“Agency recruitment is not dying. In fact it’s thriving. But not for everyone! The winners will be the modern recruiters who evolve, re-tool, up-skill and re-invent. The rate of change in recruitment means the landscape is littered with yesterday’s heroes.” Greg Savage, 24 May 2016
It’s nearly three years since Greg Savage posted his “yesterday’s hero” video. In the video Greg outlines the various actions, or inactions, of the individual recruiter who was once successful but is now fast becoming much less successful. It’s excellent and I highly recommend you watch it, or re-watch it.
In the video Greg speaks to individual recruiters.
Implicit in the video is the contribution that the agency culture makes to the actions of “yesterday’s hero”.
The agency culture is determined and shaped, either actively or inactively and for better or for worse, by the agency owner.
What are the actions, or inactions, of the agency owners whose recruiters fit the definition of “yesterday’s heroes”?
I have had conversations with many small agency owners over the past 12 months. I have also analysed the financial performance of larger agencies whose results have been published. Both of these data gathering exercises have revealed, to me at least, a clear pattern of early warning signs that the fundamental health of a recruitment agency is under threat, even if the symptoms are barely apparent, if at all.
It is absolutely clear to me that the single most important indicator that an agency is heading towards profitless growth or worse is:
Productivity metrics are not generated, reviewed or acted upon: Productivity is a topic I have written endlessly about for more than a decade (this blog is an updated version of the original consultant productivity blog I published in July 2008).
Whether it’s time-wasting clients, overworking jobs, source of quality candidates, candidates interviews being a dud KPI giving away temp-to-perm fees or even not wasting time with candidate conversations that are more effectively handled with written resources I have been relentless in bashing the productivity drum on this blog.
Don’t take my word for it; Andrew Banks says exactly the same thing.
Most agency owners know that there’s a lot of time and money being wasted by their consultants but without a focus on the key productivity stats they don’t know exactly how much waste there is and what needs to change.
Other signs of an owner presiding over a slide into the land of yesterday’s hero are:
- Training is ad hoc and focused on rookies and underperformers rather than driving a culture of ongoing professional development that raises standards across the whole company. (read my 2013 blog here)
- Billings are more important than stated cultural standards. (read my 2018 blog here )
- PSAs are pitched for without a careful and objective review of all costs, including opportunity costs. (Read my 2010 blog here)
- High consultant turnover is regarded as normal
- Average fees and margins are declining, rather than increasing
- No active marketing strategy exists (Read my 2012 blog here)
None of; past successes, longevity in the market, brand recognition or historical profits provide guarantees of future profits. Without a decent profit you have no spare cash to reinvest in the business. Don’t wait until your accountant or banker tells you things are not great; you need to know a problem is on the horizon six months before it arrives in order to take pre-emptive action.
The good news for all agency owners, especially for those whose businesses are underperforming, is the functionality of today’s recruitment databases enable you to generate important productivity statistics with relative ease (certainly compared to the days when I was running a desk).
Recruitment-specific vendors such as Cube 19 and Recruiter Insider (note: I have no commercial interest in, or affiliate relationship with, either company) both provide excellent real-time insights into exactly where the greatest productivity improvement opportunities reside.
Your interest in generating, reviewing and acting upon your consultants’ individual and aggregated productivity data will be a critical factor in determining whether your agency thrives or quickly becomes yesterday’s hero.