Diversify Your Staffing Business by Adding a Niche (or Two)

Last week, I discussed the importance of diversification in business. When times are good (and right now, the staffing industry is experiencing tremendous growth), companies often become complacent and rely too much on business from just one industry or one client. In that situation, a company is more vulnerable than competitors who have multiple clients spread across various industries.

Having a narrow client base can be detrimental—or even deadly—to your company if your status quo changes. You’ll be ill-prepared to weather a huge shift in the industry you cover or the loss of your top client. So how do you prepare for changes that come your way (and trust me, change always happens eventually)? Diversification through niche development.

Niche staffing entails specializing in staffing a certain industry (e.g., solar energy, nursing, administration) or people with a particular skill set (e.g., structural engineering, customer service skills, pharmacy experience). I recommend creating one or two subbrands that specialize in well-defined niches. To be clear, I don’t mean you should just add “IT and Finance” or “Administration and Light Industrial” (or the name of some other field) to your business card next to the line stating your current specialty. I’m talking about building a new brand that falls under the umbrella and management of your core company but functions as a true niche staffing company.

Once you’ve decided on a niche, your goal should be to become the “go to” agency in that area for both companies and candidates. For anyone who wants to fill a position or find a job in your niche industry, your company should be the first one that comes to mind. Anyone who has or needs the particular skill set you target you should want to call you first.

Building a niche will take a bit of work. These tips, based on my experiences in the staffing industry, can get you started.

Don’t “fake it til you make it.” Build your niche around an in-demand industry or skill set that either you or someone on your team understands well. If your company doesn’t already have a person with this knowledge, hire someone who does.

Know when to turn down business. If the job order isn’t in your wheelhouse, politely decline the business (and, if possible, refer it back to the parent company).

Identify the A players early and often. Before you start selling your new service, spend some time identifying the top companies where you’ll find the top candidates. They’ll serve both as clients and recruiting pools.

Build relationships that last a lifetime. The person you place with a client today may be calling on you in a year to hire someone for her own staff. Have a process in place to build and maintain these relationships.

Never stop learning. True niche recruiters are regarded as consultants. Make it your goal to know your niche better than the hiring managers you’re calling on.

Create a separate brand. I mentioned “building a new brand” earlier, and here’s why: creating a separate brand will allow you to focus on the performance of the niche and will reduce confusion in the market.

I hope you now understand why putting all of your eggs in one basket can be dangerous for your company. It doesn’t matter what size those eggs are or how prettily decorated they may be: if that basket slips from your grasp, you’re in trouble. By diversifying your practices through niche development, though, you can protect those eggs—your business—and lay the foundation for a successful future.


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