How to invest in Rec Tech the right way

“I’ve signed up for XYZ jazzy recruitment tool, if it only gets us one more placement in a year it pays for itself!” Sounds good business sense, or is it?

As a business leader, your job is to use money to make money, that’s how the business grows. So if you can make more money using a new piece of recruitment tech that’s a smart investment.?

Recruitment tech is like marketing and branding, it can’t walk out the door like staff can so it’s a safer investment. Plus, (like marketing) if it makes your business an easier place to make money, it helps keep staff attrition down as fewer do walk out the door.?

However, before you go signing up for all the whizz-bang tech out there a cautionary tale…

If you involve your staff in choosing new tech, they will invariably want it. Why? Because it doesn’t cost them anything and we all like new toys that could help us bill more. But don’t ask your staff's opinion if you’ll ignore the answer, if you do you lose credibility. I’m absolutely not saying don’t ask for opinions. Asking the opinion of those in your business helps their feeling of involvement, plus they are front line, so their opinions definitely count, most of the time more than yours.

So how do you solve this problem? Firstly, don’t ask your team if you should get a piece of tech - be more subtle and ask what their opinion is. And know which staff will be more honest with their opinion on if it’ll give a good return on investment, they’re the best to ask.?

But the biggest thing is to treat any new tech investment as you do with marketing spend, you measure it to see what the real return on investment is. A very basic example is evaluating the effectiveness of a new job board, especially as certain job boards (I won’t mention names) have doubled their prices in the last year! For every placement in your business, you should log where the candidates come from, especially if it’s from cv libraries or job boards. Only then do you know if you actually make money from said job board.?

I admit not all tech is that transparent on the return on investment but even if you just measure if the tech is actually being used that can be enough.

Way back when I ran my own recruitment business, I showed my team Lead Forensics , which shows the domain name of visitors to your website i.e. the name of the employer of where the website visitor comes from. The plan was to use that for new business - put a new biz call into the HR Director, Sales Director etc. of the company because some of the website visitors will be decision makers looking for a new recruitment business, not candidates looking at our vacancies.?

The team all loved the idea of it, “Get it Rhys, we’ll definitely use that.” So, I did and when I measured how often people followed up the leads, not a bloody one! I told them I was cancelling it because no one used it, “Don’t Rhys we will use it.” So we kept it, and they still didn’t, and I canned it with no more debate. This was followed by a meeting to explain I wanted their involvement in the decision-making whilst educating them on the basics of commercial return on investment being a must.

Don’t fall into the trap of collecting new recruitment tools purely on the premise it only takes one placement to pay for them. If you do, the costs will quickly add up, and before you know it you’re business break-even figure will be so high that you’ll need record-breaking months to make money!?

But don’t be the opposite either, and be closed-minded to recruitment tools that can help your team bill more. As I said at the start, if recruitment tech is proven to help the business make more money, get it, get your staff using it, and stick with it! It will not only have a positive effect on your profits, it’ll help with your staff attrition too.

Rhys Jones

Managing Director – Davidson Gray

Rhys sold out of his previous recruitment businesses in 2012 to focus solely on helping recruiters set up and build recruitment businesses.?Follow?Rhys on?LinkedIn?or contact him?direct?here?for help with your start-up recruitment business or for coaching to grow an existing?one.

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