Unlocking New Opportunities
In this blog, I will cover why it could be a good time for you to start US contract recruitment if you aren’t already doing so. With over a decade of experience in staffing, split between the UK and the US, I’ve witnessed firsthand the untapped potential that awaits UK firms willing to take the plunge into the American market. Now working in the EOR space for Lead & Gain, I get the opportunity to speak to recruitment businesses every day, all at different stages of their journey, and gain insight into what makes them successful. With that combined knowledge, here is my insight.
A market less saturated
The US recruitment landscape offers a stark contrast to the UK in terms of competition. In the UK, approximately 33,000 recruitment businesses serve a population of 70 million. Meanwhile, the US, with its 360 million residents, is served by only around 25,000 recruitment firms. This presents a golden opportunity for UK firms. When I worked in the UK, I could name my top 10 competitors by their company name and the individuals who worked in the same markets as me. While your biggest competitor in the US is often a client’s internal recruitment team or someone in HR.
Economic growth and potential
From an economic perspective, the US continues to lead globally in growth and future projections, with the recruitment industry expected to grow another 3% in 2024 to $207.2 billion. This growth is fuelled by a dynamic economic environment that offers numerous opportunities for recruitment firms to thrive. The potential for higher permanent placement fees of 20-30% in the US, with an average of around $25,000 compared 10-15% at less than £10,000 in the UK, makes the US market particularly attractive.
The UK recruitment industry is much more established, nearly all clients understand how things work. Compare that to the US, and you can spend a lot of time explaining what you do. US clients in tech will often think that you are an IT consultancy and therefore provide your employees to complete deliverables-based projects. You need to understand your terms of business, certainly the commercials, and be good at explaining how everything works.
Challenges and rewards
In my experience, winning US clients can be more difficult than in the UK, however once you establish a good relationship, they are likely to remain loyal if you look after them well.
The methods in how you recruit don’t need to change too much but you may find it harder to get US clients on the phone so be prepared for a lot more LinkedIn messaging and emails.
Key success factors
- Successful UK firms venturing into the US typically exhibit certain traits:
- Established presence in the UK or EU.
- Strong business development culture.
- Initial focus on working in US markets from the UK to build data and relationships.
- Partnerships with experienced specialists to navigate the complexities of the US 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.
In conclusion, the US contract recruitment market offers significant opportunities for UK-based firms. By understanding the nuances of the market and leveraging your strengths, you can tap into this lucrative sector and achieve substantial growth.
Thinking about expanding into the US market? Want to learn more? Schedule a call with Lead and Gain