In one of my recent blogs, I referred to the VUCA environment (Volatility, Uncertainty, Complexity and Ambiguity) in which most recruitment businesses now find themselves.
In this world, agility is key. That may mean:
- Rapidly changing your proposition or product
- Finding new geographies
- Entering new sectors
- Engaging staff with different talents
For certain, though, there are very few recruitment business owners who can afford to just “have a punt” on a new market right now.
And we all know examples of “fluffed” launches where over-reliance on single-source or anecdotal evidence, lack of research and (above all) lack of a structured approach to entering new markets have cost businesses dearly.
So, I have outlined here what you need to do to maximise your chances of success.
If you have only worked in one market before you won’t have much in the way of comparison points. If you have only offered one or two “products” before (like perm contingency and contract recruitment, for example) the shades of difference in sales and marketing approaches required may not be clear to you.
This is a guide only, please seek professional help when entering a new market.
For me, there are essentially 3 types of research I want to look at before I commit expensive salespeople and marketing resources. If this is a failure, I may have damaged my brand, lost my people to say nothing of the opportunity cost while their attention was diverted from the core business. So, take some time to do:
a) Secondary research.
This is easier for public sector markets because they have statutory duties to report certain KPIs, and have to answer reasonable Freedom of Information requests. But you can find – and extrapolate – hard data on private sector markets too.
Start with professional associations and consider paying business intelligence services for this service. What you are looking for is market growth and investment, and ideally – for a recruitment agency – a fairly fragmented market.
This is because markets with a few, monolithic employers tend to have a lot more “purchaser power” to drive prices from suppliers down. Also, if Master/Neutral Vendors control your market, you will need to decide whether to work with them or try and find your way around them (off-framework).
You can’t be both.
b) Primary research.
You can use your own resources, or your marketing agency will probably be able to suggest an approach. Surveys are by far the best way to collect data at scale, but you will need 1) well designed questions that are not too onerous or vague to answer. Multiple choice always does better than freestyle text.
2) An incentive for people to complete them. This often takes the form of a free copy of the finished report, or entry into a prize draw. Above all, make sure your questions will get you specific answers, so “how many engineers did you recruit last year” with 0-10, 10-20 type options will give you more useful information than “how many engineers do you plan to recruit in the next 12 months?”
c) Qualitative research.
This is more labour intensive and there are limits on how much you can do. It is likely to include 121 interviews/calls to delve into more detail about high-demand skillsets, recruitment processes and compliance requirements, hiring plans, current suppliers, contract v. permanent usage, rates etc.
d) You are likely to convert this more quickly if the market is related to your existing one.
So, a different skill set to existing clients, a new geography, or selling contract to your perm clients are all good bets. An IT agency trying to sell clinical staff to the NHS? Not so much.
2. Define your proposition.
You may not have a fully formed business plan yet, but you will have a clear idea about what type of recruitment (or related) service you want to provide, what type of candidates you will focus on and who your buyers could be in each client organisation.
Will your existing brand work with them? Or do you need a new one- which could involve new website, design etc – in which case you need to get started.
If you do go down the new brand route, PLEASE avoid doing that self-glorifying thing of naming the company after yourselves. You are just not famous in this new market, so instead make the brand do something for you. It should make reference to your audience and or your proposition. Even “out there” branding like Purple Squirrel Recruitment tells me that you are “hipstery” and informal, and that you will find me rare candidates. Pete Thomas Recruitment does not.
Now before you go public, do make sure your salespeople are clear about the market gap they are proposing to fill. It doesn’t have to be a genuinely unique offering, but it really helps if you have something eye-catching in your terms, or process, or tools to access candidates. You’re new in this market, and there are probably others who have a head start. Don’t just be a “me too” recruiter.
By the way, pitching up with “We’re not like other recruiters. We want to build long term relationships” definitely does NOT fulfil this requirement.
3. Do read up so you can talk turkey.
Now you need to swot up on the key data. This is critical because candidates and clients need evidence that you know stuff about their market. Salary data, biggest employers, professional associations, qualifications, legislative frameworks, recent changes and trends.
I know an HR recruiter who stumbled across an opportunity for Occupational Therapists. He had no idea that there was a whole bunch of compliance checks he needed to do on these workers and his naivety cost his employer £15,000 plus the lost fee.
It’s important that your data comes from credible sources and you need to be able to drop it into conversation. On the one hand, it’s never been easier to access this data. On the other, there’s more fake and unsubstantiated “info” on the internet than there has ever been.
These are just the first three points on making a new market a success. Read part 2 here, where I will cover points 4-7 which include the most effective ways to build your network, how to market your new offering and the all-important sales process.
Alison Humphries is a highly experienced MD and NED, with 35 years at the top of the recruitment sector.
She advises directors and owners of recruitment businesses on strategy, finance, sales and management to maximise performance, enter new markets, prepare for sale and work more efficiently.
To see how Alison can help, contact her HERE for a 30-minute free Discovery meeting worth £100.
You can also contact her via LinkedIn where you can read some of her clients’ recommendations.