Managing Risk at Your Desk

Mar 1, 2008

Whether you own a recruiting firm with ten recruiters or you work a desk, you’re managing a business. Successful business managers regularly consider the strengths, weaknesses, opportunities, and threats of the business they manage. By regularly reviewing and reacting to the four aspects of business, they can maximize the strengths and opportunities and minimize the weaknesses and threats. In hot markets, even poor managers can be successful without this assessment. In changing markets, often the most skilled have trouble. In changing economic and employment markets, it is imperative to assess your situation and react to your assessment.

Assessing your strengths and opportunities is enjoyable. Consider what you like most about recruiting and what you do best. Those are strengths and opportunities. Determine how to maximize these and then do so. Most recruiters are optimists, and this will come easily. The tougher job is facing and evaluating the things that can derail your business.

The number-one risk I see in our profession is that recruiters get complacent with their customer base and stop trying to upgrade and add to their client list. I have known great recruiters who have been so busy making placements with one or two clients that they put their marketing efforts off for years. Then the day came when that client no longer needed recruiting services, and these recruiters watched their businesses dry up. Savvy business managers fix this issue before it becomes a problem.

I became a recruiter in September of 1991. By January of 1992, I had my first big client. By December of that year, I had filled 18 positions for them and was enjoying my success. I figured I had it made – I’d ride this gravy train into retirement. In January of 1993, the client invited me to lunch, and he’s buying. I knew it was to tell me how well I’d done and to say thanks. Well, it was, and he did. Then he spoke the words that ruined my lunch and my plans for the year: “Our company has decided we spent too much on recruiting fees, and we’re not using recruiters this year.” It took most of the year for me to get back on track.

You’d think that I would have learned my lesson, but by 1994 I had found another gravy train, and 12 months later, it dried up, too. This time, the company didn’t even have the decency to buy me lunch. I learned my lesson. I try to keep a stable of clients, perhaps too many, but I don’t want to get caught short ever again. Anybody remember 2001? More recruiters got caught short of clients than ever before. Even many of the busiest recruiters saw their client base dry up.

I checked in with two industry leaders about this topic during the last few weeks-one national speaker and one leading recruiter coach. Both told me that successful recruiters typically invoice seven or eight different corporate entities each year. In my opinion, that number is low. I recommend double digits.

Important questions

Look at your placements for each of the last two years. Consider placements and placement dollars, as they may be disproportionate. You need to consider both to manage your risk.

– If you lost your biggest client tomorrow, how would it impact your business?
– If you lost your top two clients next month, could you reach your production goals for this year?
– If you lost those two, would you have to change anything?
– Are you actively recruiting new clients each month?
– How successful are you at turning prospects into paying clients?
– Do you have enough quality prospects to replace your key accounts?

Key numbers

If any client is more than 25% of your business, you may be in trouble and you are at risk. If two clients are more than 50% of your business, you’re probably on thin ice. Few things last forever.

Strategies for success, for the brave and the not-so-brave

For the brave . . . If you’re willing to make the marketing calls or put forth other proven marketing efforts, then now is a great time to start. Look at your strengths and market to your strengths. Determine whether you should be marketing deeper in your niche (getting more clients just like what you have) or if you should be marketing wider (getting customers near what you specialize in, but expanding your base). Then make the calls. By considering your strengths, your resources, and the viability of your niche, you will be able to determine which way to go.

For the faint of heart and those who simply hate to market . . . If you just can’t stomach calling someone you don’t know, then you have two options: internal and external referrals from happy customers. By internal, I mean other decision-makers in their company. The internals will be easiest to get and will reduce risk a little; the externals will reduce your risk greatly.

For those who won’t do either of these . . . Renew your relation-ships with every decision maker who you’ve worked with during the last five years. Check in, make certain they know you’re still around, and see if they have needs.

Doing nothing is NOT a strategy

It is late January as I write this. If you’re already building your client base, you’re probably on your way to a great year. If you’re not, there’s still time.

Savvy business managers assess risk and implement risk-reduction strategies so they can have greater amounts of success and fewer tragedies. Those who are not proactive are at the mercy of the markets and luck. I don’t recommend managing by luck.

Dan Simmons, CPC, president of Continental Search & Outplacement, Inc., in Baltimore, Md., is one of the most successful recruiters in Top Echelon, having won numerous production awards during his tenure with the Network. Simmons began recruiting in 1991, and he’s been a Member of Top Echelon since 1996. He’s also a Board Member of the Maryland Recruiters Association and a member of the National Association of Personnel Services. Continental Search recruits top talent for companies across the nation, recruiting Sales, Technical and Management professionals from the entry to executive levels for direct hire or contract positions in the Animal Health, Animal Nutrition, and related industries. It also assists companies in the Baltimore/Washington, D.C. area recruit Information Technology professionals. Continental Search strives for an intimate understanding of its clients, supplying candidates who possess the skills, experience, and personality for success. For more information, visit

Get articles like this
in your inbox
Subscribe to our mailing list and get interesting articles about talent acquisition emailed weekly!