The 2X Business Challenge: Double Your Profit, Not Your Headaches

I have spent most of September running around the UK, hosting our regular TRN Regional Meet Ups, with recruitment business leaders from the highlands of Scotland to the beaches of Bournemouth. From the pier of Southend to the Valleys of Wales (not sure where I am going with this?!)

It's been a huge amount of fun.

We've talked about the market, how business development is evolving, AI, consultancy, productivity and what is actually working in recruitment right now.

And one thing remains increasingly clear. There is a huge opportunity sitting in front of our industry for anyone and everyone in it.

Not necessarily to build BIGGER recruitment businesses, but to build significantly BETTER ones.

Businesses that generate more revenue from their existing customers. Get more productivity from their people. Make better use of their data (and in some cases monetise that data). Use AI to remove the rubbish that gets in the way of our recruiters doing their best work and ultimately, convert more of the revenue they are generating into bottom-line profit.

Which got me thinking about a new challenge I am taking to the TRN community over the next couple of months - what would it actually take to DOUBLE the profitability of your recruitment business?

Not doubling your headcount. Not doubling your costs. Not even necessarily doubling your revenue.

Just doubling your profit. That's it.

Sounds too simple, maybe? Too ambitious? Good. It should be.

But I think it's a much more achievable ambition than many recruitment leaders might initially imagine, whether you are a Solo recruitment leader or run a business of 100 fee earner, and that's what I intend to show everyone as I embark on our next series of Regional Meet Ups across the country between now and the end of the year.

If you want to find out what I am on about, then come and join us - register for free for any of our events at https://therecruitmentnetwork.com/events

Oh, and the really interesting thing about all this? You probably have most of what you need to make it happen in place, in your business, already!

That's kind of cool when you think about it.

High performance is about doing the right things... brilliantly and consistently well.

This is a phrase we all banter about about in all our businesses and with good reason - I totally subscribe to this. But I think there's an important question we need to ask first.

What if the basics have changed?

The pure fundamentals of recruitment are still incredibly important. I think they are same today as they were when I first got into recruitment many moons ago.

• Build deep lasting relationships.
• Network consistently.
• Get out and in front of your customers.
• Put in a shift.
• Great delivery with speed.
• Celebrity customer service.
• Respect your client, but never be subservient to them

None of that has gone away.

But the way customers buy has changed. The way candidates behave has changed. The technology available to us (and our customers) has changed.

And the value our customers expect from us is changing.

So, if we're going to build genuinely high-performing recruitment businesses, we need to redefine what great performance actually looks like

(I'm not sure there is alignment in some businesses between the recruiters and the leaders about this, and that is an issue in itself).

It's not simply about making more calls. Or sending more CVs or or adding more headcount to your business.

It's about making sure every part of the business is working as effectively as possible in the first place and making sure your people have the skills, tools, confidence and commercial focus to deliver at a much higher level.

Which is why I'm genuinely excited about the 2X Business Challenge.

It will force you to look at your entire business (that's what the 2X Calculator is for) and change what you think is possible from a productivity, performance and profitability perspective (sorry, that's a lot of "P"s but you get the idea!).

The next big idea?

We spend so much time looking for the next big thing (AI is perpetuating this) that will power our businesses to that next level, that we sometimes overlook the opportunities sitting right in front of us. Focus on them first...

• Your existing customers.
• Your existing candidate database.
• Your best recruiters.
• Your market knowledge and influence.
• Your relationships and wider network.
• Your data and insights.
• Your knowledge and expertise.

These are all commercial assets, assets that we sometimes just don't use their full potential, which brings me to this 2X Business Challenge we are rolling out.

This is about, well before the next big idea, we exercise the true potential of what we already have. Those assets we have built over time, those assets that give us the perfect foundation for explosive, 2X growth, if we just starting using them.

To get you thinking about this now, here are five simple levers where I can guarantee you can find your first 2X opportunity (imagine if you could do all of these over the next 90 days - what compounded impact would that have on your bottom line?!)

• Get more revenue from the customers you've already got (and who actual like buying from you, already trust you and we already have relationships with).
• Make more money from the candidates you already know (do you have a clear staretgy to make every shortlist you present, not one placement, but two?).
• Free up your recruiters to do more of the things that actually create bottom line profit (get out of their way and enable them to get out of their own way!)
• Reduce the squeeze between revenue and operating profit (and get better ROI on the revenue you have already grafted to get in the first place)
• Create new product offerings from the expertise you already possess (because you want to be relevant not just when a customer is hiring - all the time)

Now, let's do some very simple maths.

Let's imagine a recruitment business generating £2m in annual GP is currently making £200,000 in operating profit. That's a 10% conversion rate.

The owner wants to double profitability over the next 12 months and so the traditional response might be to look at how to generate another £2m in GP to double up to £4m.

How do they do that? More recruiters? More clients? More vacancies? More investment?

That is of course, all correct.

But what if we approached it slightly differently? What if we looked at those five levers above and set some very clear improvement targets?

• 2X more revenue from the customers you've already got
• 2X more money from the candidates you already know
• 2X more time for your recruiters to do more of the things that create profit
• 2X more conversion of revenue to operating profit
• 2X the product offerings from the expertise you already possess

Focusing on one of these things in your next sprint will make a real impact to the bottom line. DO a few of them, compounded together, and the results could be fairly explosive.

The 2X Calculator we have built will show you exactly what this could look like and how to get there. 5 levers, 2X the profit.

So, here's your challenge.

Take 15 minutes on your own, or with your leadership team this week. Get a blank piece of paper and discuss / debate the following five questions.

• What can we do to double Customer Lifetime Value (CLV)?
• How do we convert at least one out of every three silver medallist candidates?
• What could we remove from a recruiter to free up at least 2 more days per week?
• How do maximise every £ of spend we have below the GP line on our P&Ls?
• What are our existing customers are already buying from someone else?

Then put some numbers against them. Work out where you are today, what you want to achieve at the end of this 90 day sprint and most importantly, what you need to actually do, deliberately, to get there.

That's the start of your 2X plan.

I genuinely believe the next phase of growth in our industry is going to look very different from the last. The businesses that pull away won't necessarily be the ones with the most recruiters, the biggest offices or the most technology.

The next generation of recruitment businesses won't necessarily be twice as big. They'll be twice as good at turning what they've already got into profit.

That's the Superagency we've been harping on about and that is now your 2X Business Challenge.

So, over to you.

Remember, if you want to join me at one of our free 2X challenge sessions in October and November, then register at https://therecruitmentnetwork.com/events and I'll not only give you a copy of the 2X calculator we have built, but I'll walk you through the playbook as to how to deliver this in your business.

Article by James Osborne