Want to expand in the UK? Avoid moving into totally new sectors
8 July 2014
Recruitment firms looking to expand their presence in the UK market should avoid the risk of moving into unaligned sectors, warns the Professional Representation Network (PRN), the talent management service for contractors.
8 Jul 2014Recruitment firms looking to expand their presence in the UK market should avoid the risk of moving into unaligned sectors, warns the Professional Representation Network (PRN), the talent management service for contractors.
Some recruitment agencies, who had very aggressive expansion plans before the credit crunch, had to abandon strategies that involved moving into completely new sectors.
Kate Raganowicz-Gargasz, PRN manager, says: “The improving jobs market is encouraging recruiters to look for new growth options in the UK, but moving into completely new sectors that aren’t aligned with an agency’s existing business is a very high-risk approach. Many recruitment agencies have learned that the hard way.”
Targeting new areas where there is a strong fit with a recruitment agency’s existing business will help the firm evolve organically, helping to cement their reputation in all their fields of activity, while diversifying their appeal, the organisation adds.
For example, an oil & gas-focused recruitment agency could be well-placed to move into other areas of the energy sector, or an agency which covers both financial services and technology could carve out a niche as a financial IT specialist.
In addition, firms that supply medical staff could profit from providing support and back office services to the sector too, or may spot an opportunity to move into care home recruitment.
Finding out which direction clients are moving in, in terms of their priorities for investment and future growth, will give a useful indication of which areas recruitment firms should look to develop next.
Raganowicz-Gargasz adds: “As the UK jobs market picks up, the question for recruitment firms is: where are the opportunities for growth going to come from and how can we capitalise on them?
“For agencies looking to expand, one of the keys will be to use their existing skills in new ways to penetrate new markets, ensuring that they are seen as experts in a wider range of fields.”
10 top tips for recruitment businesses to expand in the UK market
Recruitment businesses looking to expand in the UK market should:
1. Evaluate existing experience and expertise against new sectors or disciplines which are a logical fit…
2. …but which also offer a good business opportunity, either because they are performing strongly or because skills shortages are increasing demand for talent.
3. Talk to clients about their medium and long-term objectives, and any new areas they are developing. This will help with planning for the firm’s future direction, as well as ensuring it has support as their business develops.
4. Know your market. Having identified synergies with existing practices, make sure you also understand how each new sector or discipline is different, and what particular issues are affecting it.
5. Plan how you will develop the specialist expertise required within the team. Consider how best to utilise existing talent, including training where necessary, and think about whether new hires are needed to fill knowledge gaps, provide a way in through their contacts or give depth and breadth of experience.
6. Consider how much investment for business expansion will be needed in terms of staff, larger premises, additional office locations, training programmes etc.
7. Secure funding ahead of time. Think about whether own capital, bank loans, finance from specialist lenders or external investment is the best way to fund this and put together a compelling business plan.
8. Maximise the impact of social media to access the best talent in different sectors or new geographical locations. Developing an app can be a good way to stand out from the crowd…
9. But don’t forget the importance of face-to-face contact when forging relationships in new areas. Talking to key players in target markets in person is essential, whether that’s employers or key potential hires.
10. Add value. Consider how to support clients on an on-going basis through HR support, e-bulletins giving advice on industry or legal developments, seminars, etc.
Some recruitment agencies, who had very aggressive expansion plans before the credit crunch, had to abandon strategies that involved moving into completely new sectors.
Kate Raganowicz-Gargasz, PRN manager, says: “The improving jobs market is encouraging recruiters to look for new growth options in the UK, but moving into completely new sectors that aren’t aligned with an agency’s existing business is a very high-risk approach. Many recruitment agencies have learned that the hard way.”
Targeting new areas where there is a strong fit with a recruitment agency’s existing business will help the firm evolve organically, helping to cement their reputation in all their fields of activity, while diversifying their appeal, the organisation adds.
For example, an oil & gas-focused recruitment agency could be well-placed to move into other areas of the energy sector, or an agency which covers both financial services and technology could carve out a niche as a financial IT specialist.
In addition, firms that supply medical staff could profit from providing support and back office services to the sector too, or may spot an opportunity to move into care home recruitment.
Finding out which direction clients are moving in, in terms of their priorities for investment and future growth, will give a useful indication of which areas recruitment firms should look to develop next.
Raganowicz-Gargasz adds: “As the UK jobs market picks up, the question for recruitment firms is: where are the opportunities for growth going to come from and how can we capitalise on them?
“For agencies looking to expand, one of the keys will be to use their existing skills in new ways to penetrate new markets, ensuring that they are seen as experts in a wider range of fields.”
10 top tips for recruitment businesses to expand in the UK market
Recruitment businesses looking to expand in the UK market should:
1. Evaluate existing experience and expertise against new sectors or disciplines which are a logical fit…
2. …but which also offer a good business opportunity, either because they are performing strongly or because skills shortages are increasing demand for talent.
3. Talk to clients about their medium and long-term objectives, and any new areas they are developing. This will help with planning for the firm’s future direction, as well as ensuring it has support as their business develops.
4. Know your market. Having identified synergies with existing practices, make sure you also understand how each new sector or discipline is different, and what particular issues are affecting it.
5. Plan how you will develop the specialist expertise required within the team. Consider how best to utilise existing talent, including training where necessary, and think about whether new hires are needed to fill knowledge gaps, provide a way in through their contacts or give depth and breadth of experience.
6. Consider how much investment for business expansion will be needed in terms of staff, larger premises, additional office locations, training programmes etc.
7. Secure funding ahead of time. Think about whether own capital, bank loans, finance from specialist lenders or external investment is the best way to fund this and put together a compelling business plan.
8. Maximise the impact of social media to access the best talent in different sectors or new geographical locations. Developing an app can be a good way to stand out from the crowd…
9. But don’t forget the importance of face-to-face contact when forging relationships in new areas. Talking to key players in target markets in person is essential, whether that’s employers or key potential hires.
10. Add value. Consider how to support clients on an on-going basis through HR support, e-bulletins giving advice on industry or legal developments, seminars, etc.
- Want to comment on this story? The Comment box is at the bottom of the page. Sorry for the glitch but just scroll right down and share your opinions!
