to keep up and not taking the extra time to invest in that.”
Escalating BD activity
Another key differentiator of market-leading firms is their current focus on business development, says Herbst.
“The best recruitment firms are of course staying on top of the current jobs and assignments they have at the moment, but how are they being smart about going after companies who are really in need of support?
“It’s a very smart, strategic way they can add value because… things may be great right now, but there’s always a flip side to this.”
Regardless of when the market turns, he says it’s critical to build a business development pipeline, and this can be done by targeting companies that are in a hiring drive and could benefit from extra help.
Fellow event panellist and William Buck director Cameron Martin agrees, adding that another avenue for business development is to grow the contracting or temp division.
With the workforce now prioritising flexibility, it’s likely that a portion of them will seek out contracted roles, he says.
Expanding that side of business also has long-term financial benefits, Martin adds. “When we help clients sell their businesses, potentially that temp recruitment part of the business is going to be worth a lot more than the perm.”
Contracting adds value to the business because it covers fixed costs per month, and tends to lead to a better valuation when selling, he says.
“Someone buying then has that stability of that income and they know it’s there, whereas perm can be potentially a bit up and down depending on the quality and the efforts of your consultants at the time.”
But agencies that are growing temp desks and increasing sales quickly need to put a structure in place early, backed by an automated tech stack, to ensure that they are getting paid, says APositive CEO Danny Marlow.
“At the end of the day as you’re growing your sales, and we’re talking about the front-end opportunity, you have to make sure you’re getting paid too.”
And “be careful of who you’re dealing with”, he warns.
“When COVID hit, your bad debt risk was pretty easy to pick – you knew not to deal with hospitality pretty quickly. Nowadays it’s a little bit more ‘grey’.
“You’re not quite sure where the holes in the economy or the cashflow is going to be, so you don’t want to give your customers any opportunity to get out of paying your invoices.”
He recommends ensuring terms of business and sign-off processes are “really tight” to ensure invoices are legally enforceable and will stand up in court.