Are you concerned about what is going to happen when the current growth in the recruitment industry starts to slow down?
While the recruitment industry is still enjoying the momentum from 2021, propelling it forward through Q1 and most likely Q2 too, it remains a cyclical industry. Sooner or later, economic growth and hiring will decelerate.
In this episode, Abid Hamid reveals the biggest concerns and hot topics on the minds of recruitment business founders and CEOs. The information that he shares in this interview can make a valuable contribution to any size recruitment business.
His advice is to prepare right now for when the next slow cycle comes around. This could be in 6 or 18 months from now and nobody can predict the exact date for the change in direction. The only certainty is that there will be one again and this should urge recruitment business owners to take the necessary steps to protect their businesses while still scaling and growing.
One of the ways to do this is by creating and sustaining sticky relationships with your clients. He explains all you need to know about how to do this in the next hour of conversation.
Episode Outline and Highlights
- [01:38] Abid explains the importance of sharing ideas with like-minded experts in your field
- [04:00] What are the hot topics in the minds of recruitment CEOs?
- [06:17] What’s the definition of a client? What does a sticky client relationship look like?
- [09:50] What is the cost of the business you have and is it something you want?
- [13:00] Abid expands on payment terms and how to collect your accounts receivables faster
- [17:45] Abid’s thoughts about the next 12 months in the recruitment industry
- [21:46] How to protect yourself while continuing to grow your business
- [24:00] These are the characteristics that Abid looks for when hiring recruiters?
- [27:00] What is a Risk Matrix and how does it come to play in your business?
- [31:50] Abid’s plans for the US recruitment market
- [33:15] Why are there so many small recruitment businesses that don’t scale?
- [38:50] Understanding the process of scaling-up with Abid’s help
- [43:20] Why your business isn’t attractive to buyers – even if your billings are good
- [47:07] Abid shares some of Recruitment Entrepreneur’s success stories
- [50:55] How to allocate time to work on your business to scale rather than working in your business to earn an income
What Are the Three Hot Topics on the Minds of CEOs Right Now?
Abid states that currently, the thoughts of founders and CEOs centre around the current state of the market. He then breaks this down further, referring to what this entails. The first point to consider when you take a look at the entire market is how to build cultures in businesses where there is a flexible environment. Another point is how do you attract the right people in the market that is so heated when it comes to salaries. The third point of interest is, how do you create more sticky situations with your clients?
He says that in these cycles, it is evident that flexibility in the workplace is here to stay and what is becoming vital now is how you manage this flexibility. For example, if your teams work mostly remotely but do spend some time at the office, you get teams to come in at the same time. This still allows for some collaboration on the sales floor.
The Risk Matrix – What Is This and What Does It Mean To Your Recruitment Business?
What are the characteristics that Abid looks for in candidates when recruiting internally?
“For me, slightly out of the norm is good. Slightly unhinged is good…Slightly unhinged in the sense that you really, really know what you want because people who are passionate about something, they are slightly different,” Abid states before explaining what the Risk Matrix is that he is looking for in candidates.
The Risk Matrix is the built-in barrier that we all have that determines our decisions regardless of whether we purchase something or make a phone call. While he sees the perfect candidate to have a bit of an unusual side, the Risk Matrix must still be controlled, making them prepared to go to the edge of their experiences, constantly expanding on what they are capable of and getting comfortable with.
Why Are There So Many Small Recruitment Businesses That Don’t Scale?
The recruitment industry has an abundance of small recruitment businesses and there are many reasons why the majority of them don’t scale. According to Abid, creating a successful business and an exit-able business are two different things. You need to know how to exit and plan for that in advance. It is also important to understand that many of the solo recruiters or boutique firms don’t want to scale as they’re only interested in a lifestyle business. That’s perfectly fine, so long as the business is providing what they want, and that they’re not letting fear hold them back from scaling.
Abid further emphasizes that it is important to distinguish between generating an income from recruitment and building a recruitment business that you can exit from at a later stage. The latter is what Recruitment Entrepreneur helps their clients to achieve.
