When times are tough, many recruiters go into desperation mode. They drop their rates and work on every order they can get. Even before the pandemic, the norm in our industry has been a transactional, “CV supplier” style service in competition with multiple agencies. It’s an incredibly frustrating and demoralizing place to be.
So how do you change your business model to retained recruitment? How can you charge a premium and persuade clients to pay you up-front? How do you work exclusively or even win MSP (Managed Service Provider) contracts?
Well, it involves differentiating your service and shifting customer perception. That shift actually begins within your own mindset. In today’s episode, my guest Plamen Ivanoff, recommends that you start by dropping the word ‘recruiter’ from your job title!
Plamen is the Chairman of the Executive Search and Selection firm, GrassGreener Group™, and Co-Founder of the technology company, i-intro®. The i-intro® process helps Recruitment and Search firm owners successfully transition their businesses from the typical “CV supplier” transactional contingency recruitment to the more meaningful, retained recruitment and MSP (Managed Service Provider), consultative models. To date they have helped over 200 recruitment and search firms to generate £100 million in retained fees.
Episode Outline and Highlights
- [3:19] Plamen shares his journey in the recruitment industry.
- [8:09] How Plamen went from pure contingent to 100% retained
- [17:24] Customer perception and differentiation – finding your unique value proposition.
- [22:08] Instead of “New Normal”, how to focus on the “New Excellent” during this pandemic
- [31:20] Why it will never be the same after the coronavirus crisis and what it means to your recruitment business
- [42:24] What is the good news for recruitment micro-businesses?
- [51:45] Selling points of “risk reversal” – does a 12-month replacement guarantee make business sense?
- [1:00:08] Why you should drop the word “recruiter” from your job title, and what to call yourself instead.
Customer Perception and Why Differentiation Matters
The recruitment industry is fiercely competitive at the best of times. During an economic downturn, the competition is even more intense. One major element affected is price pressure. Without differentiation and unique customer perception, there is a possibility that clients would rather go to where they get the lowest price. This can lead to the gradual erosion of placement fees. Plamen quoted REC’s (Recruitment and Employment Confederation UK) statistics which shows that last year’s market benchmark on fees is 14.7%. He believes that this year’s statistics will come down lower. He emphasized the relevance of having a unique value proposition. As Plamen said:
“I believe this year’s statistics will drop down even further because of exactly the point that you make. Recruiters don’t have the option to compete on anything else because the perception is already set for the client… So some companies are going to market saying ‘I’ll take 12%, I’ll take 10%, just give me the job because I’ve got mouths to feed otherwise I will have to sack these recruiters…’ All of this is happening as we speak now. So this pressure on fees will be considerable. So [if] you provide a recruitment service that is a “me-too” recruitment service like everybody else, you are very likely to be feeling the pressure of fees. But if you take your service out of the “me-too” recruitment, and create what I call “me-only” recruitment, it is above and beyond.”
Five Stages of Behavioral Shifts in Times of Crisis
Plamen also shared five stages of behavioral shifts by business owners which is more than relevant during this economic crisis. Below is the summary:
- Overreaction / Fear – panic, business hibernating, putting people in furlough
- People looking for a new base or new normal – people starting to have more interaction online and start to adjust to the new normal.
- Hoping for good news – people start to look for good news and how they will position themselves to new opportunities
- Slow Recovery – more opportunities are starting to come in and early adapters build up relationships with clients.
- The Late Majority Arrival – those who just waited on what will just happen will pay the price. Positioning yourself to the forefront, being agile, and flexible is the key to do better.
Navigating in these difficult times can be challenging for both large and small recruitment businesses. But as Plamen said, those that are more agile, early adapters, will have more chances of success.
Drop the Word Recruiter From Your Title
Plamen emphasized during our conversation the importance of being consultative to your clients rather than just being transactional. As he said, “Drop the ‘recruiter’ from your title. You need to become a talent acquisition management consultant. Management consultants are associated with improvement and value add.”
Plamen Ivanoff Bio and Contact Info
Plamen Ivanoff is the Executive Chairman and Co-Founder of the Executive Search and Selection firm, GrassGreener Group™, and i-intro®. The i-intro® process helps Recruitment and Search firm owners successfully transition their businesses from the typical “CV supplier” transactional contingency recruitment to the more meaningful, retained recruitment and MSP (Managed Service Provider), consultative models.
i-intro® enables recruiters to deliver to their clients an unparalleled new employee retention rate of over 96% in the first year while reducing commercial downtime and overall cost-to-hire for employers. At the time of writing, over 1000 recruiters and 200 firms around the world have transformed their business with i-intro®, winning in excess of £100 million in retained fees.
- Plamen on LinkedIn
- i-intro website link
- The Wired Recruiter website link
- i-intro on Facebook
- i-intro on Twitter @iintro_
- i-intro on Youtube
- i-intro on Instagram
- Free i-intro consultation
- Death of Contingency Recruitment – request here.
- Redundant? How to Future Proof Your Recruitment Business – request here.
- The Rewired Recruiter – How to Reinvent Yourself for a Rapidly Changing Industry – request here.
People and Resources Mentioned
- The Shift: The Future of Work is Already Here by Lynda Gratton
- The Retained Recruiter Academy – Leveraging Content Marketing by Mark Whitby – request the video here.
Connect with Mark Whitby
- Get your FREE 30-minute strategy call
- Mark on LinkedIn
- Mark on Twitter: @MarkWhitby
- Mark on Facebook
- Mark on Instagram: @RecruitmentCoach
If you’ve been enjoying the podcast, please take two minutes to leave a review. Your review is greatly appreciated because it helps us attract a bigger audience and help more recruiters. “Support the podcast and leave a review here”.