Many staffing agencies decide to steer clear of the low margin high volume recruiting strategy. This is largely due to the low return per placement. Instead, they focus solely on roles that are fewer in number, but higher in fee value. Whilst this is an effective recruitment strategy, it doesn’t have to be one or the other.
It is possible for recruitment companies to adopt the low margin high volume recruitment model whilst still landing the high revenue. It should be said, however, that due to the lower fees, recruitment companies should be careful to implement certain strategies and processes to maximise their profits.
If not executed effectively, staffing agencies run the risk of damaging their reputation and revenue.
What is high volume recruitment?
High volume recruitment is when an organisation wants to hire a large number of employees, usually within a short period of time. Usually these jobs roles comprise of junior to mid-level employees.
Due to the large number of employees up for hire, recruitment companies can usually expect a low margin per head. The profitability doesn’t lie in making a single placement, but rather in achieving a high number of low fee placements.
Why is now a good time to start high volume recruitment?
In every crisis arises an opportunity. Since the outbreak of COVID-19, certain industries have seen a demand for more employees. Most notably, the online retail sector saw an increase in demand triggering companies like Amazon to hire high volumes of staff.
Sectors carrying out high volume hiring
- Pharmaceutical
- Online retail
- Supermarkets
- Healthcare Manufacturing
- Light industrial
- E-commerce
- Supply Chain
Different types of low margin high volume jobs
- Customer service
- Drivers
- Warehouse workers
- Factory workers
- In-store personnel
Companies hiring high volumes of staff throughout pandemic
- Amazon hired over 420,000 employees in the space of 10 months throughout COVID
- Online pharmacy CVS announced plans to hire 15,000 employees for winter 2020/2021
- Walmart hired more than 400,000 employees by mid-July 2020
- Papa John’s hired over 30,000 employees at the height of the pandemic
- Instacart planned to hire 300,000 employees to respond to rising demand in home grocery deliveries
- Food and drug retailer Albertsons hired 55,000 new employees at the outbreak of the pandemic
- UK supermarket Tesco has hired approximately 60,000 temporary and permanent staff including factory workers, drivers and in-store personnel
It’s clear that, despite the difficulties of 2020, certain industries have been affected positively and now require higher volumes of staff to respond to the new demands.
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Challenges of low margin high volume recruitment for staffing agencies
Despite the financial potential, there are many reasons why recruitment companies are not seizing these lucrative opportunities:
1. Low margins
One of the most challenging parts of low margin recruitment is making it profitable. Low margin jobs are centered around low salaries, and therefore recruitment agencies need to successfully place a ‘high volume’ of candidates for the strategy to be profitable and worthwhile.
2. Costs
In order to accommodate the demands of this type of recruitment, agencies may need to train and hire more staff, as well as purchase new software to manage the high volume of candidate applications.
3. Candidate experience
Every recruitment agency should prioritise their candidate experience. One of the challenges of hiring large numbers of staff is that, unless the agency has implemented the necessary processes and systems, it becomes very difficult to ensure each candidate is handled with care. This can damage your reputation both with candidates and clients alike.
4. Headcount
Agencies have had to pass up on high volume opportunities because they don’t have the internal headcount available to immediately respond to the client’s requirements. Agencies who are new to high volume recruitment would need to hire a new permanent member of staff and train them before being equipped to respond to demands. By the time this has been achieved, the client has found another recruitment company that’s already equipped.
5. Last-minute roles
With high volume recruitment, new roles often arise last minute. Agencies may need to ensure they have staff on call to respond to urgent roles.
6. High volume systems and processes
High volume recruitment requires a different set of systems and processes than regular recruitment since there’s more last-minute paperwork involved. Unless there is a streamlined process, agencies will struggle to meet the requirements and will encounter problems with compliance.
7. VMS Environment
In the USA, most VMS recruitment jobs will be low margin, but high-volume jobs, and if you want to succeed in that environment, you will need to fill them.
How working with IMS People can benefit your agency
Here at IMS People Possible, we’re experienced in helping recruitment agencies respond quickly to demands in high volume recruitment.
Over the years, our client base has ranged from large staffing companies that are used to high volume recruitment, to smaller agencies that have limited experience in this area.
So how could you benefit from working with us?
- Trained Resources – Our dedicated resources are experienced with low margin and high volume recruitment. They are experienced to work in specified timelines and also trained to work in VMS environment.
- Available round the clock – We have dedicated teams that operate round the clock to ensure your vacancies get filled at the quickest possible rate. We’re also available to support when your own staff are on leave during the holiday seasons.
- Adjustable team size – Instead of having to go through the process of having to hire a new permanent member of staff, when you work with us you can easily increase or decrease the number of recruiters working on your account. All you have to do is ask.
- Flexibility– Reluctant to enter into a long-term contract with an outsourced provider? We don’t lock our clients into long-term contracts. You always have the flexibility to adjust or end the contract on a monthly basis.
- Low cost – Recruitment agencies that partner with us save money since they don’t have to invest in Infrastructure or new members of staff.
- Quality – As part of our process, we conduct thorough candidate mapping to ensure we source the most fitting candidates. Many of our clients partner with us on a long-term basis after experiencing a significant return on investment. You can view how other recruitment companies have benefited from our services here.
It’s understandable why staffing agencies shy away from low margin high volume recruitment. They prefer to pursue the roles that guarantee a high fee value, rather than restructuring their business to accommodate the low margin roles.
But whether you’re an agency that’s experienced in low margin high volume recruitment, or you’re completely new to the arena, there’s a huge opportunity for staffing agencies to increase their profits by capitalizing on the changes in today’s job market.
Through our services, we have shown agencies across the US and UK that you don’t have to choose one single recruitment model. You can continue to focus on your high ticket roles whilst outsourcing your low margin roles, and experience the best of both worlds
The end result? A truly profitable, hybrid recruitment model!
To enquire about our outsourcing solutions, get in touch with us here.
