How to plan in an ever-changing market
[This article first appeared in ShortList, the premium news and analysis source for senior recruitment professionals.]
Freeing up recruitment company leaders’ time to focus on big picture business planning has never been more important, according to business coach Stephen Shepherd.
Business planning has become more difficult since the GFC, but multiyear plans are still viable for most recruitment companies if developed and executed correctly, said Shepherd, who is an owner and partner at coaching provider AltusQ.
“In an ever-changing market, it’s imperative that there is some head space sitting above the business, looking down on it [and] looking down on the market, and going, ‘right. What has changed? What is changing? How do we respond to that? Where do I need to recruit people? Where do I need to focus our efforts and investment?'” he told Shortlist.
A lack of time is not a good enough excuse to avoid business planning, and Shepherd advises time-short leaders to draw up a map of where they spent their time over the past three months.
“This could be a half-hour exercise of, ‘I’ve spent my time here. I’ve spent my time there’ and categorise that.
“What’s some of the activity that is revenue generating? What’s some of the activity that is running the place? Or managing day today cash flow, or HR, or all of that operational stuff? And what [time is spent] looking at the next projects that will drive tomorrow’s revenue? And really get a sense on how much time is being spent on the latter,” he said.
If recruitment company leaders find they are not spending enough time planning, they should look at which tasks they can delegate, said Shepherd.
“It’s also having a really critical look at your pay grade. If you were paying someone… else $300k, would you get them to do this and that? And it’s amazing how many times you see pieces that the CEO, at the notional salary of $300k, is doing when someone at $50k could do [those] equally well – and perhaps better,” he said.
“You’re the most expensive guy in here.”
Don’t “set the grand plan” and walk away
Shepherd said business planning is still an essential activity for recruiters, but it has changed a lot since the GFC.
“I don’t think there’s been a single industry where the underlying business model hasn’t been challenged… through that period,” he said.
“For a number of business, they weren’t under as much pressure [prior to the GFC] so were able to be a little bit more reactive. They were able to sit back and let people rely on their reputation that they’d built up over several years, and allow business opportunities to come to them.”
It’s no longer appropriate to “set the grand plan and just mindlessly go away”, but recruitment companies can still work towards long-term goals, said Shepherd.
“Where I’m finding businesses are losing it is they’re going from the three-to-five-year plan, and they’re having big long lists of things that they need to do, which then don’t necessarily get the attention to get executed appropriately.
“There’s been a need for businesses to… have their plans, but make sure that those are rooted inwhat the market’s doing and what their customers are doing, and then secondly bring it right back into, ‘what do we need… to do this year?'”
Shepherd said one exercise leaders can undertake to accomplish that aim is completing the sentence, ‘this year is the year that…’.
“For some people it might be, ‘we need to take charge’, or for other people it might be, ‘we need to catch [our] breath’. For some people, ‘we need to get control’, for other people, ‘we need to get more market focused’,” he said.
Recruitment company leaders can then break this aim down into a handful of actions that will contribute to that outcome, said Shepherd.
“What are the two or three core things that we need to shift the needle on? What’re those projects that at the end of the month [or] the end of the quarter we can look back [on] and go, ‘yep. We’re making meaningful progress here and that’s all linked towards where we need to head as a business’?”
What’s the 90-day plan?
Once they’ve drafted their overarching objectives, recruitment company leaders should get quite granular with their plans, said Shepherd.
“We get our clients, once they’ve got their context for the year and their three drivers, to really come back and work out what’s the 90-day plan? So take it back to a quarter,” he said.
This should include a 90-day plan for the business, but also each division and the company’s key people, he said.
“What are they going to be driving in relation to the overall plan? And be quite precise,” he said.
“Be very clear about what those deliverables look like, and then come together (most people will have weekly or monthly meetings) at least once a quarter to look back and go, ‘how have we gone? How’re we executing against those plans? Is there anything in the broader plan that needs to change based on things that are happening in the market?'”
Ensure the external market informs business plans
Recruitment companies need to take external factors into account when developing business plans, said Shepherd.
“Getting yourself ahead of the curve of any external factors, such as an election, might cover you so when you’re in the middle of it you’re not panicking: you’ve planned for it, you’ve worked through the cash flow implications of it, and if it comes, you’re ready,” he said.
Market research is also important for business planning exercises, because some factors will change year to year, said Shepherd.
“What’s happening out in the market? What’s happening in overseas markets? Sometimes the UK market, or the US market, or the Brazilian market may be ahead of us or more competitive than us, so what are the top companies doing over there? Where are things headed in other jurisdictions? And [recruiters should also be] talking to the clients, and not just [asking], ‘are you happy?’ but ‘what are your business issues?'” he said.
“It’s understanding the customer so you can then innovate against the underlying opportunity or problem.”