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Choose Your Niche Wisely

When I entered the recruitment industry, I was a jack of all industries.

Essentially, I would place any position in any industry.

In episode 14, I spoke about bringing in an annual billing of S$240,000 but it took 20+ positions to achieve that figure. The average billing size was low because I wasn’t specializing and took on anything that comes.

In retrospect, that wasn’t a good plan at all but I didn’t know better.

If you are in this position now, I will teach you about the importance of choosing your niche wisely and quickly.

Instead of headhunting in all directions, it serves you much better to be a subject matter expert in targeted domains. Make sure you have your core niche and as a backup, a secondary (non-related) niche. This way, you cover your base in case of market fluctuation.

Never put all your eggs in one basket. This principle is timeless.

When it comes to choosing a niche, most recruiters follow what they see and hear from other recruiters. It is a bad idea to follow because following others never put you at the top.

Here’s an example to explain why I said so.

Lead Recruiter: “Pharmaceutical companies are killing it and making a ton of money. Let’s build a pharmaceutical practice!”

A statement like that resulted in a bunch of recruiters flocking there, only to find that it is cut-throat difficult. Pharmaceutical companies are big and they have no qualms about using a preferred supplier list (PSL) comprising of 5-10 recruitment agencies. Whoever recruits successfully for them is immaterial. Their concern is on the end result - who can make the hire in the shortest time, at the cheapest rate.

In short, most recruiters struggle to get into the PSL only to face the stark reality. You are really no better off.

Your chance of placing any position depends vastly on your luck, regardless how fast you can work. Another recruiter who doesn’t work that hard can get the win simply because he just happened to connect the right candidate.

It is tough when the niche is promising, as who wouldn’t want in?

For me, I learnt it the hard way. If it is too promising, it probably is. You should avoid it and head for the blue ocean.

Blue ocean in recruitment would be the evergreen industries that fewer recruiters are involved in. An example is cold chain logistics. I will explain why it’s the blue ocean. Let’s read on.

During the pandemic, the demand for cold chain logistics (necessary for temperature sensitive goods) went up while almost everything else came to a standstill. While many companies were downshifting and laying off thousands, the cold chain logistics companies thrived and enjoyed a profit margin better than pre-Covid. Post Covid, their profits are normalized but they are still profitable and not showing any signs of slowing down.

If you have been recruiting for the cold chain industry, it would have kept you busy and profitable.

However, none of us has a crystal ball on such matters. That’s true but by applying the 80/20 Thinking, you can set yourself apart.

Observe the market and figure out where the 20% is. These are the industries that are creating the 80% growth locally or globally. Find them, and study their revenue potential. You naturally come to this conclusion:

That if potential is high, a lot of recruiters are already competing, creating a red ocean. There is little point to jump in unless you have an unfair advantage, such as a strong network of willing and relevant candidates whom only you have access to.

Most of us doesn’t have that unfair advantage, it takes an immense amount of effort over time to amass that kind of overpowering network and resources.

Neither did I. But this is what I did successfully and I’m sharing this strategy with you. Instead of targeting these blooming niches, aim slightly to the side and find supporting industries that are thriving because of the original niche industries. Target these support industries instead. The payoff is much better and less competitive.

This is why the cold chain logistics took off as shared above. The pharmaceutical industry is the catalyst because it requires cold chain solutions and thus when pharmaceutical industry experiences massive growth due to the exponential need for medical supplies and vaccines, connected industries like cold chain took off without skipping a beat.

You don’t have to swarm to the same place.

p.s. Follow me on LinkedIn and DM “The Solo Recruiter” if you are in a red ocean niche and wanted to pivot to a profitable blue ocean.

Joo Kwang
​Author of Solopreneur’s Guide to Recruitment Business

​About this newsletter: You are receiving this email because you subscribed to my weekly TSR (The Solo Recruiter) newsletter. Every week, you learn the strategies that successful recruiters use to grow their businesses. So you can also do the same and launch your business.