2023 has proven to be a challenging year for business growth, marked by a seven-year high in business insolvencies. As the economy has squeezed, companies across all sectors have had to take cost-cutting measures, including tech giants like Facebook, Google, and X [formerly known as Twitter], who have been forced to downsize their workforce on a global scale.
The uncertainty surrounding major infrastructure projects such as HS2, has furthered the negative repercussions throughout the whole supply chain. Notably, the last 18 months have seen significant increases in interest rates, and as a result, supplier costs across various industries have skyrocketed, including recruitment staples such as job boards!
This challenging environment has made survival a daunting task for many businesses. However, there are encouraging indicators that suggest the situation may not deteriorate any further – inflation is slowing, interest rates are broadly recognised to have peaked and there are signs that cuts in the job market have left many companies with a very lean workforce and anticipating headcount increases sooner rather than later.
Times like these are often when opportunities start to present themselves, so now is the time to jockey for the best position ahead of any bounce back! Here are four tips to help recruiters navigate the uncertainty and emerge stronger and more resilient in 2024...
1. Be equipped to supply contractors
Contract business tends to remain resilient in challenging times within the recruitment industry. Hybrid recruiters may have observed that their contract revenue has actually fared better compared to permanent placements this year.
I would expect as we slowly come out of a tough period that contract will lead the way. Companies will be more cautious about increases in new business and they may well have explored opportunities a little outside of their usual core skillset, requiring short-term specialist skills. With either scenario, a common reaction is to hire specialist contractors to deliver immediate projects and then start to strategically build these roles' perm headcount as market confidence grows.
Dynamic recruiters should have a close eye on triggers that will strain a lean workforce among their clients – new projects, shelved projects coming back on, and positive data relating to buying patterns for their products or services.
As well as actively looking for new opportunities, it is essential to make sure you have the capability to deliver the supply of contractors straight away.
2. Understand your niche
If you have had a tough year, it may be tempting to diversify into other areas. In recruitment, there is really no such thing as an untapped market, so by moving horizontally in tough times it is likely that you will enter a market that is already crowded and with people who have more experience and capability than you.
Recruiters from any field can recognise that their expertise and knowledge of their field is a key U.S.P. Markets do come and go, but you should ease in and out of them, rather than make knee-jerk reactions in tough times. Hasty decisions to stray from your niche field could impede your personal and business growth and development by many years.
Instead, it is crucial to closely monitor the developments taking place within your niche as it evolves and adapts to the challenges presented by the current environment. For instance:
- What new technology is being introduced?
- How are workers roles changing?
- How are applications of certain technologies changing?
- How are companies crossing industry sectors?
I heard a fantastic story about an aviation recruiter during Covid who identified a company that took all of the seats out of their airliners and started distributing PPE cargo out of China; This project alone maintained their revenue levels when the rest of the industry stopped.
The moral of the story is to evolve with your clients and evolve with your specialism. Every industry or market will have fluctuations, but business always adapts, survives and grows. Be patient and stronger for the next time around!
3. Expand your horizons
Work is now internationally mobile - particularly within tech industries. Companies now trade across borders every day, especially in a post-covid world where remote working is the new norm rather than a necessity.
30 years ago, a recruitment company may have specialised in their own county. Recently, recruitment companies found talent nationally to provide candidates within their areas of expertise. Nowadays, recruitment is rapidly becoming a global operation as talent fluidly moves across international borders.
For ambitious recruiters who are ready to step outside of their comfort zones, this is a great opportunity to build successful global recruitment businesses and gain new knowledge and capabilities. If you do work in an international market and consider yourself to be an expert in your niche, then don’t be afraid to follow your market into new territories.
There is good business to be had in the US and Europe especially and with the support of specialist partners, you can seize the opportunity securely with minimal risk; 3R being one of them!
4. Plan your perm strategy, don’t just react.
The perm recruitment market has always ebbed and flowed in line with the economy. In 2023, the perm market dropped off but it will come back - it always does; the difficult thing is knowing exactly when!
This is where the difference between good and average recruiters becomes clear. If your job title is ‘Recruitment Consultant’, your focus right now should be on the consultant bit. Recovery won’t come any quicker by making a weekly ‘got any jobs phone call’.
Clients will be more receptive to consultative calls to understand their 12-month approach to staff and recruitment, identifying areas where strain will come first and anticipating where and when workloads are likely to increase. You should also be demonstrating value by sharing your knowledge of the market – availability of certain skill sets, salary trends wrapped up in examples and stories that you have seen.
If you can create trust with clients through expert market knowledge they may bring recruitment plans forward if they anticipate that they will need people that will become more and more scarce in coming months – they won’t want to turn up at the pool at lunchtime and find that all the sunbeds have gone!
This is a crucial period for building strong client relationships amidst the uncertainty. Having a keen understanding of your clients' needs and their evolving headcount can help you better anticipate their needs for your services.
In Summary
Ultimately, navigating the current economic climate has been difficult for all businesses, however, despite the uncertainty, there are opportunities for recruiters to emerge stronger and more resilient in 2024. Whether that be through solidifying and refining your existing candidate pools and client relations, or through strategic expansion into new territories, the key is to stay proactive and adaptive to the evolving external environment.
If you would like any support or have any questions I'd be happy to talk, please get in touch.
About Mike Bowler
Mike has worked within the recruitment industry since 1995 — as a top-billing consultant before moving on to a managerial and directorial role. As part of the executive management team, Mike helped grow a small business into an AIM listed company — establishing a business unit from scratch and developing it into a £multi-million perm and contract division, where he oversaw 50 members of staff. Mike is a Fellow of the Institute of Recruitment Professionals (FIRP) and has mentored a number of IRP award-winning consultants throughout his career.
Connect with Mike on Linked In.