The new formula for recruitment growth

The agency recruitment market is changing, and some long-held ‘sacred cows’ are being slaughtered as owners and managers grapple with a fundamentally different market.

Setting the right strategy is existential for recruitment agencies everywhere.

Soon, I’ll head to the UK to deliver a series of lunch presentations to Agency Leaders, supported by my friends at APositive. Here is the topic of the day. (Join us. See below)

Here are some stark realities.

Fewer, more productive recruiters. The recruitment industry will continue to grow, but revenue will increasingly be generated by fewer agencies employing fewer, more productive recruiters.

Three ways the work gets done. Automation handles repeatable work. AI-enhanced human work is increasingly offshored. High-value recruiters concentrate on premium advisory work.

Fewer agency relationships. Clients use fewer agencies, favouring niche specialists that bring expertise, credibility and insight.

Partnership replaces transaction. Exclusive/retained work, trust and advice increasingly outperform contingent CV-pushing.

Productivity replaces headcount to drive growth. Measure GP per recruiter, productivity and quality — not simply desks and headcount.

The market is not collapsing. It is getting more selective.

You need to upgrade your client quality and partner only with clients who value insights and listen to advice.

The above is just a fraction of the shift leaders need to navigate.

I have been searching for a way to sum all this up in a neat statement, or even a formula, and then I stumbled upon it from an unexpected source.

In the latest financial report from Hays, they outline their strategy imperative, and there it is. Clear, brutal, but real.

This won’t apply exactly to every recruitment business, but the message behind it is golden.

Hays plans to drive business success and execute a strategy where operating profit growth exceeds fee growth, and fee growth exceeds headcount growth.

And this isn’t simply a cost-cutting strategy. It requires better-quality revenue as well as greater efficiency.

For years in the agency world, we tied success, growth, and more profit to more recruiters.

Hiring great recruiters will remain part of the formula. But now it is better technology, lower delivery costs, higher individual productivity and better-quality client relationships – generating more profit without proportionate headcount growth.

Easy to say (well, not that easy. I struggled to verbalise it), but very hard to do

So, the past is over.

Not a CV race. Not mud against the wall. Not more mediocre recruiters hiding behind digital.

In the UK and want to explore this further? Join our speaking roadshow. To discuss an invitation to attend, speak to Darren Cottrell or Alistair Viner.

It’s free. Great lunch. Mediocre presenter

We will hold events in London, Birmingham, Manchester and Bristol.

Or, if that’s not possible, sign up for the Savage Recruitment Academy, where we update material like this every month.

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