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Three Important Considerations When Starting a Recruitment Agency

by Veronica Blatt

If you’ve been thinking of starting a recruitment agency of your own, you’re probably already aware of the importance of developing both a good business plan and a good marketing plan. Here are three other important considerations:

1. Have enough money. Conventional wisdom states that you will need to have enough cash reserves to support your new business for 18 months with no revenue. Historically, half of new business start-ups fail within the first five years, and a significant portion of those failures are due to being undercapitalized. Before starting a recruitment agency, figure out where the money will come from – personal savings, loans from family or a business partner, conventional financing, etc. Trim your personal overhead as much as possible so that you can still pay your household bills on a greatly reduced – or nonexistent – income.

2. Have a plan to run a business, not just a desk. If you’ve been a successful recruiter working for someone else, it’s easy to think that starting a recruitment agency of your own will increase your personal income. That’s not necessarily true. When you’re working for someone else, you’re responsible for your personal production. You may have help in the form of administrative or research support, or even business development, which allows you to spend your time on what you are good at — making placements. When you go out on your own, your budget may not allow for administrative or research support. You’ll be responsible for business development (which does not include the clients and candidates belonging to your former employer, right?). And you’ll have to do all the other things that come with running a business like bookkeeping, paying taxes, and dealing with service providers (website developer, telephone provider, ISPs, etc.). All of those things leave less time for making placements, which probably means less money.

3. Decide if you want to go it alone, purchase a franchise, or join a recruiting network. Starting a recruitment agency is a risky venture, just like any other start-up. There are different business models to consider, which can impact the risk:

Go it alone. Use your own knowledge and a “bare-bones” style such as a laptop and Skype from your home when starting a recruitment agency. This option allows you to be completely entrepreneurial and requires the least amount of upfront cash. It’s also the riskiest option, because you won’t have any support to keep your fledgling business moving. What if it takes 6 months to land your first client? A year to make a placement? Can you survive that long?
Purchase a franchise. A recruiting franchise provides you with infrastructure for your business, training, possibly software, advertising, market penetration, and other support. However, there is a very high cost of entry — anywhere from US $25,000 to US $200,000 — and you’ll be paying franchise fees (typically 5% – 9% of your gross revenue) every month. It can be difficult and expensive to leave the franchise if it’s not working out for you. It can also limit your autonomy as a business owner. If you like a corporate model with lots of training, a franchise can be a great option.
Join a recruiting network. There are formal and informal networks, free and paid. A recruiting network provides you access to candidates, jobs, trading partners, and peer support. All of these can make starting a recruitment agency a little easier. You can provide candidates for your trading partners’ jobs, or rely on partners to source candidates for your jobs. And it’s invaluable to be able to call up another recruitment agency owner for advice. Your partners will lift you up when you struggle and celebrate your successes.

Starting a recruitment agency is an exciting prospect with a high income potential. Do your homework, develop a great plan, and look for options that provide affordable support to increase your odds of success!

Independent Recruiters, Do Your Clients Insist Industry Experience is Required?

by Veronica Blatt

Today’s post is from Russ Bray with Southern Recruiting Solutions in Tampa, Florida. Russ is a two-time member of the NPA Board of Directors, as well as a long-time member of the network. Southern Recruiting Solutions specializes in placing professionals in the chemical, oil/gas, and manufacturing industries throughout the U.S.

As independent recruiters, how often do we hear from clients that industry experience is REQUIRED? A lot! Because of that I wanted to share with you a little detail about a split placement I just did. A trading partner placed a candidate of mine into a maintenance manager position with a chemical industry client of hers. What was interesting is my candidate had no prior chemical industry experience! She also told me she placed someone from the aerospace industry into chemical.

The candidate and I had talked about this during my initial phone screen. He had done some job searching on his own, talked to some other independent recruiters, and knew the scenario. Chemical and oil/gas companies would not consider his background because he worked in the steel industry. (Note: I’m not picking on the chemical industry. It just so happens that’s the area I’m working in currently. In my previous experience recruiting in information technology and aerospace/defense, I heard the same thing.)

Everything else about him looked good in my opinion. Good tenure, degree, reasonable salary, professional to work with and we both felt a lot of the equipment in the steel plant was similar to what is used in a chemical facility.

Well, kudos to my trading partner for giving him a shot. Her client saw the value in the candidate as well.

What makes this a more critical problem today? Earlier this year, NPA members listened to an industry speaker quote some Department of Labor statistics about the talent shortage. Some of you will also know what I am talking about. From now until about 2020 we are facing a shortage of professional personnel in the 6-20 million ranges. Share that with your clients next time you speak with them. Also let them know that other companies are making some concessions for this very reason. It’s a variation on the saying, “Don’t let perfect get in the way of good.” Lou Adler would say this is what is wrong with skills- and experience-based job descriptions, which focus on what a candidate HAS instead of what a candidate can DO. By helping clients define success based on performance instead of on skills and experience, independent recruiters might find a lot more opportunities for great candidates who come from similar – but not exact – industries.

Obviously there are jobs where industry experience is mandatory and you’re not going to change their mind. But in addition to listening to your client (regardless of the industries you work) remember that as independent recruiters your job is also to advise your client on whether their expectations are realistic. If the job has been open for six months, obviously there is a problem. A good question to ask when taking the job order is, “If I can show you a candidate that meets the vast majority of your requirements but comes from a different industry would you like to see him/her? This could allow you (the employer) to fill this position much quicker and stop the job vacancy from costing your company money.”

What is your experience with clients hiring candidates from a different industry? What do you hear from other independent recruiters? Comment below!

Agency Recruiting Under Counteroffer Attack

by Dave Nerz

Agency recruiting firms have long repeated the stories of employees accepting a counteroffer only to be fired weeks later. We have all heard the numbers. Eighty percent of employees accepting a counteroffer are gone within a year of accepting the deal. That doesn’t stop counteroffers from happening. More and more employers are using counteroffers as an active strategy. They have become aggressive during recent years.

At one time, many employers refused to make counteroffers. Instead they accepted the resignations and asked employees to pack up immediately. Where there was no competition to the recruiter, now there is an all-out battle with agency recruiting businesses. Companies are aware of the cost-to-hire, the cost of positions left vacant and most importantly how easy it is to offer a candidate a big increase that they will never fully payout. Employees are by nature willing to entertain the counteroffer as it means less change in their lives and if the employer is creating a perceive windfall, all the better. This change may be largely a result of the shortage of good employees. Employers, desperate to hang onto top talent in this tight labor market, have been increasing the use of the counteroffer. Yet experts agree, accepting a counter is typically a poor career move.

What are agency recruiters to do?

Those working the agency recruiting side of the equation need to prepare for the counteroffer on the initial candidate contact. Make sure you know the motivation for change and confirm it on every call to the candidate. The motivators are rarely just money. While the existing employer can beat the agency recruiter’s new job’s salary offer, they cannot effectively address poor company culture, bad managers, and the host of other reasons the candidate started a search with an agency recruiter in the first place.

What have you experienced? How many recent turn-downs are a result of a counteroffer? Are the wage increases significant? Have those accepting the counters stayed? How long? Do you see this in one industry or profession more often than in others?

3 Things Every International Recruitment Agency Should Do Right Now

by Veronica Blatt

In order to remain relevant with clients and job seekers alike, every international recruitment agency should do these three things right now:

1. Review your website on a mobile device. Google has recently announced that it will begin penalizing websites that offer a poor experience for mobile users. Since 57% of all job searches are being done from a mobile device, no international recruitment agency can afford a penalty from Google. What is meant by a ‘poor experience’? Lots of things, but particularly broken navigation or interior pages, as well as redirects from a mobile site to a ‘regular’ site. What’s the best way to tell if your site is as risk? Check it out on a mobile device or two. What to look for:

Does your site automatically resize and/or re-orient depending on the device?
Does the navigation still work on a mobile device? I have encountered many sites where the home page looks great on my Android phone, but when I try to use the menu to go to a different page, nothing happens.
If you have a mobile site, (one with an “m” in the URL, like m.domain.com or domain.com/m), are all of the pages included in your mobile version? Or do some pages link back to your main site?

If you notice that your site doesn’t perform as expected on a mobile device, fix it NOW.

2. Get a social media dashboard (especially if you are using Twitter). It’s hard to imagine an international recruitment agency that is not using some form of social media these days. Invest in a good dashboard to help manage the activity, especially if you are using Twitter. A social media dashboard is simply an organizational tool (software) to help you manage your social media activity. It can include features such as the ability to monitor one or more social networks, automate posting to multiple channels, schedule posts, and reporting/analytics to help you measure results. If you are using Twitter, a good dashboard is even more essential because the volume of Tweets can be overwhelming to follow. There are lots of great dashboards available. Here is a good blog on what to look for in a dashboard.

3. Switch your browser to Google Chrome. Google Chrome offers some powerful plug-ins that can be really useful for an international recruitment agency. A few to consider:

Brandwatch – Brandwatch is a social listening platform. It’s a great way to get a lot of data, fast, on what a particular candidate is doing/saying across the web. In other words, you can use ONE social media profile to find OTHER social profiles belonging to that same person.
WhoWorks.at – Let’s say you are looking at the website of a potential client. Click the WhoWorks.at icon and you will immediately see a list of all your first-degree LinkedIn connections who work at that company. Pretty nifty, right?
TalentBin – Similar to Falcon, but for recruiting in the IT/tech space. TalentBin drills down into sites like Stackoverflow and Quora, where techies are known to hang out. The downside is that you may need to pay for a premium account to access all the functionality.
PageMonitor – PageMonitor allows you to set up an alert that will notify you anytime a particular webpage you are interested in gets updated. How would you like to be notified whenever your clients updated their career pages?

What’s the best tip you can share from YOUR international recruitment agency? Add a comment below!

How Agency Recruiters Can Work More Effectively with Clients

by Veronica Blatt

Today’s post is courtesy of guest blogger Kimberley Chesney. Kimberley is the owner of Prime Management Group in Canada, with offices in London and Kitchener (Ontario). Kimberley is a long-time volunteer for NPA, currently serving as Chair of the NPA Board of Directors.

Why is it that clients are asking for so much information before they make a hiring decision? One of the frustrations agency recruiters have is working with clients who are slow to pull the trigger and HIRE!

When this type of thing happens, it is a good idea to learn something. For example, if this is a new client and you haven’t worked with them before, chances are, you don’t know much about their decision-making style. Many so-called hiring authorities are just one link in the chain of command and really have no sole discretionary powers to actually create the offer of employment. Unless you are dealing directly with the owner of a firm, you are likely faced with a situation where there are multiple inputs coming from different parties before the hire actually happens. Your contact may be asking people’s advice from inside as well as outside of the company. Suddenly, everyone becomes “recruiting experts” and they start adding layers of opinions, sometimes clouding and delaying the big decision.

A good practice is for agency recruiters to evaluate how decisions are going to be made before starting the search process. In a bureaucratic “cover your behind” type of environment, you will just need to breathe and take it one step at a time. Delays will happen. On the other hand, in an entrepreneurial environment where decisions can happen quickly, agency recruiters must be prepared to provide the required information in a timely fashion so the client can respond.

For example, how many of you actually do a Google or other type of internet search on the name of your finalist candidate? Sounds simple, but you can be sure those so-called recruitment experts are searching Facebook, LinkedIn, etc. and looking at what your candidate is all about. Agency recruiters who skip this step could end up in an awkward situation if the client finds out something before they do!

Successful agency recruiters never assume they are being paid to provide a name and a resume. A robot can do that. What are you doing to allow the client to make an informed hiring decision? When you send them that invoice for a nice big fee, will they look at it and say, “That was worth it,” or will they be left wondering, “What did I really get for that price?”

Stop and think about what you are actually sending your clients. Is it what they want and need or is it just something you think they should have? Too much or too little? You need to decide — and it will be different for each client!

Summer Reading for Independent Recruiters

by Veronica Blatt

I came across the following recommending summer reading list on SlideShare and wanted to share it with the independent recruiters who follow this blog. As an added bonus, each book also includes a recommended beverage. Yes, I know it’s winter in the southern hemisphere. It’s also currently 11:17AM US ET, but in the immortal words of Alan Jackson and Jimmy Buffett, “It’s Five O’Clock Somewhere.” Hopefully recruiters from all over the globe can find something interesting on this list.

From the list, I’ll be adding Blink by Malcolm Gladwell and Lean In by Sheryl Sandburg to my reading list. Independent recruiters will find other recommendations on a good range of topics and authors.

And in case you’re interested… as soon as I finish up the ~~bodice-ripper~~ romance novel I am currently reading, I’m looking forward to starting The Last Boy: Mickey Mantle and the End of America’s Childhood. You see, it’s summertime in Michigan. And that means baseball. Since nothing goes with baseball like an ice-cold beer, I’ll be enjoying a locally-brewed Bell’s Oberon.

Independent recruiters, what are you reading right now?

Books Every Recruiter Must Read This Summer [and Beverages to Consume Along] from LinkedIn Talent Solutions

5 Reasons eHarmony Won’t Threaten Agency Recruiters

by Veronica Blatt

So eHarmony, the popular online dating site, is developing a career site to match job seekers to employers. Puh-leeze. As far as I am concerned, agency recruiters shouldn’t spend even five minutes worrying about this new ‘competition.’ I’ve written before about how job boards compare to online dating services, and my sentiments haven’t changed.

Here are my top 5 reasons why eHarmony’s new endeavor won’t threaten agency recruiters:

1. Hiring is not dating. Sometimes you go on a date and realize there won’t be a second date. Sometimes you date for a few months and realize the relationship isn’t going anywhere. Many times (most?) when you break up, you never want to see or hear from the other person again. How does that make sense for employment? Most employers don’t want to hire someone only to hear, “It’s not you, it’s me” 3 months later. And most employers also don’t approach most hires with a “try it before you buy it” mentality. Applying a dating ‘strategy’ to the employment process really doesn’t make a lot of sense. Agency recruiters, on the other hand, cultivate long-term relationships with candidates BEFORE they have a job that is suitable. And they stay in touch with their “exes,” knowing that people move on and create new placement opportunities.

2. Really long ‘application’ process will turn off job seekers and employers alike. To use eHarmony as a dating site, users must currently complete a 250+ question profile. 250+ questions! Just to see if eHarmony will even accept you as a user! Now complicate it by factoring in the high probability that job seekers will be using a mobile device. 250 questions on a phone? Not gonna happen.

2. High rejection rate, which could be discriminatory in an employment context. According to some reports, approximately 20% of all people who try to use eHarmony’s dating platform are rejected as unsuitable. True, many of them are already married, which doesn’t bode well for a site that wants to help people find lasting relationships that lead to marriage. BUT, a significant number of applicants are rejected because the answers they give on the eHarmony profile are inconsistent or too hard to match. eHarmony believes that people who think a lot like each other are more likely to be compatible. Translation: eHarmony works best for black-and-white “yes/no” people. People who think “it depends” is usually the right answer are harder to match in this system. Lots of jobs require flexibility, creative thinking, and nuance — in other words, “it depends” answers. If it turns out that there are certain types of people who are more likely than others to be rejected because of the way they answer questions, this could potentially lead to discrimination-related lawsuits.

3. Lies and TMI (Too Much Information). People exaggerate or outright lie on both their resumes AND their online dating profiles. Savvy users have figured out the keyword game and know how to stuff their profiles with words they think others will search on. TMI is another issue, with some people “oversharing” and an increasing number of employers reportedly turning down candidates based on what they have posted on social media profiles. Agency recruiters struggle with these same issues, which can’t be solved (yet) with an algorithm.

4. Poor job descriptions / employers don’t know what they want. The best matches come when both sides to the party know what they are looking for. Unfortunately, many employers still struggle with poorly-written job descriptions that are based on what a candidate HAS and not what the candidate can DO. It’s the old garbage in, garbage out concept – if the employer doesn’t know what they want, no one will be able to find it, whether it’s an agency recruiter OR a service like eHarmony.

5. The people you want aren’t there. People who aren’t actively looking for a date OR a job probably aren’t using these sites. I don’t care how good the site is, you can only find the people who register.

Hiring is a complex process. It involves a lot more than comparing yes/no tick boxes on an online profile. Agency recruiters understand nuance and culture, which can’t easily be analyzed with software. If job boards haven’t put you out of business, this won’t either. Share if you agree!

Image courtesy of kanate / FreeDigitalPhotos.net

7 Guaranteed Ways to Kill Split Placements

by Veronica Blatt

NPA is a member-owned recruiting network that helps foster split placements. We’ve been doing this since 1956, so we have learned a lot about how to make splits. Today I’m devoting this space to the opposite side of the coin – with a tongue-in-cheek look at some actions you can take if you’re NOT serious about making splits. And if you *really* want to kill a deal, feel free to combine 3 or 4 of these all at once:

Hoard your best positions. One sure way to fail at split placements is by only sharing crappy jobs. When you get a great job – great fee, great salary, great company, great hiring process, great relationship with the hiring manager – keep that one all to yourself. Only let your partners ‘help’ you on the jobs that are the complete opposite.

Hoard your best candidates. When you get a rainmaker that’s a perfect fit for your partner’s job, hold out for an opportunity to place them on your own for a full fee. That way, you can up the odds that everyone walks away unhappy. Got a marginal candidate that you wouldn’t send to your own best client? Feel free to send that one along to your trading partner. Conversely, when you get a great candidate from your partner, be sure to present your OWN not-as-great candidate instead so that you can keep the whole fee.

Send speculative candidates that have not been qualified for a current opening. Nothing says, “I love split placements” like expecting your partner to do something with a candidate they didn’t ask for and doesn’t match any of their current positions.

Be paranoid. When you’re working on split placements, make sure you speak in code and withhold a lot of details, like the candidate’s name or the client’s name or the job location. Your partners *love* that.

Don’t return calls/reply to email. Providing timely, accurate feedback to your partner (whether on the candidate side or the job side) is really important when making split placements. If you want to kill your deal, it’s a good idea to avoid your trading partner.

Don’t make any proactive calls for help. When you have a job to fill, send out one email blast to everyone you know. Then sit back and lament the poor response. After all, email *always* gets delivered, and *everyone* loves being on an email distribution list.

Don’t have a 50/50 mindset. This can be achieved by expecting your partner to accept a smaller cut of the fee (20-25%) OR by expecting to receive half of the fee for doing way less than half the work. Most recruiters I know would be *thrilled* to have an arrangement that unfairly rewards one partner over another.

Recruiters who are successful at split placements know that “50% of something is better than 100% of nothing.” They openly share their best candidates and jobs, and treat their partners “fair and square.” My snarky comments are exaggerated, but these behaviors will — and DO — impede splits. What’s your ‘favorite’ deal-killer?

NPAworldwide Split Placements: What is HOT!

by Terri Piersma

NPAworldwide member-firms are part of a global network of recruiters working together to make split fee placements. 2013 is almost half over. In which niches/industries are our member recruiters making split fee placements? In other words, from an NPAworldwide perspective, what is hot!

The information shared in this post represents split placements through May 2013.

Placements of positions with US$90,000 and above salaries were 54% of total split placements
Placements of positions with US$100,000 and above salaries were 35% of total split placements

Top 4 Trading Groups based on the number of split placements, listed high to low. Click here to view industries/niches included in NPAworldwide’s Trading Groups.

Chemical Process

Cross Industry

Manufacturing / Mining / Construction / Supply

IT / Hardware / Software / Electronics

Trading Group with the largest percentage increase over 2012 based on number of split placements

Chemical Process

Overall split placements are down slightly compared with the number of split placements during the same timeframe in 2012. However, the number of positions with US$90,000 and above salaries increased compared to 2012 split placements.

What niches/industries have you found to be HOT in 2013? Please comment below, and share this blog with others.

Three Important Considerations When Starting a Recruitment Agency

Independent Recruiters, Do Your Clients Insist Industry Experience is Required?

Agency Recruiting Under Counteroffer Attack

How Agency Recruiters Can Work More Effectively with Clients

Summer Reading for Independent Recruiters

7 Guaranteed Ways to Kill Split Placements

NPAworldwide Split Placements: What is HOT!

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