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The Devil Is In The Detail And Success Leaves Clues…………
Posted by Nicky Coffin
This post isn’t about blowing our own trumpet; however, what I will say is that we work with clients on a number of key areas AND we always start with a detailed analysis.
We call it our Business X-ray ™.
In my own experience working in recruitment at every level over the past 18 years; the devil is in the detail and success really does leave clues.
Surprisingly it’s not that common in our industry to take the time to be reflective and look at what is working and delivering results.
I have talked about paretos principle before and the power of the 80/20 rule. This plays out in every area of our business life and can help significantly when you reflect on what delivers results in your recruitment organisation.
I talk to lots of recruitment business owners and I look at many different companies. When someone starts talking to me about scaling their recruitment business, what’s getting them really tripped up is they’re trying to figure out the “how” and there’s all sorts of things they think they “have to do” to get where they want to go.
The truth is that it’s only a few key areas that you need to have in place in order scale your business.
One of the things that I focus on first, which might surprise you, is taking 90% off your to-do list. This then frees up time to focus on a maximum of a couple of things – that when you master them could double or triple your profits.
So, there’s a good chance that if you’ve been racking your brains and thinking; “Well, how do I scale the business without working harder than I’m already doing?”, you’ve been doing it the hard way.
A Business X-ray ™
This is where you do a deep dive analysis into your business and its metrics, ideally going back two years. This will help you identify the hidden areas that are already there that, with some focus and tweaking will unlock hidden revenue streams.
This is the true power of the 80/20 principle. What normally shocks most directors is the fact that 20% of both clients and candidates are delivering 80% of the profit. These figures might be slightly different i.e. 75/25, though the general principle will apply.
I uncovered this when I had my own recruitment organisation and luckily the penny dropped for me that; “Why aren’t we just designing the business to focus on those top 20% of clients or the top 20% of candidates? Because we are going to get the best possible results with the least amount of work.”
There are certain key areas to look at and analyse.
- Clients that are spending with you and at a higher fee
- Your KPI stats and ratios (e.g. billings, CVs out, fee levels)
- Candidates placed; what patterns/skill sets do you see?
- Your costs and their ROI; are you spending enough?
- Your consultants; what are they costing you versus what they deliver?
So, I’ve got some questions for you……
Who were the 20% of your client base who delivered 80% of your revenues over the last 12 -24 months? And who are the top 20% of that 20%?
20% of 20% is 4%, and I find this statistic over and over again when I look at businesses: there will be a top layer of 4% in any customer group, in any customer list, who are what I call the “premium buyers” or “most place-able candidates” and these are the ones that you want to focus on replicating.
Why? Because even if you can find one more client like this to add to your base, you are going to get the best possible results.
A story to illustrate the point……
Here is an example I know many of you will resonate with. One of our clients works in the high tec space where great candidates are in short supply. They were offering a premium service for a 15% fee in a ‘sellers’ market.
Using a detailed process, we have developed, we could see that by increasing their fee level they would be able to add an extra £3000 minimum per placement without doing any extra work!!
Image a team of 8 making 1 placement a month but NOW adding an extra £3000 onto the bottom line fee – that one thing potentially could add an extra £24k a month which over a year works out at £288k.
The actual results were even better………………
In fact, their team were making more than one placement each a month so that one tweak added an extra £500,000 profit to their bottom line over the year.
Now there were other things that they had to implement in order to increase their fees confidently and this is something that we showed them how to do, however, the start of this process was the Business X-ray ™ system we developed.
It’s pretty straight forward as your first start; analyse your data. Look at the key stats we have mentioned earlier. Then take action on what you find.
Need help with this? Then get in contact with us here.
High performing consultants are the lifeblood of any successful recruitment organisation. The challenge starts when your recruiters underperform. There is a solution and I cover it in-depth in my latest ebook; How to Convert Your under Performers to Consistent Billers in 14 Days or less. You can download it here.