The past five months have been one of the most challenging times for any recruitment agency with many agencies having to furlough staff based on the fact that the industry they are recruiting into has either put recruitment on hold or reduced their staffing needs. While the world waits for a “miracle cure” to COVID-19, it looks like the future workplace will be different, and as such, the recruitment industry will have to adapt.
With the current furlough scheme ending at the end of October 2020, it is up to the agency directors to make some difficult decisions about staffing and other overheads, while they wait for their clients to decide on how they will be staffing their businesses going forwards. Although the bounce back may take a while to flow into placements and then into revenue, recruitment directors need to ensure that during that time they can survive and it may be a good idea to have a full review of all overheads.
These are some of the business items that recruitment directors may wish to review:-
REVIEW EXISTING SALES STAFF
Although recruitment consultants are the lifeblood of any agency, they are also one of the highest costs, especially when they are not billing. Having a recruitment consultant who is not generating revenue has not only a salary cost but also a desk cost to the business. It is advisable to review each staff members previous performance (pre-COVID) and also how their current client base has been affected by the pandemic to see if they will get back to those levels in the future.
It may also be best to review the creditworthiness of a consultants clients to ensure that they are not going to lose the company money by continuing to recruit into their client base.
CONSIDER OUTSOURCING BACK OFFICE FUNCTIONS
As business starts to return to normal levels over the next few months, a recruitment director does not want to be distracted by having to manage or complete mundane back office and accounting functions such as invoicing, credit control or bookkeeping. If the director is completing these themselves or if they are paying a person or even a team of people, then they should certainly consider looking at outsourcing these functions.
Outsourcing your back office and accounting will free up management time, significantly reduce costs (especially compared to having an internal team) and improve the processing of these tasks.
ENSURE YOU HAVE GOOD MANAGEMENT REPORTING AVAILABLE
As the pandemic has hit businesses hard over the past few months, recruitment directors must understand the financial impact it has had and also look at the picture coming out the other side. Suppose the business is not receiving regular reports such as aged debtors and management accounts. In that case, directors are running the company blindly without knowing if they are on an upward or downward trajectory.
UPDATE YOUR MARKETING STRATEGY
Getting your agency noticed, especially as we come out of lockdown will be vital to help attract candidates and clients when you need them the most. It is best to review and update your marketing strategy, and if you are not already outsourcing this function (as you are doing this yourself or you have internal marketing staff), then it is a good idea to see what marketing companies can do for you.
CUT ALL UNNECESSARY COSTS FROM P&L
Before the pandemic, most agencies were riding high and spending money on various overheads that were potentially not necessary, not effective or a luxury for the business. These may include large office spaces, unused job boards, external advisors, unused gym memberships or ineffective marketing tools. Every cost shown on a company profit and loss should be looked at to see if there is something currently paid for (many times by Direct Debit) that you were not aware was still a cost to the business.
By reviewing and taking action on these overheads, you will strengthen the companies financial position while the top line profit starts to grow again. It may also be that this becomes a regular task to ensure that the company is not overspending on unnecessary items or is maximising their processes to make the company profitable and more streamlined.
TBOS works with over 100 recruitment agency clients to outsource their full back office and accounts department. This service has not only provided our agency clients with a cost-effective solution but also streamlined processes and provides every agency with monthly management reporting so the directors can run the business effectively.
Please contact our office if you would like further information on how we can help your agency.