How do you measure a recruitment / search firm? The profitability of a recruiter depends on how many placements they make. The longevity of a recruitment firm depends on their relationship with their clients. Their personality depends on their culture and their consultants. The true measure of success is very much a mixture of all three.
In this article, I wish to segment recruitment business by size in the current market. Each has their advantages and disadvantages. It is your decision which you would like to partner with – as a candidate, a client or your next employer.
Small Recruiter (1-5 people)
Recruitment is a matter of feast and famine for these guys. They are so busy filling roles that they may not have time to do the required business development groundwork, and thus their business is a risky mixture of peaks and troughs. There are so many of them that competition is ruthless and very few have regular clients. Communication with them is highly transactional, and unless they can see a financial return, they will often lose interest and move on to the next opportunity. It is relatively easy to earn a living wage as a small recruiter, hence why there are so many, but when you have to start paying for more than a couple of staff, the barriers to growth are significant. Their fees often undercut the market in the search for new business, and this leads to a “quick and dirty” approach to any project.
Medium Recruiter (10-50 people)
The mid-sized guys have grown organically from their SME roots. They have learned the hard lessons and built up a focussed and loyal client base. They know how to get the best out of their people, care about their development and reward them well. For them, staff retention is not an issue. They offer clients innovative recruitment solutions, unconstrained by an unwieldy process, or efficiency obsessed management. They will do whatever it takes to complete a search, and they are far less under pressure to move on to the next “meal.” Because they have earned their place at the table, they often employ the best-qualified recruiters in any given industry sector.
Large Recruiter (50+ people)
These guys have scale; they have experience handling big recruitment projects, and they fill a lot of roles for a lot of big clients. They also fail to fill lots of other roles. They are often international companies with strong internal training setups – high on process and high on efficiency. They are driven by numbers, and if you don’t hit your targets, you are out of the door. Staff turnover is, therefore, relatively high, and although they are on the PSA's of many big businesses, there will be little consistency in terms of account management. For them, candidates are just another statistic, and that cannot be good from a client’s point of view.
While this is not only about the number of people within a given business, the above generalizations can be said to ring true.
We fit very firmly in the second category. We have been built up from humble beginnings, reinvesting our profits with no external investment to the business of 40 people that we are today. We care not only about our clients, but we also care deeply about ourselves. Our culture, our staff and the way we challenge, recognise and reward is what differentiates us.
We measure value, not placements. It is important to know when our placements got their first pay rise, when they were promoted, and what that executive actually contributed to the bottom line. We track all of this for all of our candidates and clients.
We are committed to our professional life's, our brand, our beliefs, values and our culture. As far as we are concerned we go more than the extra mile. We have a strong brand because we believe in our staff, and we believe in our clients.
Happily, they believe in us too….
Further to the above:http://www.huntscanlon.com/Pages/Body/HumanCapital.aspx?topicid=13505 an interesting read: