When you hear the word “downturn” or “recession”, it’s quite probable you’re getting worried and start looking at ways to cut down your budget. After all, times like these are uncertain, especially in the recruitment industry. But there are some amazing businesses that started during a downturn - and succeeded on a great scale. Take the Adecco Group, Huntress, Satigo, and Cummins Mellor just to name a few! So, with the economy currently in a fragile state, why do we believe now is the right time to start your recruitment agency?
There are various upsides to running a business in a downturn, and although they’re not as widely talked about as the downsides, smart business owners can find opportunities everywhere. We all know that interest rates are rising so it might be harder to get a loan to get started, or that some of the providers are rising their fees. Nevertheless, if you do it right, starting out during a downturn can actually lead you to achieve amazing success in the long run. Here are some of the top reasons why starting a recruitment agency in a downturn isn’t all bad:
You can find better-qualified candidates for your clients
In times like now, when even the biggest companies are asking as much as 18% of their employees to leave, there’s a lot of top talent just waiting to be placed in a new role. Doing as little as digging into redundancy lists can give you a whole new pool of qualified candidates with no effort. It’s almost like having your own talent pools outside the CRM!
More qualified talent makes it easier to make quality placements, which not only increases your revenue but also helps you maintain a bulletproof reputation. After all, it’s not just about making placements but also about finding the perfect fit for the role. Having your pick among all of the recently laid-off candidates will help ensure your clients are getting the best of the best.
It forces you to focus on structure – and win in the long run
During a downturn, you need a bullet-proof budget strategy. Everything you do is more calculated and balanced. The banks are more hesitant to lend money and interest rates are through the roof. What does that force you to do? Come up with a solid business plan to show every penny you plan on spending is through-through and probable to bring back a return on investment!
All the great businesses that started in a downturn, such as giants like Microsoft or Netflix, learned to have an almost military regiment approach towards growth. It means knowing what noise to cut out and which things to focus on – and that’s a skill set that you’re forced to learn really quickly during a downturn. Once you do, you know straight away what makes your business tick and how to best develop it, which is crucial to creating a successful company, downturn or not. So take this opportunity to learn and adapt – you’ll be way ahead of your competition.
If you’re thinking of working on a contract basis, you also need to plan where the money for all your placements will come from. Firefish just partnered with Sonovate which lends money to contract recruiters, so the cash flow stays intact. All Firefish clients will be able to get loans at a discounted interest rate of only 2.85%! Making sure you have all of the bases covered with your budget is crucial to surviving a downturn and coming out of it stronger than your competitors.
Agile business – less red tape against established business
As a start-up agency, you actually have a lot of advantages against some of the more established businesses, especially during a downturn. With no or few staff members, products, or software you’re using your processes are a lot less complex and drawn-out than those of a bigger agency. This means that your time to place is shorter – and cost per placement lower.
You can use this as a selling point when negotiating with clients or talking to prospects, and even whilst making placements! A lot of candidates appreciate a quick and effective application process – over 71% stated that they would close the application if it took longer than 15 minutes to initially fill in! You’re at a major advantage here, so don’t waste it.
If you thought that there are no new opportunities in a downturn, you’re wrong – just need to know where to look. Tough times like these is when innovations come into play – everyone is trying to think of solutions to the piling problems, so some of the best business and technological ideas often pop up. We at Firefish took this to heart and during COVID times, when so many recruiters were being made redundant, we came up with a campaign called ‘Get Back in the Fight’. This involved a new package directed specifically at those recruiters – which resulted in 10% user growth in the end.
These kinds of creative solutions wouldn’t have come to anyone’s mind if there was no need for them. Downturns tend to create unexpected possibilities and needs that need to be fulfilled – which triggers our thinking and gives us opportunities.
As a Senior Marketing Executive, Martha keeps all our written content on point, sharing the latest tips and updates from the recruitment industry.