One of our Inner Circle clients asked, “if we have a recession, how should I be prepared to operate?” Great question. And I’ll give you a couple of quick tips.
Even during COVID, which was one of the quickest entering and probably quickest exiting downturns, as a company, we sat down with all our coaches and went, what do our clients really need?
Because while there were whispers of things going on in the rest of the world, there was a day when we shut down. I don’t think we had more than a week or two conversation about a potential strong downturn or any discussion about a shutdown.
In that downturn, we learned, the interview to placement ratio stayed at six and a half to one, which surprised me in a downturn. What you want to be ready for is if your interview to placement ratio is 6.5:1, it might go to 8:1 as companies get a little pickier.
We found that recruit presentations to first-time interviews go up only about 10 or 15%. So let’s say 15 candidate conversations to get one to go on an interview. You might have to go to 17 or 18 because candidates are slightly reluctant to move.
And the big one is, and these were in the worst recessions. So COVID peaked in April 2020 at 36 marketing conversations to one job order. That was the big one up from about 12.
So to say no one is hiring is BS.
Recently, when we were in Boston with our clients, we discussed metrics in a downturn. Every one of our clients measures their metrics because it becomes a predictive forecasting business tool that allows you to sleep at night. It’s always a hundred percent certain predicting future revenue.
Again, for those of you who are metrics skeptics, a hundred percent certain to predict future revenue, even solo operators through $10 million, $20 million, $50 million firms work the same. So when you go into recession, yeah, it’s harder. Yeah. It’s a pain in the ass.
The marketing presentation to job offer ratio went from about 12 again, good economy, about 12:1 to 39:1. So about 320% increase in marketing activity. And, say a 20% increase in recruiting activity, meaning you can throw numbers at a recession and survive.
I asked a couple of the offices that were a million or 2 million in their niche, what percent market share do you have? And all of them were less than 1%, not in the recruiting space, in their niche, all their niche. You know, North America pays hundreds of millions of dollars in search fees. And even if that goes down 30 or 40%, what happens is most recruiters will give up, and they’re going to say, why bother their calling?
“No one is hiring” and “No one has openings” are limiting beliefs. In any downturn, 40 or 50% of the recruiters leave. So let’s say you ultimately have 50% fewer job orders and 50% fewer recruiters, the ones that survive, if they’re aggressive in their marketing and study their numbers, can maintain revenue or survive minimal dips.
And I’ve seen people grow in recessions because they knew that statistic. I’ve seen people grow businesses in the downturn because they threw numbers at it. They just got committed to increasing their marketing activity.
P.S. Whenever you’re ready… here are 4 ways I can help you grow your recruitment business:
1. Grab a free copy of my Retainer Blueprint
It’s the exact, step-by-step process of getting clients to give you money upfront. https://get.therecruiteru.com/lm
2. Join the Recruiter Think Tank and connect with firm owners who are scaling too It’s our Facebook community where smart recruiters learn to make more money and get more freedom. https://www.facebook.com/groups/there…
3. Join me at our next event
3x a year, I run a 3-day virtual intensive, sharing the 9 key areas that drive a 7-figure search firm. Click here to check out the dates of our upcoming event: https://get.therecruiteru.com/emerge
4. Work with me and my team privately
And if you ever want to get some 1:1 help, we can jump on the phone for a quick call, and brainstorm how to get you more leads, more placements, and more time. https://get.therecruiteru.com/scale-now