How your recruitment business can survive the COVID-19 pandemic

1. Cashflow is king

Obviously, there is nothing revolutionary about this statement but it’s how you act in terms of cash collection under such trying circumstances. One good tip is that as your Consultants hold the stronger relationships with your key client stakeholders (Credit Controllers only have contacts in Finance Teams), then all Consultants should be responsible for chasing their own invoices. Equally, if not already in place, then it may be prudent to insert into your commission plans a condition which states that you only pay out commission once you have received payment from the client. Key areas to consider:

Have a clear understanding of what cash is coming in/going out

Look at all areas to reduce costs eg. office rent/cancel website for 3 months 

2. Cost Reductions

Naturally, you must carry out cost reductions in order to ensure that your business survives but do not cut so deep that you do not have the correct resources available to take advantage of the bounce/upturn that will eventually happen.

3. Staff Cutbacks

Ensure that you make such decisions based on facts rather than pure emotive reasons eg.

Previous activity: 40 live roles from 10 Consultants (4 per Consultant)

Current activity: 8 live roles

Therefore, you only require 2 Consultants to effectively maintain your billings so put the other 8 Consultants on furlough. Always retain the most experienced Consultants as these are the individuals with the strongest relationships who will eventually generate the new business to bring you out of the recession. Dependent upon their salary levels, whilst still maintaining their motivation/commitment to you, it is fine to reduce their salaries by up to 30%.

4. Business Development v Sentiment/Business Confidence 

As recruitment is directly linked to sentiment and business confidence (it’s very difficult to create roles without the client being upbeat about their future growth/expansion plans), please do not expect your Consultants to be generating many, genuine live roles. A good way to approach business development is by thinking of the medium term and building a future pipeline for when the confidence returns (and it will, especially once a vaccine has been found), so think of these 3 stages:

Call 1: Act as a Subject Matter Expert, offering market intel

Call 2: Build rapport

Call 3: Establish a plan of action

It’s better to have Consultants whose billings dramatically increase when client’s business confidence returns rather than have Consultants who make the odd placement now but do not experience a spike in their billings at a later date. 

Also, as you have retained the more experienced Consultants, all Consultants should be focussed upon winning exclusive business/roles. More importantly, all roles need to be accurately qualified in order to avoid the common risk of roles being cancelled.  

Equally, although clients are more readily available as they are working from home, I would still schedule future key calls with an introductory email suggesting 3 date/time slots.

5. CV Shortlisting

Due to the vast increase in candidates, clients are now paying for your Consultant’s matching/shortlisting skills so they must still be focussed upon the submission of their best 3 candidates rather than be tempted to submit more CVs eg.

Pre-recession ratios: 3 CVs from longlist of 6 candidates

Updated ratios: 3 CVs from longlist of 12 candidates

6. Employer Buy-backs

Naturally, these will become far more common as candidates are nervous about leaving their current employer so Consultants must pre-handle such objections at all stages of the recruitment process.

7. Back to basics

Do not worry about your 5 year strategy as you need to sell your way out of a deep recession and this starts by giving excellent customer service. Also, do not diversify into new markets but stick to your known territory whilst aiming for greater market share.

8. Do not enter a Price War 

Obviously, many of your competitors are going to offer special discounts but this is merely a knee-jerk reaction that could seriously devalue your service proposition. In itself, reducing your fees will not result in the generation of more live roles as clients are simply not buying due to a lack of confidence rather than your pricing strategy. Possibly the only time that you should consider a slight reduction in your fees is to gain exclusivity on a role or client.

9. Increases in contractor/temp utilisation

When business confidence has started to return, initially clients are more likely to hire contractors rather than a permanent member of staff as this gives them the ongoing flexibility to scale up and down as fast as possible.

10. Working from Home (these are just 1 or 2 ideas from James Caan and not my complete handout on the subject)

It is vital that you replicate your normal office culture as much as possible so James suggested the following:

8.30am Catch–up call

Midday: Review call

5.30pm: Review call

6.30pm: Once per week, virtual drink etc

Personally, I’d carry out the 8.30am and 5.30pm calls (1 at lunchtime is over the top unless you’re leading a team of novices).

Without doubt, although we will return to working from offices, the sceptism behind working from home has been broken and far more companies will definitely be offering a much more flexible approach to working from home. This will differ from company to company and could be different for various roles. However, it is true to state that if you have hired the right type of Consultant with the right set of behaviours, then they can be far more productive working at home than in the office eg. commuting time can be utilised, far less distractions and less social chit chat.

11. Video Interviews/Online meetings

Once again, clients are starting to use such facilities so even when we return to the norm, video interviews, especially for the first interview, will become far more like standard practice. Likewise, your Consultants need to become adept at setting up online meetings. 

Stay safe and be positive,

Jon