Learning from Past Declines in Your Practice

QUESTION: Mike, I had a killer start in 2017, the best three months of my career January through March.  Then it began to decline. Now as I look over the last few months I have had a few deals blow up.  My activity is down, and I am working on job orders that I should not be because I have nothing better to work on.  How do I prevent this from happening in 2018?  – Neal, Seattle, WA

ANSWER: Your activity is down, so I am not sure if you are measuring metrics or not.  When I start working with most recruiters in my programs, 80% to 85% are not tracking their metrics, and I was not either for a long time.  So do not feel bad about it, but now I am telling you the benefits to it because it is going to make your revenue predictable.

When somebody has a great month, a great quarter and they are not measuring metrics, they have not connected the activity they need for the revenue they want and the income they want.  What tends to happen is they have a huge wind down in activity.  Or the other thing that may have happened, you arranged a lot of interviews and you had a lot of things blow up too.  Well the business owed you money because I find a lot of people have around eight first time interviews to making a placement.  Let us say you arrange twenty five interviews and you do not make a placement.  Banging your head against the wall.  Deals are blowing up.

Let us assume that you did everything right in regards to communication with your clients and candidates.  Still, you go 25, 30, or 35 interviews without a placement.  What always happens after that if you follow this, always, and I never use the word always or never, is you will go through a period of time where you spike.  So that might have been what happened.  Maybe you had killer January, February, and March because the numbers were back loaded.

Maybe you really ramped up activity at the end of 2016 which led to the quarter.  You arranged a lot of interviews and then you get into the mode of February and March, as I see this pattern happen a lot with recruiters and clients, is you have that really great activity November and December because you got serious about finishing the year strong, but then January, February, and March you get into where you are closing a lot of things and then you have receivables so you let the marketing and the recruiting slip because you said your activity is down.  That is the thing I am kind of feeding off here.

One of the things I do with my clients, if it is an individual or if it is an office and they want $1 billion or $2 billion a year, there is an exact, specific, and precise formula that needs to occur.  Let us go desk level, not office level for the minute, on your desk every day that you work, we take out vacations, holidays, and things like that, but if you want to bill, you did not put numbers here but I will just say $300,000, $500,000, or $200,000, whatever that number is, once I work with someone 60 days or so I can tell them, here is what you have to do everyday.

Then you have a choice.  You can come up with all the BS excuses in the world you want as to why you did not do those targets on a daily basis, but then at least there is no surprise like you seem to be having the surprise of why business fell off the past few months.  Again, I am prescribing based on previous diagnosis with other recruiters with similar problems.

Think about when you have had really good months or quarters, what was activity like the subsequent months or quarters?  The way you get off that roller coaster revenue is you get on metrics, not as a way to beat yourself up, but as a way to keep yourself motivated.

You can have a deal blow up.  You can have two deals blow up on a Friday.  Let us say to hit your financial goal you needed to arrange three first time interviews that week.  You look back for the last six weeks and every week you have averaged three interviews a week months back and you have maybe hit a dry spell in a month or two with no placements.  People who have been with me for a little bit of time now know it emotionally.  They are not worried about this month anymore because they have the money in the send out bank.  That money always, always, always get cashed.  I have never had somebody work at the right activity levels and not have the billings run out.  Again, I never use the word never and always.

I have coaching clients who perform at 60% to 70% of their target activity wise.  I will give you one guess, the revenue is at 60% to 70% almost without exception.  Sometimes when we have newer metrics we might be off by a little bit more than that in the prediction, but they flow like Bloomberg charts, very, very, very predictable.