Adapting to the environment is critical to thriving
This past summer I was privileged to be able to check off one of my bucket-list adventures, a trip to the Galapagos Islands of Ecuador, along with a side trip to the Amazon rain forest along the banks of the Napo River, which feeds into the Amazon River.
One of the things hammered home to me was how symbiotic these special environmental ecosystems were.
On the Galapagos Islands we had the opportunity to get up close to marine iguanas, unique to the islands, who have adapted to the harsh environment to eat marine plants to survive. Nowhere else will you find such creatures. Descendants of land iguanas who somehow crossed 600 miles of sea, they had to change their diet and mode of living to survive. They now thrive in a fragile, interdependent ecosystem thanks to their adaptation. They’ve found their niche in the ecosystem.
Similarly, your staffing and recruiting can thrive by adapting to constantly changing business environments. The key to this is finding the most profitable niche for your staffing and recruiting agency within the business ecosystem. Jim Childs, Partner of Childs Company, a long-term veteran of the staffing industry as a CEO and investment banker, has stated, “Niche staffing and recruiting companies are always more valuable than generalist companies.” Childs further points out that, “The specialty players can have gross margins well over 30 percent due to their specialty focus and their mix of permanent placement revenue.”
Of course, becoming a niche player in the staffing industry is not without its challenges. You must develop a level of stellar expertise in your niche that makes you and your team more desirable to your customers than your competition. And you must deliver the quality candidates needed – always. Of course, in a singular niche you may not have much competition — which is key to profits. Also, you must be willing to give up other staffing and recruiting opportunities to be a niche specialist.
The point is that you must focus yourself and your team on your core niche competencies. That means that everything not central to the niche you target should be something you stay away from.
Where do you start? What kind of niche should you focus on? Perhaps one of the first places to look is http://www.bls.gov/emp/, the Bureau of Labor Statistics’ National Employment Matrix, where you’ll find occupation and employment projections for the next 10 years. There are plenty of potential opportunities there for staffing and recruiting agencies to develop their expertise within. Maybe one will suit yours. Or maybe you’ll have to study further to discover the potential for your agency.
This is important because the world of work will change dramatically over the next ten-to-twenty years. AI-based systems will replace many low-to-mid-level sales and customer service roles. In fact, a cursory review of employment projections shows that you might find the most profitable recruiting niches to be in healthcare, personal care, and related fields.
Perceptive staffing and recruiting agency business owners and managers who stay obsessed with being the best in their niche will reap the financial rewards of leadership.
Of course, you can always do things the way you’ve always done them. In which case there’s a good probability you’ll end up like this poor fellow below. He didn’t change.