Taking on new business is one of the biggest thrills of running a recruitment agency – particularly when your recruiters are working a job-short market.
But taking on new clients is inherently risky, and with Covid-19 wreaking havoc on the economy, the risk has only increased.
So how can you protect your agency from any worst-case scenarios of taking on a brand new client?
This four-step process below will ensure you cover all bases before making any commitments.
Step 1: Do your research
It’s likely your recruiters have developed a nose for identifying ‘big winner’ prospects in their niche, but do they know how to look for tell-tale signs of a client who could pose a risk to the business?
It’s important that they know how to identify potential risks before any terms are signed, or better still – be able to spot a prospect that’s not worth targeting in the first place.
To do this, your recruiters should always check the following:
- Sites like Glassdoor, Google My Business, Facebook and LinkedIn to see if they have any particularly bad reviews
- Running a google news search to see if any financial troubles have been made public
- Searching for the prospect on Companies House to see if there have been any previous insolvency issues.
If your recruiters make identifying risk part of their BD process, they will save themselves a lot of time they could be wasting on prospects that will never deliver a fee.
Step 2: Protect yourself in your Terms
List out a series of ‘what if…’ risk-based questions that cover every possible worst-case scenario of working with this new client.
It’s likely these questions will be quite different depending on the client and whether you’re going to be working a retained or contingency contract.
- What if the client goes bankrupt before we get our fee?
- What if the client doesn’t pay on time?
- What if the client dismisses the candidate within a month of placement and want a refund?
- What if the client is unhappy with our services and wants to cancel the contract?
- What if we as the agency want to cancel the contract?
You can then use these questions to ensure every possible eventuality is laid out in your terms, protecting your business from any worst-case scenarios.
Step 3: Run a credit report
Just because you’re dealing with a large or well-known company, doesn’t mean they’re guaranteed to have good credit. Therefore, it’s important that you use a CRM that comes with a Company Compliance feature so you can clearly see any companies in the sales pipeline who haven’t yet had a credit report.
This should make it instantly clear to your recruiters which prospects are risk-free and which ones should be avoided when canvassing for new business.
For example, a company could be flagged as having ‘Bad Credit’ or that their record is ‘Incomplete,’ meaning no one has run a credit check on them yet.
At Firefish, we know how important it is to protect agencies from working with clients that have bad credit, so we built an additional option within our Compliance feature that blocks recruiters from being able to work a job unless that client has been tagged as ‘Good to go’.
Step 4: Sell a service package that minimises risk
In this client-driven market, it’s a good idea to re-package your services to suit your client’s particular needs as this unique approach will help you win business.
An added bonus of this is that you can use the process of productising your services as an opportunity to reduce risk too. For example, a retainer that secures you some of the fee up front when you take the job on and staggers the rest of the payments when you reach certain milestones will test the water in terms of your client’s ability to pay on time.
Retainers are always going to involve the least amount of risk when entering a contract with a new client. The eBook below has guidance on how to sell retainers, plus tips on how to create an offering that protects both you and the client.