Welcome to the State of RecOps Newsletter!

Edition 01

While we conduct analysis and create reports regularly to help recruiters make sense of the rapid changes, we realized the frequency wasn’t enough to keep up.

That’s where this newsletter comes in. A lot is happening—the industry is trying to gauge whether 2025 will be a recovery year, experts are deciphering the scope and impact of AI, and headhunters continue to grapple with perennial problems like candidate pipelines and engagement.

This newsletter is a forward-looking blueprint to weather the storm—one trend at a time.

Let’s dive in!

2024 vs 2025: A Reality Check

2024 was a tough year. While Q1 and Q2 were mauled by slow growth, Q3 and Q4 showed signs of recovery—until 2025 arrived.

So far, 2025 has been slow. Demand is shrinking, and agencies are struggling to predict growth. The profit margins are contracting for public listed companies and the share prices are taking a hit QoQ. To weather the storm, companies are taking high-risk, high-reward bets like acquisitions and global expansions. Will these unlock a hockey-stick growth curve? Only time will tell.

Based on findings from reports and insights from our customers, we identified a three-pronged approach every agency owner must consider.

The D-I-R Formula

D-I-R stands for Diversify, Identify, Rectify.

These are three distinct focus areas for agencies of all sizes.

Diversify

To mitigate risks from the market slowdown, publicly listed companies in the US and UK prioritized diversifying their assets. In the post-pandemic world, workforce dynamics have shifted: remote and hybrid work are ubiquitous, and demand for contract and temp hiring has surged.

Examples of diversification in action:

• Manpower launched GigNow to tap into freelance and contract hiring, while expanding ManpowerGroup Solutions (MGS) to offer end-to-end workforce management. MGS now accounts for 35% of total revenue, up 25% since 2022.
• Robert Half scaled Protiviti (its consulting division), Hays introduced Hays Talent Solutions, and Korn Ferry pivoted from pure-play recruitment to integrated talent solutions.

Key takeaway: Diversification is non-negotiable. In fact, diversification can also improve your RecOps by improving the efficiency of existing resources.

There are two ways we’ve seen diversification work:

1. Expand to adjacencies: If your agency specializes in engineering, expand to product or cyber security roles.
2. Expand revenue models: Alongside full-time hiring, agency owners can offer consulting, contract or project-based hiring, or freelance talent services. Once you have a well-defined playbook, RPO is also a great option to expand the revenue stream.

Identify

Last year, we analyzed data from 1,000+ agencies to understand how different businesses scale. While over 60% of agencies fail to cross the $1M revenue mark, top performers scaling beyond $10M share two traits: they identify their top revenue-generating clients and retain them year-over-year.

Why focus on your top 10% clients?

• They generate up to 37% of annual revenue.
• They contribute 35% of all job orders.
• Returning clients drive up to 70% of annual revenue.

How to identify them:

1. Segment your client base by revenue potential, job order frequency, and volume.
2. Identify growth opportunities by expanding services and increasing footprint.
3. Invest in relationships. As Ryan Dunphy of PAC Solutions says, “Recruiting isn’t about filling roles—it’s about building relationships.” Assign your best team members to manage key accounts.

Rectify

With a major concern around shrinking profit margins, it has become imperative to bring the focus on efficiencies again.

Technology is some saviour, to the extent that it can solve real problems.

On an organizational level, start by identifying bottlenecks to fix with step-funnel analysis, automate repetitive tasks, and leverage AI for creating call and candidate summaries, interview questions, and better candidate matches.

Final Thoughts

Surviving today’s market is tricky, but with the right strategy and tools, you can build a clear roadmap for growth.

That’s it for this edition! If you have questions, feel free to reach out.

See you in the next edition ??

Footnotes:

• If you are using Recruiterflow, speak with the customer support team to understand everything you can automate. Do ask about AIRA (AI-first Recruitment Assistant).
• In March, our founders Manan Shah & Amritanshu A. will be in Miami and London, so if you are in the area, do drop by for a coffee.