How To Become A Client-Rich Recruiting FirmJan 23, 2023
These days many recruiting firms' business development efforts have shifted from a sales focus to a marketing focus in the hopes of driving inbound leads (prospects coming to them). This approach is often referred to as "lead generation" or "inbound automated marketing" for recruiting firms. It represents an important shift from the traditional sales approach (recruiting firms directly soliciting prospects).
Implementing a quality lead generation program is extremely important for most recruiting firms, and I frequently help my clients design and implement these efforts. Because the inbound lead generation strategy represents a modern-day, internet and technology-focused approach, it has a lot of intuitive appeals. Plus, who wouldn't prefer people come to you because they see you as a trusted advisor? That sure beats many "old-school" business development strategies, such as cold-calling, which are rarely effective today.
In a rush to capitalize on the promise of contemporary marketing, many recruiting firms lose sight of the big picture. This causes them to overemphasize lead generation and underemphasize other business development strategies. Doing this costs them a lot of revenue! The other approaches to business development are rarely taught today due to the focus on technology and automation. Let's take an overall view of recruiting industry business development.
There are four business development strategies for recruiting firms that work in today's environment:
- Referrals and introductions to prospective clients
- Lead generation to drive prospective clients to contact you for business
- Repeat business with current and past clients
- Leveraging resources and information
Let me explain what I mean by "leveraging resources and information" by providing more context: The job market is full of transactions that create information most recruiters miss. For example, when a candidate accepts another job, there's usually a new job opening created by this event.
In reality, there are multiple situations where information and resources exist that most recruiting firms fail to identify and capitalize on. Firms that properly leverage these resources and information gain an enormous edge over their competitors. How much business are you losing by not taking advantage of a resource that's right there for the taking?
Each of the above business development strategies for recruiting firms has its pluses and minuses, so it's unwise to over-rely on any one or two of them. Below are the positives and negatives of each strategy:
Referrals and introductions to prospective clients
- You talk with prospects who want to speak with you (or are at least open). This is far more advantageous than talking with people who see you as a commodity.
- You inherit trust and credibility from your relationship with the person making the introduction or referral.
- You have limited ability to control the quality of referrals.
- You may feel pressure to accept low-quality business due to concerns that the referrer will stop referring you if you say NO to their referrals.
Inbound Lead generation program to drive prospective clients to contact you for business
- It's great to have a flow of prospects who come to you because they see you as a trusted advisor.
- You can build awareness and credibility with more prospects than you could through other strategies.
- Developing a quality program requires significant time, money, and resources.
- It can take awhile to develop credibility and awareness. You can't count on quick results
Repeat business with current and past clients
- This is the easiest and most efficient form of business since it requires less time, money, and effort to generate than other sources of business.
- It's usually easier to fill positions with repeat clients since you already have a history of working together.
- Existing clients usually don't continue hiring indefinitely. You can suffer a very unwelcome surprise if you reduce your other business development efforts.
- Changes within your client's organization or with your relationships can cause a sudden drop in your business.
Leveraging resources and information to facilitate conversations with prospects
- There are continuous opportunities to capitalize on this valuable asset, providing you with ongoing value.
- This is a resource that few of your competitors effectively utilize, which gives you a chance to gain an important competitive edge.
- You don't start with as much credibility as you do with the other strategies.
The main takeaway that I want you to get from this article is that it's easy to get caught up in a current trend to consider lead generation / inbound automated marketing as the solution to recruiting firm business development challenges. However, for most firms, it's not a panacea, just an important component of their overall business development efforts. The adages to avoid taking things to extremes and to diversify your strategies apply here. In summary, the wisest approach to business development for recruiting firms is to:
- Maximize the number of potential client prospects you talk to so that you can be more selective about the clients you work with and
- Minimize the risk of a sudden drop in quality job orders that put your firm in a dangerous position.