The UK has the second largest number of recruitment businesses in the world behind Japan. With around 10,000 recruitment businesses and approximately 100,000 recruiters, most UK recruitment businesses have between 1 and ten staff.
Some of this is by choice, of course, while others are fledging operations in their first year of trading. However, for others, they have simply not found the right formula to take their ambitious ideas forward to the next level.
Since setting up Matrix Executive, a business advisory and mentoring service specifically for recruitment business owners, I have found some recurring themes holding them back. These growth killers go beyond the much highlighted ‘cash flow’ issue, and choice of market.
So, here are my top five growth killers
1 - Poor Planning
The number 1 killer is lack of planning. As the old cliché says “failing to plan is planning to fail”. Successful recruiters going it alone and then deciding to employ some additional staff form many of the SMEs around today. But many have never really thought in any detail about what they are trying to achieve, where they are taking their business and by when.
Time spent putting together a reasonably detailed picture of what their business would look like over 3 or 5 years as they reach their goals is time well spent. Working back in time, it includes financials, size of company, markets and structure. The amount of detail required increases the closer to the ‘here and now’ the plan gets.
2 - Shortsightedness
Many owners are dumbstruck as to why the staff turnover is high or the average billings per consultant is not what they thought it would be. They forget that staff need direction, motivation and career (or at least job) aspirations.
Consultants require targets that are relevant to their desks or stage of development, specified results to know whether they are being successful, and correct rewards when they are.
Recruitment is a people industry. If you don’t buy (invest) in to your staff, they won’t buy in to you or your business.
3 - No Data
In this information age, we could go word blind with all the information that we have to contend with. For some people the answer is to ignore it all, but killer number 3 is to ignore what the facts are telling you.
The secret is not to ignore all of the data or to go to the other extreme and drown in it. Concentrate on the data that informs a business what is working and what is not.
For financial analysis it’s some key ratios. For performance, it’s a limited number of performance indicators of success and failure in the recruitment cycle. For time management it’s simple measurement of most and least productive time.
4 - Lack of Accountability
How many times do you re-visit the same challenge, come up with the same or similar answers and realise that you still haven’t put most of them in to motion?
It is still all too easy to put off important but non-urgent tasks in favour of urgent, fire- fighting ones.
5 - Inexperience
Learn a lesson from the most successful people and companies. Surround yourself with high quality, knowledgeable, experienced people. You don’t have to do it alone.