Recruitment firms that lose key staff soon find out how resilient their processes really are. Especially when there is a market downturn, the barrier to exit for existing consultants drop, making it more likely they start to think about the potentially moving firm or starting their own business. The nightmare situation, of several consultants leaving simultaneously and setting up competing firms, does happen. For people who have had to operate through that, they will know the scenario well, in that suddenly they have a situation where capacity is down, clients stop being serviced as well, where the consultant they had built their relationship with is offering equivalent services elsewhere. Realistically, when this happens, it can be incredibly damaging, with that in mind, what are the steps you can take to safeguard your business?

  • Management Culture: Studies show that the number one reason leave is because of a poor relationship with their line manager. If you are the line manager, think through how you communicate with your team? With the millennial generation now expecting a different kind of manager, have you adapted to that?


  • Process-based model: With your business, the more robust you can make your processes the more resilient your business will be. For example, ensure your employment contracts cover restrictive covenants where the person has to sign the employment contract before they join. Require every consultant to fully notate client and candidate interactions in your CRM where it may even make sense to financially incentivise them to do this.


  • If you have a model where consultants ‘own’ a client make sure you or another senior manager also has an equally good relationship. Ideally, specialise consultants by the skill with overlap where clients engage with different consultants depending on their need.


  • With star billers, think through equity incentivization. This can be a powerful lever to give people a way to feel they can be a part of a business without having to take the risk of starting their own. As part of that, look at your billing structure, and make sure your good consultants are not under-rewarded.


  • Create alignment through unifying your vision and strategy and encourage people to challenge you. The more people you have in your team who are helping you refine your vision, the more they will buy in as it becomes crystallised.


If you are in a situation where key staff are already leaving and setting up competing agencies, think through whether it is better to retrench and focus on profitability, or whether you want to fight fire with fire. Sometimes in war the wise general retreats to fight another day, other times it is better to stand your ground. Make decisions clinically and focus on what the short and mid-term implications are for profitability when you make decisions.

Finally, make sure to incorporate data into your business process wherever you can. Through incorporating high-grade vacancy data, if you do need to retrench you can focus on the clients that are the most lucrative, and model your business accordingly.

Over the last fifteen years Vacancysoft has worked with recruitment firms of all sizes to help them map out market activity in order to identify changes in demand. For more information about how we can help, please contact us.


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