The life cycle of a successful recruitment consultancy - Part 2

In last month’s article I explored the challenges of starting up a recruitment consultancy. Having successfully navigated those challenges, this article will explore how best to grow your business in the momentum phase before discussing the maturity phase next month.

Fri, 22 July 2016 | By Alex Arnot

FROM AUGUST'S RECRUITER MAGAZINE

In last month’s article I explored the challenges of starting up a recruitment consultancy. Having successfully navigated those challenges, this article will explore how best to grow your business in the momentum phase before discussing the maturity phase next month.

The Momentum phase (typically years three to five)
With an established core team, the business is able to gather momentum. The principal challenge will be attracting and retaining the best people. Those owners who didn’t add a senior team member to sit alongside them in the start-up phase really should consider doing so at this point as you formalise the team structure. What may have felt like an intimate, family atmosphere must start to professionalise.
 
The principal challenges businesses in this phase face are:

  • ATTRACTING TALENT – as momentum grows you will be constantly hiring (both to grow and to replace talent you lose). Finding good people will be your biggest challenge. 
  • RETAINING TALENT – if you are doing well, your competitors will be constantly trying to hire your best people, both to improve their businesses and to disrupt yours.
  • PROFESSIONALISING THE FAMILY – as the team grows it is no longer possible for you to manage everyone and everything. Structures, systems and processes need to be put in place. Communications and career plans must be formalised.
  • MAINTAINING A STRONG USP [UNIQUE SELLING PROPOSITION] – as the team grows and your influence over the business dilutes, you need to find ways to maintain the elements that have made your business successful to date.

 
Advice to maximise growth

  • Hire a hiring manager – you will be recruiting and training people regularly through this phase. Hiring someone to help you with this process will free you up to run the business and bill.
  • Formalise and embed your vision and values – it is your vision and values that have made the company successful to date. As you are able to exert less direct influence over the team (both inevitable and a good thing) you need to make sure that the positive attributes that have built the firm perpetuate.
  • Develop and communicate a clear career progression path – this can only be done if you have a strong business plan in place as that will give you the confidence that the career plan is sustainable. To reduce the reliance on using cash to retain talent, focus on developing a system of initiatives and awards (including an EMI [Enterprise Management Incentives] scheme). Better, serviced or leased offices will give employees pride in where they work, as will applying for awards and other third-party endorsements.
  • Invest in support staff – as you grow, so will the time invested in support functions and administrative tasks from accounts through to marketing. There will become a tipping point where making hires to free up your billers’ time will make financial sense.
  • Plan, plan, plan – as ever you need to keep operating to a plan or you will find that the company becomes less and less efficient.

 
Target size after five years: 20-40 employees.

This is the second article in a series of three.


Alex Arnot
is a non-executive adviser to more than 20 recruitment companies

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