It is widely accepted that the worst of the recession is behind us and that some growth will be evident across the country during Q4 of 2009.

Nobody is saying that the economy, and recruitment within it, will spring back to previous levels any time soon, but confidence is beginning to return and investment will surely return with it. In working with hundreds of agencies over the past five years I have seen many young owner-managers experience the first downturn of their careers — they will have learnt a very great deal from that. But how will they respond to the upturn — how will they know it has arrived and will they remember the lessons of the past 18 months as the balance sheet starts to grow again?

I have been astonished by the lack of analysis of the information available in small- to medium-sized agencies — the term would probably be key performance indicators (KPIs) in today’s parlance. Too many owners run their businesses based on their gut instincts. Ask them how many qualified requirements they received last month and how that compared with the previous period and they’ll struggle to tell you. Nor will they know how many CVs were dispatched or interviews arranged. You might see the odd interview board but it will nearly always be out of date. Very few will have good data on individual recruiter performance. They’ll usually know how many placements they made last month (not always, in my experience) but that’s not business management — that’s simply writing the score down.

The companies that will thrive as we return to growth will be those that have an eye for detail and can use the KPIs available to them to inform their decisions and anticipate issues that will arise and ready themselves accordingly. Here are some examples:

• You are busy and think you ought to be hiring. Ask yourself — how long has it been like this? How many requirements are you now handling against the same period last month and the month before? Has a trend emerged that you can rely on?
• Ask your customers about their hiring plans. Are they changing markedly and will any growth in their needs be sustained? If they plan to increase their headcounts by 10%, then you have some measure of how you need to grow your delivery capability
• Is it getting harder to find good candidates and compare that month-on-month. That will soon show a sustained upturn is happening — or not! How many people are registering with you for work? Has that grown or shrunk?
• Will you keep controls in place regarding your expenditure — forced upon you during the recession? How will you ensure this actually happens?
• How will you keep your best recruiters as they get more confident about the market and wonder if they should look around? They’ve helped you through the downturn – how will you secure their future with your firm in the upturn?
• The market will have shrunk by at least 10% — in fact even with an upturn there will still be firms that fail over the next 12 months — so you have less competition. But new agencies are starting out and will appear fresh and hungry. Is your proposition distinct and attractive? The world has changed — has your service changed with it?
• Your margins and fees may have been eroded during the recession. What value can you add to help build these back as growth returns — or will you become mired in a world of low gross profits and low returns?
• Do you have the right blend between servicing your long-term customers — who have stuck by you — and new client development? We can all fall into the trap of being excited by the chance of winning a new client and neglect the ‘old faithfuls’ in the process. How will you measure that?

As a sector we’ve had a tough time and it is only now just beginning to abate. But confidence is growing and opportunities will emerge. Will you simply respond to them as they do or will you plan your way to growth by knowing what to do and when to do it? The answers lie within the data and the events that are happening in your business every day — they are there if you look for them. I wish you great things as confidence returns — listen to what your business is telling you and you’ll make better decisions and get ahead of the curve!

Jeff Brooks has 40 years’ experience in industry, with the last 25 in the recruitment sector. He is a non-executive director of three agencies and a council member at the REC. He provides advice and guidance throughout the sector through his consultancy company, Winmorebiz.

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