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How To Stop Your Recruitment Company Leaking Profits
Posted by Nicky Coffin
Creating turnover in a recruitment company is one thing; hey, we have all had amazing months, haven’t we?
However, achieving consistent and yet profitable growth is something entirely different.
One of the classic issues many recruitment organisations come to Centredexcellence with as they scale is feast and famine months created by Yo-Yo billings. Though it’s easy to focus on your recruiters, creating consistent profit goes much deeper than consultants that can’t bill consistently.
We live in a different business world now. We can thank a few global recessions and the internet for that.
I bet this scenario has happened to you in the past couple of weeks…
Last month I was looking for a specific type of Tree Surgeon. I jumped on Google to find the exact person I needed less than a mile from Auchenbowie, the tiny village we live in; cool isn’t it?
In fact, most of us expect to be able to do this when we are looking for a service provider or a purchase online; don’t we? Hint: That includes your candidates and clients.
Specialists are now dominating the business world.
When it comes to B2B service providers, specialists have seen huge growth.
It’s a self-fulfilling prophecy for many of us that because we can access specialists at the click of a mouse or a search on LinkedIn, that our expectations drive us to dismiss general providers and go straight for a specialist.
Getting crystal clear on your specialist niches, specifically your ideal clients and candidates, will increase your number of placements made and average fee by 50% or more and generally within 28 days; based on our clients’ results.
Remember: We pay more for specialists too; which leads me to the next element; what people are prepared to invest with you to recruit their new employees.
One of the first things we tell new clients to do is to increase their fees. Remember the definition of running a business is to make a profit!
For many recruitment business owners, their fee structure is far too low to deliver a decent service.
Setting your prices must include the untold value you add and the time it takes and then your profit on top.
Not the lowest fee you come up with because you think clients; ‘won’t pay that!’
Both Katy and I still cringe when we hear recruitment owners saying they accept 10-12% fees.
STOP! It’s time to change. You and your service are worth so much more.
Working The ‘Right’ Jobs
Not every job instruction is equal. You don’t have to take every role a client gives you. Sad to say but the golden unicorn they want doesn’t always exist!
We wrote on this exact topic a while ago which you can access in full here. The thing is it is more than possible to get your team bringing in and working on the quality jobs every time without you having to micromanagement them.
This will give you between 1 – 3+ extra placements per consultant per month. This is the exact strategy our Centredexcellence success stories use that makes all the difference to their profit month on month.
VIP Candidates Are A Hidden Profit Pillar
The sales and marketing game has changed over the years, and candidates want to know you first which then leads them to like and trust you before they say yes.
This is a good thing.
Because building great connections with candidates is a hidden gold mine for you. Offer candidates a unique service, and this will open an entirely new profit channel for you.
Picture the scene…
Through your various marketing activities, you connect with a fantastic VIP candidate, and you could place her 10x over.
Her salary is £60k, and the fee you have NOW negotiated is 22%.
What if every half of your ten consultants placed one placement like this (more than doable and we have the evidence to prove it).
You would be looking at potentially a minimum of an extra £780k on your bottom line.
Creating consistent profit is easier than most people realise. You DON’T have to change absolutely everything. A few tweaks in these areas always produces results. If you want to find out more get in touch here and put profits in the title.
Nicky and Katy
P.S. Have you completed your business health check yet? You can download it here.