Sector review

Each sector will have its own foibles. It is important that you constantly review your sector bias. Do the returns match your expections? Are you struggling to find good candidates for the roles you take on? Are your pay rates in the upper quartile? 

Finance review 

Review your clients against gross profit, turnover, gross profit margin, and service requirement. 

Conducting a review of your margin should alert you to any clients that are below your minimum margin. Make sure you know what your walkaway points are.

Service update

Reviewing your portfolio will give you the opportunity to assess your service to date. This review should highlight any areas of service failure. Your most demanding clients are usually the ones where you get least return. Prepare to walk away from clients who are too time consuming and derive the least margin. 

Strengthening the Relationships Service Level Agreements (SLAs) 

If you have any clients where the service you have supplied has been of a high standard, it may be time to formalise the relationship (if it’s not already). The benefit for you is the ongoing relationship and income potential, and the security of a long term commitment from the client. The benefit for the client is that on a quarterly basis, you can outline and review the service they have received.

Remember, it is likely that any client you are supplying will also be heavily targeted by your competitor agencies. So have these conversations as soon as possible.

Do not fall into the trap of giving this role to a junior consultant. Of course, ask them to do the groundwork. 

Your new business development consultants can focus on the research, contacts, competition, and new companies moving into the area. You can make the call after your new business executive has qualified a prospect. 

Business development is difficult - and if you are pitching to a client, they will expect you to know the market and the sector, so qualifying the prospective client is key. Total focus on new business will give better rewards.

Today’s prospects are more knowledgeable about agencies in general and their offering. Make sure that you have a credible and comprehensive presentation to send them following your initial call. Remember, the target client is taking at least 3-5 calls weekly (if not daily) from your competitors, so be prepared, make sure you understand their business, sector, and issues.

It may take up to 3-5 calls before you reach a decision-maker within that business. Make sure that you have done your research, i.e., who they currently are using, what are their weaknesses, do they have a backup supplier. 

Ask the client for the opportunity to review the incumbent agency service and produce a report, for the client to review.

Your business has established itself and now you would like to see GROWTH.  

But growth means different things to different companies. You should decide which areas of your business are the most critical and which are you going to scale and grow. This will help you focus your resources and efforts.  

Each of the growth options will have different outcomes. For instance, driving your turnover may reduce your profit line. Growing your headcount will increase your cost base and reduce your profit in the short-term but it might lead to larger gains long-term. 

When you have decided your direction of travel, conduct a thorough risk assessment and outline your mitigation actions for each option. Remember to review your strategic plan for guidance and reflect if your decisions are in line with your initial plan and thinking.

Growth options to consider: 

1. Grow your turnover 

2. Grow your gross profit line 

3. Grow your gross margin % line 
4. Grow your service offering by adding temporary or permanent placements or retained business. 
5. Grow your headcount 
6. Grow your number of locations/offices 
7. Grow your market share or expand into a new sector 
8. Growth in finance /investment to grow the business 
9. Grow your management structure 
10. Growth through acquisition  

Providing additional services, like Outsourcing could be pivotal to scaling and growing your business.  

Often smaller recruitment businesses think that expanding their service portfolio is not worth it, as they would not be able to compete with the larger agencies in the market, however this could not be further from the truth. Small businesses are more flexible and can offer a more unique service to clients, giving them a competitive advantage in the market.  

Offering RPO (Recruitment Process Outsourcing), MSP (Managed Service Provider), and/or SOW (Statement of Work) services could help you not only increase your bottom line, but also allow you to become an integrated strategic business partner for your clients. Furthermore, it can serve as a safety net for when changes emerge in the market or sector that you’re operating in, and you need a new way to sustain your business.  

Learn more about Outsourcing Services on our dedicated page; our specialist in designing and selling business annuity can provide specific business advice as well as deliver tailored training to your teams to help you capitalise on these initiatives and maximise your return.

Mergers and acquisitions are exciting for everyone involved. 

But a successful merger or acquisition comes together as a result  of ensuring that the staff are engaged during the entire process from start to finish. 

Listen to Sarah Cook as she outlines her top tips for her merger and acquisition people strategy. 

Start with the people 

• Involve the staff as soon as you are able  

• Remember people do not fit into boxes 

• Engage the work force as soon as possible. 

• Adopt best practise, from whichever company has the best procedures  

Communicate, communicate, communicate 

Whether that is by, video, monthly newsletter, monthly QA conference call email. Develop a new culture, for the new organisation.  

Find out more about our business partner WeDo and their offerings. 

This article was originally published on www.cips.org/supply-management/ in April 2017.

According to Matthew Sparkes, head of financial services at Crown Commercial Services, procurement is all about being systematic and methodical to identify a source and manage contracts. He shared his six fundamentals to buying in the right way with executives with purchasing responsibilities at the Procurex conference in London.  

1. Identify what the customer needs

It’s all about what the customer needs. It’s imperative to identify this early on and separate it from what the customer wants. If you fail to understand the need, you will get it wrong no matter what you do.

2. Look outside your market

Great procurement teams can provide alternatives, not only because of their understanding of the customer needs but also because they understand what options are available. Buyers should be always on the look for innovation, even if that means stepping outside their market.

3. Prioritise relationships

Good contracts are exactly that. It gives you what you expect to receive and it’s imperative to regularly check suppliers are meeting contractual obligations. According to Sparkes, cultivating the relationship is what goes the extra mile, as it will act as a foundation for growth and innovation. However, a good relationship takes time to build, so think about which suppliers are more important to your business and how this could change in the future.

4. Collect spend data

No surprise here, after all, we are in the world of big data. Spend data is the most powerful tool buyers have. It can help them cut costs by providing insight on what they buy, who they are buying it for and the frequency of purchases.

5. Transparent communication

When going to tender be clear about everything you are planning to do in your procurement. Be explicit on where you are at in your tender process and what your market strategy is. If want to work well with people, you need to bring them on that journey, and it all starts with the first engagement.

6. Know your negotiating position      

Before engaging stakeholders in negotiation, be upfront about your position, including boundaries, red flags and walk away points. It’s about honest reflection on what your input in the negotiation is. This will empower you and help things go a lot smoother from the start. 

In 2015, almost all the world’s countries pledged to limit global warming to “well below” 2C above pre-industrial levels and to strive to keep temperatures at 1.5C by the end of the century as part of the historic Paris Climate Agreement.

This was followed by Cop 26 held in Glasgow where countries revisited the pledges made under the Paris Agreement.

What does COP stand for?

COP stands for "Conference of the Parties",

The good news is:

More than 130 countries have pledged to reach net-zero emissions before 2050.

But the bad news: China - currently the biggest producer of CO2 in the world - says it's aiming for "carbon neutrality" by 2060. China has not as yet set out how it is going to achieve this target.

What can I do?

Every person in the world can help head-off the catastrophe that is global warming. More clients are looking at what “green” means for their business in response to social changes and interest. And

candidates are increasingly clear that they want to work for a business that has an ESG (environmental, social, governance) strategy that chimes with their own personal values.

The government have given us clear targets to achieve - the UK enshrined into law a new target to slash emissions by 78% by 2035.

What are the opportunities for the recruitment sector during this period?

The government is going to create more green jobs, giving the recruitment industry a new sector to target.

The Green Jobs Taskforce was launched on 12 November 2020 to set the direction for the job market as we transition to a high-skill, low carbon economy.

The green jobs task force is tasked with the support to create two million jobs by 2050.

If you run a business, you should review your current carbon footprint

The Government’s stance is that acting on climate change will help businesses grow, seize new opportunities, create new jobs, encourage investment, and adapt against the challenges of a changing planet.

You can:

Complete a waste audit on your organisation or team to establish where you can make savings by becoming more efficient.

• Ensure it is easy to recycle at work, provide the bags and bins for your colleagues, mark the bins so people are 100% sure they are putting the right waste in the right receptacle.
• Choose recycled products, for instance paper, and provide reusable cups and glasses for staff rather than disposable ones.
• Recycle: all types of paper including newspapers, magazines, phone books directories, and mixed paper; photocopier and printer toner cartridges; e-waste: TVs, computer monitors, printers, scanners, keyboards, mice, cables, circuit boards, lamps, clocks, flashlight, calculators, phones, answering machines, digital/video cameras, radios, VCRs, DVD.
• Recycle old office furniture including whiteboards chairs and desk.
• Reduce – by making less waste and managing it more efficiently. Reducing the amount sent to landfills will benefit the environment and reduce your costs and therefore improve your profit.
• Consult train and educate your staff to follow the green agenda in terms of waste reduction.
• Review your supply chain for opportunities to reduce and recycle.
• Remember to ask suppliers to take back bulk packaging for re-use.

Further opportunities to reduce waste:

• Use electric vehicles instead of petrol and diesel and hybrid as a last resort.
• Focus on the use of electricity from renewable sources – this will lower your carbon emissions and prepare your organisation for tighter environmental laws.
• As a result of Covid, working from home has become easier. In this digital world we have been using Zoom and MS Teams which has reduced how much public transport we use.

Every year, unless you have a car under three years old, your car will require an MOT to determine if the car is roadworthy and safe. If it is not roadworthy you will have to have the car fixed or replaced. 

You should apply a similar approach to your business finances. Our partner, Stephen Fleming, has created a Financial Health check for recruitment businesses to “test the brakes and check the tyres”  so to speak. 

You may already have a profitable business which is performing well, but it is essential that you periodically check and test your procedures and processes.

Anyone who has worked in recruitment will tell you there is plenty that can go wrong! Here are some of the real-life examples encountered by one of our directors who worked for one of the UK’s largest recruitment agencies.

• Shortage of cash: look at invoice financing or invoice discounting provided you have appropriate protections in place  

• Debtors’ days growing exponentially: consider using a debt collection agency 

• The client has backdoored one of your candidates (No fee paid): you may need to seek legal advice and support 
• One of your workers has had an accident and the client is blaming your agency: check your contract with the client to determine whose is responsible and that your client has the relevant insurance cover in place 
• The client refuses to sign the agency worker's timesheet: you must make the necessary enquires and remember your obligations under the Conduct Regulations
• One of your agency workers has complained that the Umbrella company has not been paying any holiday pay: Contact the Umbrella company to rectify the situation 
• One of your clients refuses to pay their bill, as a result of poor workmanship: check the contract with the client, visit the site to assess quality and discuss the situation with the client 
• One of your clients is at risk of defaulting or has cash flow issues themselves: do you have suitable credit insurance? Are you regularly checking the Credit Rating? 

• Your Agency worker is asked to drive a forklift truck – Check if they have the appropriate license and insurance  

• One of your agency workers has lost the keys to the tool store – Visit client to discuss and resolve the issue  

• One of your clients refuses to pay their bill, as a result of poor workmanship – Check the contract with the client, visit the site to assess quality and discuss the situation with the client 

• One of your clients is at risk of defaulting or has cash flow issues themselves – Do you have suitable credit insurance? Are you regularly checking the Credit Rating? 

• A group of your workers looks like they are being picked up and dropped off to work, keep to themselves, and are very shy around managers – Is this a sign of forced labour? 

All the above are real-life scenarios with legal or commercial ramifications, being an REC member means you have support when you need it.  

Our business partners provide REC Corporate members with a range of discounted services, from insurance and healthcare to software and debt recovery. Business partners have been selected for their ability to provide relevant, quality services to our members.  

Contact our Recruitment Law Experts via the legal helpline which is available exclusively to our REC Corporate Members. 

If you’re not already an REC member, join today and enjoy the wealth of benefits the REC can offer you. 

Disclaimer: All information is provided purely for information purposes. It is not intended as a substitute for special legal or professional advice. Should you decide to act upon any information on this website you do so at your own risk.

A good umbrella company will offer simplicity and a guarantee of compliance with all the relevant legislation to the recruitment agencies they partner with, and to their contractors. The umbrella solution is the simplest solution for your contractors - all the freedom and flexibility of contracting with the rights and benefits of continuous employment and no unexpected tax bills. You’re fully insured, with statutory benefits including sick pay and holiday pay, as well as a workplace pension. 

In this video, hear from REC Business Partner Liquid Friday on how to work effectively with an umbrella company.

With the UK’s departure from the European Union, immigration to the UK and conducting right to work (RTW) checks has become a key talking point for many employers. By law, all companies are required to check and retain evidence of an individual’s eligibility to work in the UK; failing to comply with the legislation can result in significant fines to your business. You can find more information around the Home Office’s guidance on conducting RTW checks here.  

Our team of recruitment law specialists continuously monitor the changes to recruitment legislation and provide timely, comprehensive guidance to our members. For your convenience, we’ve compiled a list of FAQs around RTW issues.  

During the pandemic, physical RTW checks have been temporarily adjusted by the Home Office to be carried out remotely to support jobseekers and employment businesses. The REC team and others have extensively campaigned to extend and make digital right to work checks permanent, and through the collective efforts the Home Office has delayed the return to physical right to work checks until 5 April 2022. Our efforts do not stop here, and the REC will continue to push for change. You can follow our latest press releases here and support our campaigns. 

When employing new staff or sourcing candidates for your clients, businesses need to be careful to not unlawfully discriminate, or to not treat someone unfairly or unequally. Many recruiters or hiring professionals can unintentionally discriminate against a certain group of people by using inconsiderate language or stipulating requirements that put them at a disadvantage. 

Employees, workers and jobseekers are entitled to protection under the Equality Act 2010. There are 9 “protected characteristics” that you must not discriminate against:  

1. Age 
2. Disability 
3. Gender reassignment  
4. Sex 
5. Sexual orientation 
6. Marriage and civil partnership  
7. Pregnancy and maternity 
8. Race  
9. Religion or belief 

It’s important to note that there are a limited number of occasions when the nature of the job requires employers to choose one candidate over another based on their protected characteristic, however this must be a necessity (legitimate aim) and not a desired option.  

Equality legislation is complex and risky, and companies need to ensure that proactive measures are taken to understand and eliminate biases. This means making sure your recruitment policies are robust and inclusive, as well as your staff having appropriate training and support.  

Our team of legal experts has created a comprehensive overview of the Equality Act and FAQs for recruiter obligations.  

You can read more about the Equality Act 2010 guidance here. And, to further expand on your knowledge around your legal obligations in recruitment we recommend attending our comprehensive REC Recruitment Law and Compliance training.  

Disclaimer: Please note that this information is for guidance purposes only and should not be regarded as a substitute for taking legal advice.  

Marsh, our business partner outline several scenarios which are as a result of growth and expansion. A new sector offering may require additional insurance - Medical Malpractice insurance, for instance. 

• If a client is increasing the number of workers, they may have to review the cover in place. 
• If you decide to add temporary workers to your service offering you will need to increase your cover. 

Exercise caution when accepting clients’ terms and be wary of any indemnities they ask to accept. 

Having the correct insurance is an important component of running your business. 

The recruitment sector is becoming more adept at utilising data-driven tools. This is crucial and presents an opportunity for the sector to improve its efficiency and processes. However, there are also significant challenges, with high-profile cahttps://go.targetrecruit.com/l/978053/2022-09-28/98912rse studies highlighting the risk of discriminatory and unfair results if these tools are not designed and used with care. 

The CDEI’s review into bias in algorithmic decision-making highlighted these issues and recommended that guidance be developed to help recruiters make informed decisions on their use of data-driven tools. This aims to provide recruiters, who are looking to take advantage of data-driven tools, with the mechanisms to effectively evaluate and responsibly deploy them. And in the process ensure, that they take  appropriate steps to mitigate risks and maximise opportunities.  

This guidance has been developed jointly by the Recruitment and Employment Confederation (REC) and the Centre for Data Ethics and Innovation (CDEI). It brings together law, standards and principles relevant to the use of data-driven tools in recruitment. The aim is to help the industry to take a more holistic approach when utilising data-driven tools. This is inclusive of legal frameworks, such as UK data protection law and equalities law, as well as walls and industry guidelines around recruitment, including the REC’s own code of practice. Both the Information Commissioner’s Office (ICO) and the Equality & Human Rights Commission (EHRC) have also indicated that they plan to update their regulatory guidance in this area. 

The CDEI is an expert government body enabling the trustworthy use of data and AI. More information about the CDEI can be found on the CDEI web page or by contacting cdei@cdei.gov.uk. 

Check out this ebook from our partner TargetRecruit on key considerations when choosing an ATS solution. 

Summary of recommendations 

This table summarises the guidance provided in the rest of this document and is particularly applicable for tools procured for the sifting and interviewing stages of the recruitment process. For more details and explanations, please see the full guidance below. 

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Recruiters do not want to spend their working days entering data into the CRM. Integrated AI can automate some of the more repetitive tasks, such as CV screening and interview scheduling, allowing your consultants to focus on business development.

AI can help create a tailored user journey that will elevate the quality of services you provide and increase your bottom line through addressing the specific needs of your customers. More advanced AI’s can use data analytics to predict how successful a candidate can be for a selected position.

Scoping what your business needs (or could benefit from) and understanding what functionality your existing CRM has to offer is the first step in ensuring a smooth adoption of tech across your business. Take the time to learn about the latest technologies, and consider bringing in an expert to suport. 

Getting your people involved in the early stages of discovery and implementation, as well as providing comprehensive training is important to get the buy-in from the wider business. If you’re not relying on external IT support, at least one of your staff should be trained as a superuser, as they will become the focal point for all technical and software related queries for your personnel. 

Esignatures is one such solution that can be integrated with internal systems and CRMs to make the signing process automated and more seamless. Our partner RSign share their top tips for choosing an e-signature solution PDF checklist.

Bringing new talent onboard can be time consuming and an expensive process. A typical fee can be anywhere from £3000-£5000 depending on the experience of the consultant.

The cost does not stop there, as it is not unusual to give a new consultant a guaranteed commission for three months or longer, depending on the role or complexity of the task at hand. It is therefore imperative that you have a sound onboarding process for your new team member. 

Below is a outline of phases that you should take the new starter through. A robust and comprehensive induction programme helps improve new employee satisfaction and retention, and can help them to get up-to-speed quicker.The onboarding process starts when the candidate accepts the role.

End to end onboarding process

As a reputable employer, you should go through the following phases in your onboarding process: 

• Pre-onboarding: This step allows you to create an initial positive first impression with the new employee. During this phase you may want to share some literature around the company and/or invite the individual to meet the team in an informal setting. This will help to assimilate the new starter into your company culture quicker.  

• First week: Use this time to set them up with their equipment, define objectives, create a clear training plan and allow them to meet the wider teams within the business. 

• Month-1: Assess their progress on objectives, find out how they’re fitting in, how does the role fit their expectations and address any potential concerns that they may have. 

• Month-3: Review their performance and identify any additional training needs, as well as ask for feedback to help you improve your onboarding processes. 

Upon successfully passing their probation, make sure to celebrate this achievement – there is nothing greater than sharing even the smallest of successes with your whole team.

A key part of your growth is the recruitment of your first employee. Jump outline the steps of a successful recruitment process which includes making sure that you your candidate shares the company’s values. The goal being to maximise the opportunity both for the company and the individual. 

Human capital

Your people are your most important asset. This is something referred to as "Human capital". 

Human capital is an intangible asset. It is not listed on the balance sheet, however, it covers the skills, knowledge, and experience that is required to run your organisation. People run companies, give the values to the organisation and drive the culture. Good companies recognise and reward their employees because they recognise the importance of this asset. 

Building a culture

One of the challenges that buisesses face when trying to grow, is the need to hire new people. Established buisnesses often have clear a clear company culture and ethos, which can help to attract new employees. If you haven't worked on your culture, you may find it more difficult to aquire the talent you need. Find ways to demonstrate the purpose and values that your organisation stands for, by articulating your vision on your website. 

How to increase staff retention 

As a recruiter, you wil know more than most about the reasons why people leave their jobs. Often it's not about the money, it's usually down to how they have been treated – this is likely to revolve around their personal development and other opportunities made available to them.

Feeling unfulfilled or unappreciated will trigger people to look elsewhere, and once they are open to the idea of moving, they are likely to find that more lucrative roles are avaialble.

Here are some simple solutions you can adopt to increase staff retention and create a more positive culture:   

• Give employees a holistic view of the organisation’s strategy so that everyone understands the aims at a top level but also the opportunities available at a personal level

• Provide company updates regularly so employees are aware should opportunities change, or new ones arise   

• Offer frequent development opportunities for employees, better yet allow them to have a say in what type of training they need  

• Provide clear objectives, that way they will know what they are aiming for. Reward them accordingly. Every team member should understand what they must do to achieve the next rung on their career ladder

• Offer communication at every level – in addition to frequent company meetings, line managers should have regular one to ones with direct reports, so that concerns or aspirations can be shared. Employees must have a voice, and they need to feel that the organisation listens to them  

• Treat employees with respect – enabling employees to work from home or around their schedule is a huge incentive. Give them the tools to get their job done and then give them the freedom they need to make it happen

• Make sure that everybody in the organisation has a personal training and development plan

“Hire for Attitude, Train for Skills”  

- Herb Kelleher 

Training is a key component of your business!

Benefits of training employees in a business

• Training will demonstrate the investment by the company in the individual.

• Commitment to training will help you attract and retain the best candidates.

Make sure the training fits your requirements, whatever that is and you have Personal Development Plans for all your employees.

Remember training should complement your strategic objectives and plans.

In this video, Sarah Gordon talks more about training: ​​

Recruitment is a very competitive market, and every business wants to have the best people on their team.

A fair and generous commission or incentive scheme, whcih rewards consistent performance and effort, can help you to hold on to the people who will achieve and exceed financial targets. 

It is not uncommon for consultants to have a car allowance, gym memberships, or high salaries and commission schemes.  

Bonus and commission 

A bonus is usually paid when a particular target is achieved, i.e., a gross profit target, or as a way to encourage staff to stay with your company. For example, you could pay a bonus after a determined period, if targets or objectives are met.

Commission involves paying a percentage of the contract revenue or perm fee to the consultant. It’s usually paid monthly. 

The schemes differ based on what a company is trying to achieve.    

• If you are a New Business consultant, you may receive commission based on the number of new accounts you acquire or a percentage of the revenue.  
• If you are an Account consultant, you will be running a portfolio of accounts which will have a target for the year, and you will receive a percentage of the total revenue achieved. 

One of the fundamental principles of any commission schemes is allocation of a base cost being covered before any commission is paid to the colleague.

New starters/new sector development  

Most recruitment companies recognise that they will have to support a new starter or sector development for the first few months. To that end, they may offer a guaranteed commission. 

Some companies offer commission from £0, i.e., no base cost to cover, during the initial period. They will then pick up the base cost or Standard Requirement and receive the standard commission scheme.

Is your company truly inclusive?  

• Do you offer flexible or remote working, so employees are able to balance their career with free time, parenthood or passion projects?    

• Do you allow time-off for religious celebrations beyond Christmas and Easter?   

• Is your benefits package built for anyone to enjoy? (Where a golf club membership may be enjoyed by a few, a gym membership can be enjoyed by many, for example).   

For your diversity and inclusion plan to have real meaning it needs to be measurable. It can't be an empty promise, the organisation needs to be held accountable for any progression to be actionable.      

What metrics can you set to quantify your success?   

Would you like to:   

• Increase the percentage of female candidates in construction by 10% within 6 months?   
• Increase the percentage of senior BME candidates in your sales team by 15% within 12 months?   

Remember, creating a diverse and inclusive workforce will give you a competitive advantage.

Thankfully we are seeing people returning to work. 

We must however be aware of the mental health challenges that our colleagues have endured during the pandemic. 

How can we help? What can we do as employers? 

The most important thing is to communicate with our employees. 

Ensure each of our employees can discuss any concerns they may have returning to the office environment. 

It is important that we give the time to get used to the environment again, notwithstanding many companies will be using a hybrid model of working. 

It is important that we remain flexible and continue to communicate.

Find out more from our partner Howden on what we can do to support employee mental health.