If you’re like most of the Recruitment or Search Business Owners I speak to… There are three major threats to your business profits that you need to be aware of as we move into this new economy….
These are things I saw happening whilst working with Recruiters during and directly after the last recession, and although the situation COVID-19 is new… If we go into a recession like most experts predict, the challenges (and most importantly the solutions) will be the same as any other recession.
1.) Spending Reluctance
The first big threat to your business profits as we move into the new economy is spending reluctance from your prospects…
It’s not that they won’t spend at all… But there will undoubtedly be more uncertainty surrounding their buying decisions, and unless you can alleviate that, they’ll be reluctant to move forward with your company.
You’re probably seeing allot of this already with Hiring Managers “putting things on hold” or telling you that “recruiting isn’t their priority”.
Although this may ease as we come through the worst of COVID-19, it won’t be back to how it used to be for a while. They’ll be a “new normal” and recruiters that don’t adapt will get left behind.
2. The cost of bringing in new clients
The 2nd big threat to your business is the rising cost of bringing in new clients…
When the market contracts, bigger firms let recruiters go (you may have seen some of this already all over LinkedIn), smaller firms hold back on hiring consultants and it creates a brand new wave of start up solo Recruitment/Search Businesses who otherwise would have ended up working for someone else.
It creates more competition for attention in the market place, and so it gets even harder to stand out. Some of the newer firms won’t last the test of time (neither will some of the more established businesses) but they’ll at least be around for a period.
This means more hours, and more money invested in getting in front of the right people…
The strategies you’re using currently get ignored because everyone is doing the same thing.
This second threat will take a while to take effect as people adjust to what’s happening right now. But expect to see this within the next 12-18 months…
3. Price Pressure
The third big threat to your business profits is a little something I like to call “Price Pressure”…
With more Recruitment & Search Businesses entering the industry… The truth is, no matter how you look at it, the list of competing leaders in your market will grow at a rapid pace.
Many of them will try to undercut your current fees and because of this, (and the spending reluctance we mentioned earlier), you can FEEL like you’re being forced to lower your fees in order to win the business…
Unless you do something about it…. These three threats combined will slowly drain your profits, stunt your business growth and limit the amount of cash you’re able to take out of your business every month…
But enough of the doom and gloom, because there is good news….
There’s always good news…
Although we can’t stop these three threats per se, because they’re always going to be there is some form or another.
You can protect yourself against them AND as long as you adapt to the “new normal” you can profit in spite of them too!
I’ve been working with the Recruitment and Search Business Owners we help this week crafting plans for them to protect, pivot and profit in their business… If you’d like my help too, click the link below –
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