As a fresh faced Accounting and Finance graduate looking to move into finance recruitment, I never thought that the most useful module I had studied would be completely unrelated to finance – Strategic Management.
I soon discovered the highly competitive nature of the finance recruitment market in the Midlands, and began to apply what I had learned in strategic management when looking at potential employers.
I learned that a business can’t achieve sustainable success without creating and maintaining a competitive advantage. This is the reason why companies like IKEA, Apple and Virgin group have maintained success over the years. IKEA sell a superior product at a lower rate than their competitors, Apple gained their advantage through innovation and maintained it through brand popularity, Virgin Group have used their strong brand image to diversify their offering into multiple markets. On the other side of things, there is a reason why we hear about the struggles for companies like Yahoo, Toys R Us and Blackberry – they have all lost their competitive advantages.
Having a competitive advantage is arguably more important in service based industries, such as recruitment. Michael Porter wrote about 3 main strategies that businesses can use to create and maintain a sustainable competitive advantage: Differentiation, Cost Leadership and Focus.
Differentiation: Offering a different level of service to others – whether this is offering financial or sector specific expertise, pre-screening or interviewing candidates or developing trusted relationships in advance of the need to recruit/search arising.
Cost leadership: This is not necessarily being the cheapest agency – if the cost is low but the quality of service isn’t there, the agency likely won’t achieve repeat business. If a candidate isn’t a good fit or drops out, their employer may end up recruiting again anyway – getting the hire right first time could save you time and money.
Focus: Concentrating on a particular niche market – this may be a focus on a level of qualification, on a specialism (eg. Internal Audit) or on a particular geographical area.
This isn’t just theory, I’ve seen it in the classroom and now in the real world. if you don’t stand out from your competition, they’ll stand out from you.
Are you doing what it takes to stand out?
Author: George Fountain (Consultant – Qualified Finance)