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The last two years have been challenging for most recruitment businesses. While there is optimism for improvement, the sector is still facing a perfect storm. The sluggish economy is causing slower conversion cycles and a reduction in job requisitions, while gig platforms are growing in number and popularity. Add to this the continually evolving needs, expectations and preferences of customers, candidates and clients, and you have a tough recruitment landscape to navigate. 

With research conducted by Bullhorn suggesting that the top priority for recruitment businesses in 2024 is to win more clients and grow their talent networks, recruitment businesses need to proactively consider how they can transform to grow in such a challenging and saturated market. 

What should recruitment businesses be thinking about to secure their future?

Redefining the value add

It’s clear that clients and candidates now demand more value. Recruitment businesses are having to develop the traditional recruitment role and adapt to stay relevant. Simply acting as the middleman is no longer sufficient to retain and attract new customers – clients and candidates expect more. Consideration has to be given to how to use and develop capabilities and assets to generate additional value while maintaining fast, efficient sourcing and time to fill. 

Data can play a key part in moving the dial away from being a transactional broker and towards becoming a strategic adviser. Aside from recruiters, the greatest asset of recruitment businesses is the data they collect over time. Many firms are looking at how to harness and monetise their data more effectively, enabling recruiters to provide valuable strategic insights to clients, helping them understand and address both short- and long-term talent needs, and align the talent pipeline with the organisational strategy. In this way, recruitment businesses are becoming strategic advisers to their clients and building more meaningful and valuable long-term relationships.

Diversification is another consideration. Some firms are diversifying and evolving their product and service portfolios to meet changing customer needs. Through acquisition or internal development, they are introducing the capability to source skilled teams for specific, temporary client needs. Additionally, some firms are addressing talent and skill shortages by building strategic partnerships to provide development programmes for candidates, creating pools of highly skilled, marketable talent for their clients.

Whatever the approach, the common objective to enhance the value delivered and set the business apart from the crowd is clear.

Reshaping the operating model and supporting technology

With changes to the delivery model and service offerings, recruitment businesses must ensure they are set up in the best way possible to fully realise growth opportunities. This involves reviewing and optimising their structure, key business processes and the technologies they use to create a strong foundation for growth.

Until recently, recruitment has been a manual, admin-heavy industry with repetitive, time-consuming and costly transactional activity prone to human error. Emerging technologies, including AI, are now transforming the industry. Recruitment businesses must embrace this disruption to grow and create more value for clients. However, it's important to temper excitement and avoid rushing into implementing new technologies. Businesses need a clear vision of how new tools will integrate, be managed, and align with the workforce to deliver the best results. Implementing technologies hastily and without proper consideration often fails to deliver a return on investment.

New technology is enabling the automation and acceleration of numerous processes, meaning the role of recruiters and the structure of organisations must evolve. This can help businesses reduce operating costs and increase margins, but also raises questions about the skills and capabilities needed by modern-day recruiters. As the focus shifts towards effectively analysing data to generate insights and provide consultative and strategic support to clients, the skills profile for a strong recruiter is changing. To deliver true added value, businesses need to consider how to prepare their current workforce for success in this new environment, while also addressing their future talent acquisition strategy.

Only when a business considers and evolves all elements of their operation in a holistic, structured manner will they be able to realise the full opportunity.

Revamping the customer experience

Historically, the candidate journey has been cumbersome and time-consuming, causing many to lose faith and patience. In a crowded market, delivering an outstanding customer experience is crucial for retaining and attracting customers. 

To remain competitive, the race is on to create the optimal candidate journey by personalising experiences, giving candidates control over their data and automating processes to enable dynamic placements. However, it is essential for firms to listen to clients and candidates to understand what constitutes a good experience, balancing speed and automation with the human touch needed in maintaining critical relationships.

Doing it the right way

Deciding what to do is clearly critical, but determining how to make it happen is just as, if not more, important. Business transformation can be challenging, so it’s crucial to shape the journey with a clear vision from the start. Evaluating and prioritising the options to develop a pragmatic and robust transformation roadmap and gaining lasting commitment from both your business and your customers is key for a successful outcome.

To discuss how you can successfully transform your recruitment business to ensure it can effectively address current and future challenges, please contact Alex Fraser.