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If you’ve been in recruitment or labour hire for a while, you’ll know that downturns come with the territory. Rising costs, hiring freezes, and delayed payments can make even the most stable agency feel shaky. The real question isn’t whether tough times will come, it’s how you’ll respond when they do.
In my experience working with these types of clients, the agencies that survive and even thrive in a tough economic climate aren’t the ones who panic and slash costs at random. They are the ones who double down on discipline, protect the parts of the business that create real value, and make smart moves that set them up for recovery.
Protecting Core Strengths
The instinct in a downturn is often to cut fast and wide. But over the years I’ve seen this backfire. Cutting too deep into business development, service delivery, or candidate care might look like a saving today, but it erodes the very foundations that generate tomorrow’s revenue.
The businesses that come through stronger are the ones that keep their client relationships front and centre, invest in candidate experience, and maintain visibility in the market. Protecting these areas ensures you’re still top of mind when the market rebounds.
Getting Cash Flow Under Control
Cash flow is always the pressure point in uncertain times. Delayed client payments, higher wage costs, and tighter margins can create a perfect storm. I’ve worked with agencies that turned things around simply by getting tighter on invoicing, shortening payment terms where possible, and making use of funding tools like invoice finance or payroll funding to smooth the gaps.
Having clear, real-time visibility of cash flow, not just a month-end snapshot, allows you to plan with confidence rather than react in panic.
Cutting Waste, Not Value
There are always areas where savings can be made without hurting the business. I often see this in unused office space, duplicated tech platforms, or overheads that crept in during better times. Trimming these back can free up cash without touching your core.
On the flip side, the agencies that get into trouble are usually the ones that cut people too quickly. After all, your team is your biggest advantage. Keeping them engaged and supported is vital, not just for survival, but for growth when things improve.
Building Flexibility into the Business
A rigid cost base is dangerous when the market is unpredictable. I’ve seen agencies benefit by outsourcing low-impact functions like IT, bookkeeping, or even admin support. Others consolidate their tech stack to simplify workflows and reduce duplication. The outcome is the same: a business that can flex up or down without breaking.
My Final Thoughts
Tough economic climates test every agency. But they also create opportunities for the ones who stay focused, disciplined, and intentional. By protecting core strengths, controlling cash flow, cutting waste not value, and building flexibility, you give your business the resilience to weather downturns and the agility to seize opportunities when recovery comes.
At Apositive, I’ve worked with agencies from start-ups finding their feet to established players navigating market shifts. If payroll pressure, cash flow gaps, or system inefficiencies are making things harder than they need to be, there are proven strategies to help you not just survive, but come out stronger.
Get in touch with us today to see how we can support your agency through the challenges and help position you for the recovery that always follows. get in touch with our team today
