Is it good for a HR Consultancy to focus only on a single business model ?
One business model in the sense like just providing services in executive search, or should it expand in all the possible ways like temp staffing, consulting, training, hr process outsourcing etc?
Answers (23)
Any business model should focus on what they do best and in the case of recruitment if this is executive search then diversifying into other areas may (but not always) dilute the quality of the service.
Like with anything in life - if you want someone to take you truely seriously, particulalry to pay money for your service or choose you over someone else then do what you do best!
Looking from the strategic prospective every consultancy should first strengthen the business in what they are as in if theye are into executive search they should grab a chunk of the market share and then they should diversify as business expension should be both organic and inorganic after a certain level organic growth is not possible it has to be done by inorganic way through diversification mergers and acquisition.
Executive search firms can look into these areas
1. OD Consultation
2. HR Auditing
3. Staffing and Resource management Consultating
4. Legal Process out sourcing
5. Staff training and Development
Definately In Business there is only thing constant that is change and to cope up with the market one has to aim to grow and diversify. But most of the businesses die an early age because they don't strenghten their core areas and try to diversify at the early age itself. So the growth has to be steady and constant
Hi
Depends on the strength of the team and financial support to move forward
Thanks
Sunil
Greg D
SVP Sales, Sales Performance Advisors. Creating Quality Sales Cultures
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If you have the competencies you should offer the service. However, I would always lead my offering where my strength is and use the other services to broaden and deepen my relationship with clients.
Two functions are valuable across almost all industry lines...HR and Sales.
Would you rather be known as the best in one aspect across industry lines or the best generalist in one industry?
Josh C
General Manager at Web Industries; Itinerant Writer; and Decent Little League Coach
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It depends on how you define the model and what the consistent themes are. Each firm should work on its own particular business model and philosophy, but depending on how the market is defined, there could be a number of complimentary services provided.
Josh.
I agree with Christine. To have a core competency is preferred in any business, not just consultancy. But I also think that once you have placed processes in place for your core competency you should go ahead and explore other areas.
It is good to diversify provided you have the resources to diversify in to various other activities.
Chandrabhushan B
Sr. IT Recruiter at Kudos Training & Placement Services(chandrabhushan2007@gmail.com)
Single business model is not effective in HR...try to expand in all functions..
Sridhar R
Founder-Director at SMB Enablers, The Outsourced CXOs http://smbenablers.com/
It really depends on the profile, expertise and the vision of the promoters/CEO.
If the profile and the expertise of the promoter/CEO is the one of strong executive hiring background, such organisation would like to focus on only Executive Search. On the other hand, if the promoters come with diverse background in HR functions, they may like to start and expand the enterprise in all areas like temporary staffing, consulting, training, hr process outsourcing... Finally, it also boils down to the vision of the organisation as to where they want to reach.
Hope this clarifies your query.
A HR Consultancy specially in times of recession can always fallback on its other services like temp staffing , HR process Outsourcing HR interventions,Evaluation etc if the core business ie executive search is not able to provide sufficient revenue. Expansion is important , but the quality of the services provided has to be maintained as one will be providing the entire range of services to the client, so if one fails to keep up to expectation of the cliant in one of the areas , the client might not subscribe to the other services on offer.
hi,
i think they should align to all the models
André V
Recruitment projectmanager at Schuitema
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What I miss in the answers is what does your current client base expect? Servicing the wishes of your clients is always the first rule of succes and long term relations.
The second thing is to look at your internal goals and expertise. I firmly believe in marketknowledge and therefor am an advocate for specalisation. It is also easier for consultants to become succesfull in one field than in multiple fields.
From the corporate side my experience is that the generalists deliver less results than the specialists.
Having said that I do realize that from a business model it is easier to generate more turnover as a generalist than as a specialist. However the margins for a specialist should be higher.
So it depends on the strategic goals. Are you looking for turn over and quick wins? Then generalize. Are you looking for longer term higher margins then: specialize, specialize and specialize.
Andre
Octavio B
Corporate Strategist ★ Business Leader ★ Management Consultant
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Hi Karthik,
From my professional perspective as a management consultant, I have realized the value of world-class consultancy, offering professional services based on business Best Practices.
By doing so, any reputable consulting firm should offer such a services taking advantage of its core competencies, and considering that the framework on which organizations take decisions requires from updated knowledge and practices from consultants.
A HR Consultancy strategically oriented should be focused in helping to its customers to develop and deploy the best practices based in updated knowledge of subjects of Talent Management such as Employee Brand Management, Employee Performance Management, Employee Engagement, Change Management and Competency Management, that are relevant, pertinent and needed for troubled organizations, facing the tough repercussions of the current economic recession.
It is a nonsense that a HR Consultancy may be competitive by assuming a strategic profile and at the same time decides dedicating resources to fulfill the needs of a transactional HR Department, as is usual in offering outsourcing payroll, outplacement and services of hiring and recruiting.
A certain degree of specialization is advisable for a HR consultancy that wants to be competitive in satisfying the needs, either transactional or strategic of its corporate customers.
Relevant to a HR consultancy with strategic focus, I am including links to 3 questions, I have posted time ago in Linkedin Answers:
1. In what terms initiatives of Employee Engagement can make a difference in times of economic recession?
2. How would you create a sustainable Competitive Advantage by applying Competency Management?
3. Does the current economic meltdown justify a slowdown in Talent Management practices?
I hope that helps.
Octavio
Links:
Its all vision and need oriented!!
Its again to do with what is the existing business model and competency(s) available at the HR Consultancy in discussion.
If you have a mix and HR, Engineers and other professionals in your organization ( not the those with degrees but with actual functional experience) then what ever business model the organization has - must be doing good. If it is not the case,then the situation calls for revamping business goals, address dead wood and then to adopt next model mix.
It will be ideal to try out a mix and then look at the areas to specialize.....of course, TM-Top Managements (MAN's) commitment to success is mandatory. If not of their (his) direct involvement in mentoring and empowering no mix or single specialization will work given the market conditions being what they are!!
USP-BRAND-QUALITY-PRICE-SERVICE can all be build on "sum total competency" of individuals of the organization and never on being active in blogs, meetings and seminars etc. People know professionals from Quacks in matter of days.
I thus believe strongly that and mix will work as long as we bear in mind that Consultants are paid for results and hardly on efforts!!!
Janaki G
HR Professional
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Its better to focus on all the models as you grow in size. There may be several clients who may want all the services on a one stop shop basis. However in case of HR consultancy its better not to restrict yourself to executive search alone. What if recruitment runs out of business?
I think everything depends on the time, if the time is bad well laid strategies also fail, but if time is good even a small initiation can do wonders. Recession has wiped out biggest companies, were they not strategically right? We should be prepared for the worst, so depending only on single business model in today's time is very very risky thing.
Specializing in any thing doesn't make you total risk free. There should be a back up plan for a company to survive, be it working on different business models, strengthening the weaknesses or being strategically right.
I believe that this would entirely depend on your business strategy. However, if your business markets itself as an HR consultancy then I would expect it to offer the range of services provided within the HR umbrella: employee relations; employment law; training/development; recruitment; outsourcing etc etc. There may be areas of specialism but to develop a true partnership relationship with your clients, even if you don't have the expertise yourself, you need to be able to call on associates that can deliver what your client requires. For long term sustainability it's important to diversify and push the boundaries.
Isaac M
General Manager at Career Options Limited.Contact me (imuchina@linktoalljobs.com)
Good business model should focus on the competitive advantage. Diversification will only be rewarding if there is a clear competitive advantage and is done at areasonable price.
Strong competitive advantage is only achieved by having low costs and/or doing something different from the competition. This must add value to the customer, who then pays a premium price. He is glued to the company, which will earn dependable revenue streams and be in the profit zone.
Before diversification to other areas the following should be carefully considered: skills of existing employees or resources to acquire new skills, recurring revenues, sticky customers, product differentiation, competitor’s weaknesses and your market niche.
I think it depends on what stage the business is.
Each business can be classified in 3 stages on the basis of its stability under stable market conditions-
Infant - Start up - lots of commotion,ideas around
Rapid Growth - when things finally seem taking shape
Stable Growth - stable business returns
So if it is well established with a good client base and a good turnover, it surely would be a very good option to venture out and explore the options finally choosing one that suits your organisation most aptly.
If it is a start-up or in the rapid growth phase i feel it should be given enough time to get into the groove.
At this stage i would like to focus most on the core competency which the organisation started out with.
To excel in the same to a level that you become a preferred vendor for your clients would be a target.
Once such a stage reached, venturing into other related services would be easier on the fact your current client base would act as the seed client base for your new propositions.
Manish M
Head - NON IT Recruitments at A leading Search and Selection firm
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I believe a lot depends on the evolution of the consulting firm. In case, it has been a mid or a large capital involving firm, it can always start with a variety of services. However, in the case of most consulting firms, there is one specialisation which has seen them excel over the years. An executive search requires a very different platform that cannot be set for a staffing activity. Similarly there lies a lot of fundamental difference between a mass hiring activity and lateral hiring. It is always wiser to pick that one field of excellence. Expand only when you have the right resources, experience and capital to do so. To add more to this, any search firm is best known for one excellence. An egon Zhender for example has never been heard for staffing. The whole brand positioning goes for a toss if firms of repute start experimenting.
The core area of any business(in this case executive search) should be strong enough before diversifying in other related field.At the same time if the diversifying is not at all a bad idea provided one has the resource to give high quality of service in this area i.e Great Team, finance,
and leadership skills.I emphasise on the team coz when you have a good team to deliver you can do wonders when in process of diversification.Finance comes the second in my opinion as the breakeven and later on profit will come automatically.
Nandan V
OD & HRD Consultant. Principal Consultant, PASAYADAN (Consultancy & ExpertSourcing™ )
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rule #1: Develop on core strength and then move on to another then another... one at a time.
Rule #2: In recession days, normal rules do not apply. Do all that is ethical/moral and will help u keep nose above the water till tides are low again.
Hi Karthik...
Well... It all depends upon few strategic factors viz., Financial Back Up, Expertise at all level, Time & Market Demand (read it as YOUR CLIENT Demand).
If you think you without compromising with the quality, can move forward & can explore the new horizons then you should but again not at the cost of QUALITY as there are only two ways on earning in our CONSULTING business either its QUALITATIVE or its QUANTITATIVE.
It depends upon you how to take it further... As a man is the best judge of his own potentials....
Regards,
Dipankar
