Expanding into US contract recruitment can provide perm-only recruiters with a more stable and diversified revenue stream. By leveraging the right support and understanding the market dynamics, you can seamlessly integrate contract recruitment into your services. Here is why you should embrace this opportunity to future-proof your business and enhance your client relationships.
Diversifying into US contract recruitment
As a perm-only recruiter, you might be feeling the pinch of market uncertainties. With inflation, interest rates, and geopolitical factors at play, the recruitment landscape is challenging. However, diversifying into US contract recruitment can provide a steady revenue stream and open new avenues for growth. With over a decade of experience in both the UK and US recruitment markets, I’ve seen how contract recruitment can complement perm-focused businesses. Here’s why you should consider this transition.
Stability in uncertain times
Contract recruitment offers recurring revenue, which can help stabilize your business during economic downturns. While perm fees are higher in the US, economic fluctuations often lead companies to tighten their budgets, slowing perm hiring. Contracts, however, continue to be a necessity for many businesses, providing a consistent income to cover operational costs. My old Director used to say, ‘contract fees pay the bills; perm is your profit.’
Building stronger client relationships
US clients value long-term relationships with their vendors. If you can offer both perm and contract services, you become a more valuable partner. When perm hiring slows, being able to supply contractors ensures you remain relevant to your clients, preventing them from seeking other suppliers.
Quicker market entry
With support from companies like Lead & Gain and their partner 3R, establishing a contract recruitment desk is faster than ever. This means that you can outsource someone to handle billing, client interactions, and payment delays, allowing you to focus on business development and candidate placement. This support is crucial for perm recruiters new to the contract market.
What to look out for when starting US contract recruitment
- The size of the market is so mouthwatering, I understand why agencies want to try to take it all on. However, it’s the businesses that start small and become a “big fish in a small pond”, then expand, that have the most success.
- Capturing a Fortune 100/500 client would be a game changer. However, the logistics of signing these types of companies are incredibly difficult. You see these companies hiring all the time, so you might think it is low-hanging fruit, but it is quite the opposite. You need to understand the terms of business and what you will agree to if you try to work with these companies—deliverables, employing the workers, taking full liability, and some of the worst commercials you have ever seen, just to name a few. You will rarely be able to make red lines, and even speaking to the right person can be a very long process. Be prepared before you start to BD these companies.
- Ever found a fake candidate or fake resume? They exist. Make sure you know and trust your contractors as the reputation will fall back on you. Collecting references can help safeguard yourself from these concerns.
- Successful agencies typically focus on small to medium sized companies where they can easily interact with the hiring managers and get terms signed. It isn’t about pulling a job; it is about pulling a placeable job.
If you’re considering adding contract recruitment to your offering, or want to understand more, book a call with Lead and Gain.