All recruiters know that the market has been tough recently – so how are the industry’s main players responding to turbulent times?
The recent KPMG and REC UK Report on Jobs survey showed a continued decline in permanent and temporary staffing placements, alongside a fall in contract extensions, extending the current downturn to nearly two years. However, this reduction in hiring is not due to lack of employer demand. Following the Great Resignation, 1 in 3 UK employers are short-staffed due to recruiting challenges. When combined with chronic skills shortages in several sectors such as Tech and Engineering, client businesses need quality recruitment partners more than ever before. The opportunities are there: recruiters must compete to capture them.
Staffing SMEs lack the brand awareness, global networks and access to capital enjoyed by the largest and fastest-growing players dominating the recruitment landscape. Often forgotten is the journey of ups and downs that market leaders experienced to reach this privileged position. Here we reveal the journeys of three market-leading and fast-growing recruitment agencies: how they responded to economic downturn, how they beat the competition, and the learnings that start-ups and SMEs can apply to their own businesses.
The Secrets to Recruitment Success: 3 Ways Staffing Agencies Overcame Challenges to Grow Globally
- Hays’ Diversification Strategy
Recruitment Agency Growth Challenge: Balancing Short-Term Financial Need with Long-Term Growth
The past few years have not been kind to businesses across sectors: Xero recently found that 24% of SMEs struggle to pay bills due to cash flow issues. The ongoing hiring market downturn has exacerbated cash flow and business continuity challenges for staffing leaders across the UK, seeing once thriving agencies put growth plans on hold for yet another year post-Covid. When it comes to balancing short-term financial stability with longer-term revenue and profit goals, one international market leader springs to mind.
Over 50 years global hiring business Hays has grown to a workforce of 13,000 people across 33 countries with £105 million operating profit. Founded as the Career Care Group in 1968, several business acquisitions and investment-powered growth mean the agency is now listed on the London Stock Exchange and is a constituent of the FTSE 250 Index.
Solution: Diversification of Business Model
A carefully diversified and well-balanced business model empowered Hays to scale up quickly and sustainably in recent years. In addition to offering temporary, contracting and permanent recruitment across geographies, new revenue streams are created by complementary workforce solutions, including RPO, MSP, Talent Services and Project Services.
Hays operates across 21 specialisms including Technology, Life Sciences, Agriculture, Media, Education, Travel and Construction & Property. 57% of the agency’s FY23 fees came from Temp and Contracting assignments, with the remaining 43% delivered by Perm placements. 64% of fees were provided by white-collar, technical, project-led areas.
Hays strategically manages and measures this diversification to ensure every action is focused on customer service and revenue growth. The firm’s leadership set dedicated KPIs and goals to keep every business area aligned to financial return, and to identify and swiftly course correct any area that is not performing to refocus on revenue and profit. Current goals include:
- Increasing market share with existing and new clients
- Growing non-Permanent fees in new and existing markets
- Improving and developing a broader variety of services including DE&I, training, upskilling and total talent management
- Growing existing Project Services offering and revenue
- Driving structural growth in the most attractive long-term recruitment sectors, including Technology, Engineering and the Green Economy.
This breadth of expertise ideally positions the firm for resilience through economic, political and environmental challenges around the world and across industries. This protection extends to customers, who are guaranteed service continuity and are supported regardless of external factors. Guaranteed customer service maintains cash flow for Hays throughout the most difficult business circumstances, and retains the current customer base that will deliver future revenue.
How Recruitment SMEs Can Diversify their Business Like Hays
Diversification has many benefits when done correctly, including:
- Maintaining business continuity, current cashflow and future revenue with multiple fallback options if new products or markets fail
- Growing market share and achieving a competitive edge
- Spreading risk across products and markets to reduce dependency on any single income stream
- Differentiating and improving brand awareness with a truly unique service proposition.
However, diversification does not mean offering everything to everyone. American entrepreneur, Harvard Business School professor and Deloitte founder Michael Porter famously stated, ‘The essence of strategy is choosing what not to do’. Before attempting to deliver a wider portfolio of services or extend their business model, leaders must identify the business strengths that are truly unique and most valuable to potential customers. Staffing founders must take a step back to assess both the company and their markets from as objective a viewpoint as possible, to best predict what customers will need and where the agency is best placed to serve them.
Dirk Hahn, CEO at Hays, reveals of the company’s diversified approach, ‘Since becoming CEO, I’ve been working closely with our senior leadership team to thoroughly examine our business. We have spent considerable time developing our strategy and it’s taken a lot of preparation to get to this point. Our focused global strategy targets the many structural growth opportunities we see, while driving profitability through increased resilience, operational rigour, and enhanced execution.’
Although Hays operate with a variety of 21 specialisms, these are only applied where most valuable to customers and to the business itself. Hays offers on average 9 RoW specialisms per country, and even in Germany, where the company is the dominant market leader in white-collar hiring, offers only 10.
The global HR and workforce brand’s strategy is designed to fast identify ‘megatrends’ and capitalise on as yet unknown and unmet customer demand. Hays operates an agile business model that provides services both needed by customers and in the company’s area of capability. The firm takes advantage of opportunities in the market and creates complementary services to underpin quality main offerings. All service lines are strategically planned from the very beginning, and closely measured to manage costs and deliver tangible outcomes.
- Mason Frank’s Candidate Attraction Focus
Recruitment Agency Growth Challenge: Fierce & Ever-Growing Competition
With over 30,000 staffing agencies operating in the UK and over 200,00 recruitment consultants working across these agencies, recruiters are fighting to retain their existing client base, let alone even to get in through the door with new clients. As an especially competitive sector – zero barriers to entry for new start-ups, with consultants only needing a phone and a laptop to start trading – agencies are not only competing against the 470 UK recruitment enterprises with 250+ employees, but the 80% of the micro-businesses with fewer than 10 recruiters. Here’s how one recruitment agency beat the competition to go from start-up to large enterprise, in fewer than 15 years.
Established in 2010, Mason Frank has become the largest Salesforce-specific recruiter in the world, with over 300 recruiters working across 87 countries. Supported by Tenth Revolution Group parent company (which has only operated since 2006 and yet has grown to 1,800 employees with multiple brands worldwide), Mason Frank’s fast growth was due to one core focus: engaging the best candidates.
Solution: Best Candidate Attraction and Engagement
Half of their registered job seekers work exclusively with Mason Frank. Building a candidate base that won’t even consider the competition is a phenomenal achievement – but not a mystery, and achievable for others with the right approach.
Investing over $5million every year in candidate marketing and attraction, Mason Frank has also for the past five years sponsored Dreamforce, the world’s largest Salesforce event. A business model focused on a very niche core of candidates, and allocating enough marketing and advertising spend to attract them, enabled Mason Frank to reach this audience across the online and offline spaces where they already existed and slowly pull them into the agency’s orbit. Becoming the number one recruiter for these candidates firmly positions Mason Frank as unique amongst the competition, with an invaluable offering both for these candidates and for the clients who seek to hire them.
After attracting this audience, Mason Frank keeps their high quality candidates engaged by providing a high quality service. Specialising in the Salesforce niche means that every consultant and every support team member has highly specific knowledge of candidates’ daily working experiences and challenges. All processes are designed around candidates first, and clients receive access to the best skills in the market that no competitor can match.
The staffing agency enjoys a record ‘Excellent’ rating on TrustPilot with a 4.9 out of 5 stars score from 480 candidates. The exceptional candidate care embedded into the organisation is described by many reviewers, with feedback including:
- Decade-long relationship-building with the same consultant who secured several high paying, enjoyable jobs for their candidates
- Truly advocating for candidate needs and adjustments, and fighting for the highest possible salary
- Handling and winning difficult salary negotiations
- Taking the time to understand and match the needs of both the employer and employee, ensuring the most seamless transition and onboarding
- Promptly communicating detailed feedback after every interview round
- Providing invaluable insider insight into which companies are hiring, how and where, and transparent information on the employer, work environment and benefits to ensure the candidate were hired by a great company to work for
- Expert advice that genuinely helped candidates make pivotal decisions and improved their mental wellbeing at difficult points in their career.
How Recruitment SMEs Can Drive Candidate Care Like Mason Frank:
Mason Frank goes the extra mile at every point in the candidate experience, from before the first engagement to contracting and offboarding. Recruiters can offer the best possible candidate experience by taking a strategic look at their talent attraction and engagement process, mapping out every stage, and identifying gaps that require improvement to deliver the best candidate experience.
Small-to-medium staffing agencies can harness many elements of Mason Frank’s candidate attraction and engagement strategy to improve their own, such as:
- Prioritising long-term client relationship-building over short-term client acquisition, which grows their network over time and allows them to work with more client partners and end users than any other agency
- Cementing a position as the only dedicated provider of talent in a specific field, providing access to the largest volume and best choice of jobs in this field, and creating a network of unparalleled careers advice and support value to candidates
- Holding niche expertise of the candidate market means full understanding of candidate working goals and challenges, to deliver the most tailored and effective careers guidance
- Building key relationships with client Account Executives to closely and strategically align with every client. The agency can best brief every candidate on every role, to set them up for success at every stage of the interview process
- Providing detailed market data and insider information through resources including expert-led webinars, guides and reports to aid candidates searching for answers to professional questions.
- Michael Page’s Career Development Offering
Recruitment Agency Growth Challenge: Internal Talent Attraction & Retention
Although outsiders may assume that talent attraction comes naturally to recruiters, staffing agency leaders know that finding and keeping the best recruiters is a constant obstacle to business growth. The recruitment industry suffers a 43% employee turnover rate: almost three times the UK’s national average. Various factors underpin the problem, including the high attrition rate of inexperienced trainees due to the competitive nature of the sector, the constant rejection of a sales-focused career path, the cold desk start that awaits with every job change, and the common issue of top performers leaving to start their own agencies.
Although larger employers benefit from brand recognition and larger referral networks to attract recruitment talent, the leading market players attract and retain the best recruiters by significantly investing in internal training and development.
Michael Page has seen phenomenal growth since its beginnings in 1976. Starting up with just two team members above a laundrette, the global company now employs over 8,000 staff across 153 offices and 37 countries. One of the world’s best-known consultancies, the organisation is listed on the London Stock Exchange and enjoyed a recent gross profit of £444 million in half-year 2024.
Solution: Training & Development
The agency’s depth and breadth of training and development sets it apart in the staffing industry, creating competitive advantage by attracting and retaining high performing recruitment talent. Michael Page offers detailed career programmes for highly experienced hires that are tailored to each individual, as well as training for those who are inexperienced in the industry or indeed have never before worked in any professional role.
The agency’s industry-leading talent development strategy includes:
- Technical training that covers the whole recruitment process from end-to-end, alongside scenario-based training and focus on soft skills, management and leadership abilities
- A blended learning approach mixing live and virtual sessions enabling employees to access knowledge and training materials whenever, wherever
- Structured onboarding to help new starters not only understand the company and its systems and processes, but also enabling every individual to combine their own strengths with the company’s resources to set themselves up for success
- 6-month personal development programmes for all new joiners which include face-to-face workshops and careers coaching
- Internal programmes supported by accredited and globally recognised leadership development courses, such as MBTI profiling and Franklin Covey
- Making learning fun and accessible to everyone at all levels and from all backgrounds through gamification, e-learning, video, group discussions, infographics and interactive materials
- Clear and detailed progression structures for every employee at every function and experience level.
How Recruitment SMEs Can Acquire Internal Talent Like Michael Page:
Managing Director Andrew James personally embodies the Michael Page career development ethos. James started his career with the firm when he first became a recruitment consultant in 2002, and has never left, instead moving his way up the ladder quickly, becoming a Regional Manager after two years, a Director four years later, and developing into a Managing Director role since 2013.
James reveals what awaits recruiters joining the company, ‘Get ready for a change in pace; your career will move at 100mph. It is a meritocracy: those that are best at what they do progress quicker; it’s not about time served. Your hard work, determination and success are rewarded with promotions and bonuses; you literally get back what you put in. It’s a fantastic journey and very rewarding both financially and through personal recognition. Imagine a role where you look forward to going to work every day with like-minded, successful people; that’s been me.’
Recruitment leaders can emulate Michael Page’s focus on career development to create high-performing consultants who not only stay and grow with the business, but help to attract, develop and retain other high performers. A competitive learning and development programme for staffing specialists can include:
- Coaching – Investment in developing the personal skills and knowledge of recruiters, such as confidence and communication, to underpin professional abilities
- Communication – Weekly 1-2-1s with line managers to continually revisit and update Personal Development Plans, regular written feedback complementing verbal feedback and documented career progression needs to keep development front of mind and on track
- Management Training – Ensuring that every individual with management responsibilities provides the ultimate training, coaching, mentoring, support and positive working experience for those in their teams
- Continuous Improvement – Quarterly appraisals to clarify strengths, identify areas to address with the support of line managers and coaches, and plan how to achieve employees’ personal and professional goals.
How to Grow Your Recruitment Agency in 2024
All recruiters know the market is tough, but the best client attraction method for 2024 has remained a mystery – until now.
Generate surveyed 223 CEOs, Managing Directors and Business Leaders who are looking to hire this year. In our research report, client audiences shared what they’re really thinking about skills and employment this year, and what they really need from recruitment agencies. Push past hiring freezes to tap into your clients’ real needs and get more customers in 2024: view the free report.
