New Niches In Recruiting: The Best Approach For Expansion

Mar 10, 2025 | Growing Recruiting Revenue

QUESTION: What have you found to be the best approach or strategy for expanding to new niches in recruiting?

Finding and Identifying New Niches in Recruiting

It’s a great question. I learned this from Bob Marshall. We used this to establish a couple niches in my firm, and I have had some clients do this with really good success as well. One, you want to find and identify a niche where you will enjoy talking to the people in the niche or about their issues, problems, and business.

I did tech and loved doing tech sales. I remember an excellent client gave me a couple of engineering assignments on an exclusive basis because they loved working with me, and I loved working with them. They were very fair. I gave it three weeks, and for me, software and hardware engineers in Silicon Valley, it was just a chemistry mismatch. I love talking to salespeople, about technology, and about what they do every day.

Why Enjoying Your Niche Matters in Recruiting New Niches

I remember calling the VP of Engineering and the head of talent acquisition, a great partner, and saying, I’m failing at this. I’m not good at this. You know what they did? They thanked me and said a lot of people would not have the guts to come and go, this is not for me. They go, you are a sales and marketing guy, Mike. You are going to be our sales and marketing guy. I felt terrible, but new niches in recruiting can be tough.

Ever since then, and this is when I worked with my recruiters and coach our clients that come to me with this question, the number one thing is, you need to enjoy the issues, the niche, the type of people. While I enjoy technology with engineering, it was hard to build rapport with me for them. Now that I know more about psychological growth and the detailed orientation of an engineer versus the people person type of salesperson, that is what you want to get.

The Step-by-Step Strategy for Expanding to New Niches in Recruiting

How to Build a List of Companies in New Niches for Recruiting

Two, put together a list. You can hire a researcher to do this very inexpensively. I compiled a list of 50 or 60, maybe 70, companies in that niche. You should target companies with $250 million or less in annual revenue. My ideal was $100 million or less in annual revenue, but this can work up to $250 million because of less infrastructure, less talent acquisition, fewer blockades to get through, and a lot more fun to work. Get the hiring managers from companies in that revenue size.

Connecting with Hiring Managers in New Niches in Recruiting

Three, you call them up and say:

I am doing a quick hiring survey and will publish the results if you want copies. I am happy to send you my one or two-page white paper on this. Let me ask you:

Questions to Ask Hiring Managers in New Niches in Recruiting

As chief financial officer, does your company plan on expanding, maintaining, or contracting the size of your workforce?

Just like A, B, C. Check one of those boxes.

How many people do you typically hire per year?

Do you guys use recruiters for most of your professional positions?

From your perspective, under the locus of your control, because I do not want a CFO talking about hiring salespeople, especially if I am calling a CFO, I probably want to have some sort of financial and accounting niche. What have been the #1 and #2 positions you have had the biggest challenge filling over the past 12 months?

If you get a bunch of people, and again you want to be very careful not to sell here, you can say, any other comments around any of those questions? And get a little bit of a dialogue.

How to Create a White Paper from Your New Niches Recruiting Survey

A, B, C, I can give percentages for each one. I can create some pretty simple graphs, put together a couple-page white paper. In talking with a number of chief financial officers in the XYZ widget space, we identified that 72% will be maintaining their staff, 20% will be increasing staff, and 8% will be decreasing staff, and then you go through the other stuff.

The reason I say a list of 70 or 80, you want to talk to about 30. You will get a feel for it at about 30. If you speak to 30 people, let’s say you have 4 or 5 say, the world is on fire and it is going to hell in this niche and give me a parachute because I am going to bail, and then you have 4, 5, or 6 or maybe 10 go, yeah, growth is good, and it is actually at or above where we have seen, and we plan on growing our team.

Your usual percentage is going to be in the middle, maintain. But after you talk to 30 people, know that you will always have a small percentage saying the niche is going to hell and there is doom and gloom. But that is normal if it is 5%, 10%, or 15%. You could get that in the biggest boom economy.

Building Relationships in New Niches for Recruiting Success

Then two things are going to happen. You are going to have 30 conversations with high-level people. You’ll get a high-level view of their locus of control and their philosophies. You are going to begin to build some relationships. You are going to hear, not only in the – this is why I would not want to do this in email – you are going to listen to the level of optimism or pessimism in their tone of voice, and based on that, you can say there is an opportunity for business here. If more are maintaining and growing, or growing is larger than declining, you probably have a good space. You have probably got a good space.

Common Pitfalls to Avoid When Entering New Niches in Recruiting

Avoiding Overhyped New Niches in Recruiting

What I would avoid, having said that, is wanting to have an artificial intelligence (AI) desk right now because that’s the sexy, new thing. Everyone will be like, it’s the new gold, the new goldmine. These industries are growing. I got into tech before tech got hot. It was total chance. Total serendipity. I was already in tech when tech got hot. I could maintain my fee structure because of the reputation we built.

But when I got into the business, for example, the hot, hot, hot market – this was in 1990-1991, which was a recession, the market that was growing really, really fast was pharmaceutical sales. The average fee back then was probably around $10,000 to $12,000. The pharma sales were $4,000 flat. Everything was faxing resumes to HR. There was minimal hiring manager contact. So many people were in it. It just suppresses your fee structure. It is just wildly competitive.

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