Lost Your Recruiting Job: How is your firm reacting to the economy?

Most large search firm repeat a cycle throughout changing market conditions: hire when busy, fire when slow. So why don't they ever use the down-cycle opportunity to create a more efficient search model so they can better sustain employment when the next downturn occurs? We've received tips, lists and all kinds of contact from individuals terminated from search firms. Leading firms have released hundreds of individuals, with one prominent Chicago-based firm terminating over 100 employees in the US. Terminated employees are faced with few opportunities in the business and long lines wherever jobs are available. This is forcing some hunters to band together and build new search businesses. What is your story and what are you doing to survive?

Beyond Survival: Make yourself bullet-proof for every recession

Most search firms react to a downturn or recession in the same, repeated way:  fire staff to reduce operating costs and rehire when the market picks up.  How can you adjust your strategy to avoid pitfalls in the future?

The most successful firms and individual recruiters survive because they operate efficiently, carrying the lowest risk possible.  That means maximizing every new opportunity while lowering your cost of doing business.

While generalists may get the most opportunities for search business, they win fewer projects.  Niche players tend to carry a deeper level of expertise and win projects at a higher ratio than generalists.  Sure, being a niche player may mean fewer opportunities - but you'll win more, and that's what counts.  

Niche recruiters spend less on getting new business and risk less with each new opportunity. This form of operating efficiency can have a real impact on your success and your survival in difficult market conditions.  To alleviate your monthly cost of doing business even further, consider hiring a recruitment industry consultant or an accountant to review your budget.  A budget review from an outside perspective can result in several new strategies:

1)  Lower obligatory costs by lowering or removing ongoing costs (i.e. expensive online resources used to execute search)  Restructure your business to tie internal costs to search so they grow and shrink based on your revenue.

2)  Instead of firing your employees, try shifting them to an outsourced model.  Pay them more as a subcontractor in exchange for removing benefit costs and issue 1099s at the end of the year.  Give them bonuses based on your revenue and success, resulting in the potential for fewer hours of work and more revenue.  Offer to shop their capabilities to others in the industry so you can get others to contribute to their revenue.  You'll be happy to remove the stress of "taking care of your employees" each month, and by providing them office space and tools, you'll help them succeed too.

3)  Get rid of your internal technology (and support) by shifting to an outsourced, web-based model.  This will lay the groundwork for a flexible business that can be operated from anywhere.  It will allow you to plug in (and unplug) external help in accordance to your revenue pipeline.

Other ideas?

Executive Recruiters: Reacting in a Down Market

With the usual summer slowdown in executive search many firms are anxiously awaiting the traditional up-tick we experience in the Fall. With the current economic conditions many firms are unsure of what to expect this year. Some firms have had to cut staff and resources in advance of what they predict will be a slow return.

What is your outlook for the coming months and what is your firm doing to:

1) Sustain under the current conditions?

2) Prepare for the future?

Today, the best-practice processes developed by executive search firms are the result of doing things “the way we think”. We naturally prefer to get to a result in the fastest way possible.

Contrary to this, most off-the-shelf databases force us to navigate off our natural path via complex features – and it makes things difficult. We need technology to work in the way we think – and be completely in step with our best-practices processes. This is the most common reason firms explore the proprietary software build – to create a system that’s better aligned with their best-practice processes. They build because no existing product is designed to meet their unique needs. Anything close is inflexible and unable to close the gap. These systems are based on processes that are either old or are processes they ASSUME will fit any organization. That is what's at issue here.

How can a proprietary system help your firm?

Recruiting Database: Build it or Buy It?

Over the years, contact database technology has changed, especially with so many off-the-shelf options out there. In the early-mid 1980s and 1990s had most search firms building their own systems - at a huge cost. Today, build-your-own is a more viable option with prices coming down in both categories thanks to competition and access to talented developers. My question to you is, "Build or Buy - and why?"

Candidate Feedback

From a contributor: I've been in senior level executive recruitment for over 24 years now. As most of us know, the industry has always been client-driven. Recruiters are expected to represent their clients in the market and make talent-assessment decisions on behalf of the client, long before candidates are presented. Even in periods of talent shortage these recruiters must remain client-driven because they are retained/paid by clients. Over the years many firms have chosen to survey their clients in order to better manage their expectations in the future. However, it seems no one wants to survey the candidates! Is it because recruiters believe candidates get what they expect throughout the process? Is it because candidates lack power in the process? After all, most candidates are just one in a group of 6-10 presented. Or is it because recruiters believe that for candidates the process is not broken, or does not warrant improvement?

Accounting Tips

Please tell us your ideas and thoughts about your accounting operations, software, invoicing, collections, etc. For example: What fee structure works best? What additional line item charges beside fees are acceptable by your clients? What software do you use?