During a troubled economy, where is there economic growth? Like stockbrokers or business analysts, recruiters may wish to take note of where people continue to spend their money even when their salaries suffer. While it’s best not to gear your business around short term hiring trends, keeping an eye to future hot areas of employment is a very good practice. Following potential business growth cycles, not current hiring trends, can build strong client relationships for future success. But how do we follow the money and not follow pockets of hiring activity?
Real business growth can come from unexpected areas. One current example of growth is in the entertainment industry. Six Flags Entertainment just announced a very positive fiscal year. Although many people are really cutting back on their household budgets, they still found a way to send children down water slides and up roller coasters. Six Flags Entertainment Corporation has announced that revenue grew $19 million or 18 percent in the fourth quarter and $66 million or 7 percent for the full year 2010.
In this economy, growth in the entertainment business seems counter-intuitive, right? One would think that the entertainment industry would currently be experiencing severe declines. But it is very important to note an increase in revenues, not operational profits. Analyzing hot money, not hot profits or hiring, is how we can get ahead of hiring demand.
If you are looking for good industries to recruit for and target in your marketing efforts, it’s important to follow upswings in revenue more than the latest hot industry. Instead of looking for areas of dramatic hiring initiatives, look for increases in sales which can lead to cycles of hiring in the near future. If you don’t already work with clients that are very aggressively hiring, it may be too late to approach them. Usually large hiring initiatives are quickly noticed by the recruitment market, and competitors will have already forged relationships. Instead, lay groundwork in companies with very strong fundamentals, so that you can service their hiring needs as they necessarily have to expand their hiring.
Following the money is easy when it comes to public companies. But there is a good chance that the majority of your clients are privately held companies or maybe quite small businesses. You can still anticipate good businesses by looking for these signs:
- Good sector: If you read general newstories about big companies, take note of the sectors that they are in. For example, the big revenue jumps at Six Flags probably don’t mean too much to you. However, you might know of local theme parks, movie production companies, sports complexes, etc… that may be experiencing similarly strong sales growth.
- Coopertition: Pay close attention when you see clusters of similar companies spring up in a particular area. If you see two new medical device manufacturers start up close to another medical device manufacturer, you are witnessing coopertition – a combination of competition and cooperation. One business experiences growth and others follow. When clustered locally, similar companies feed off of each other – building the local professional talent pool and creating strength.
- Investment: Besides sales, watch the dollar flows of venture capital and other funding sources in your locale or industry. Often it is not just the companies that receive funding that you should be calling on, but rather a cluster of similar companies. Investment signals potential sector growth – when you see funds being invested, you should form relationships with a group of similar companies.
In agency recruiting, you always want to do something during the day that will make your life easier tomorrow. Working with clients with high current hiring activity is necessary, of course… However, hiring cycles tend to end quickly – if you see very rapid hiring with one particular client, you should make sure that you keeping your relationships strong elsewhere. If you follow the money instead of only following hiring activity, you build your future instead of only making placements. Reserving at least a part of your day for following the money will ensure you are “in” with all the right companies before they start hiring.