As internal recruiters take over a greater part of the hiring cycle so the way agencies are instructed is also changing, with PSL pitching becoming ever more competitive. The obvious challenge for recruiters is avoiding being commoditised, but, equally, how best can agencies showcase their industry expertise, and what that means in terms of their ability to source the best candidates, in order to command a premium? Innovative agencies looking for a competitive edge should think about the following:

What do you do to research your client before you pitch? For example, Companies House now makes all information publicly and freely available online. This means that you can check your target client’s financials before you even speak to them. Companies with turnovers over £10m are also required to file their full accounts, including P&L and balance sheet. With that, you can do a couple of exercises, including:

Analysing what the revenue growth over the past three years has been (companies on a fast growth trajectory will hire as they expand, whilst those whose revenue is flat will hire to replace).

Looking at what their operational profit is. Businesses that have good margins are less likely to be aggressive on payment terms and margins, as they don’t have the same financial pressures.

Seeing how their shareholding structure is broken down. Owner-managed businesses will have a different modus operandi to those owned externally or with VC funding.

With LinkedIn, you are able to not only see the rate of hiring and growth, but also the rate of departure. What is the company’s visible churn rate over the past 12 months? A company with a high churn rate may well have internal issues that will make them harder to recruit for. By comparison, a company which is significantly better at that may well have a story to tell, which you can use to sell the job to a candidate. Glassdoor will help with this too.

What you can do next is to cross-reference this data against the company’s peer group. So, if you are pitching to a retailer, as an example, identify the four or five companies they compete against directly and see how their financials compare.

And what should you do with all this information? Make the pitch process a two-way interview. Keep in mind that one of the biggest frustrations for consultants is when they have a superb candidate who is being made multiple offers by different companies, through various agencies, and that candidate then takes another position. With that in mind, this is not just about the company deciding which agency they will use, this should also be about you deciding if you can sell the company to candidates. Data-led insight will enable you to uncover corporate culture in a way that bland questions won’t.

At the same time, showcase your knowledge of their competitors, in terms of financials, people moves and employee engagement, and how they compare. Showcasing your expertise that way will suddenly show the company that not only do you understand their internal issues but you also have a good handle on their competitors. It then becomes a lot easier to explain why you won’t negotiate on fees, even if you are more expensive. It could be that suddenly the conversation switches to being about an exclusive retainer.

Indeed, systematically adopting this approach will over time mean that whilst you may end up with fewer clients, the companies you work with will not treat you as a commoditised service but instead an industry expert and a trusted partner, giving you a roadmap to greater profitability.

Over the last ten 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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