North America – a Niche Recruitment Growth Opportunity

North America – a Niche Recruitment Growth Opportunity

As the domestic recruitment market becomes challenging for many UK businesses and our relationship with mainland Europe remains uncertain, we’ve seen more recruitment companies looking to expand internationally.

Asia and the Gulf States have become popular markets to explore, with Dubai a common first step for many in the Energy, Finance, Aviation, Aerospace and Technology sectors. Increasingly though, UK recruitment businesses are looking westwards towards North America.

North American Economy

The US economy has typically had annualised growth rates of 3.2% over the past 40 years and suffered from critical skill shortages for some time. Despite the recent upheavals on Wall Street, the U.S. economy is predicted to grow in 2019 at 3.7% according to the IMF. The UK niche recruiter models are ideally set up to exploit these opportunities, so why has there been reluctance?

Traditionally, this has been a tough market to crack for UK Recruiters due to expensive start up costs to establish U.S. operations and the complex legal and compliance systems. Unlike the UK, in the U.S. there is a three-tiered legal structure of Federal, State and Municipal Laws. The risk associated with this can be difficult to navigate, and many a UK recruiter has fallen foul of this intricate maelstrom of legislation.

Companies who successfully overcome these challenges and have plunged straight in and opened a U.S. office have had mixed fortunes. Several have experienced the combination of high operating costs and slow market penetration becoming too much of a burden on their UK business and have been forced to withdraw.

The costs of getting it wrong have been huge for some businesses. In addition to the federal, state and municipal tax challenges, there are also repercussions should you “misclassify” your workers as happened with FedEx in 2016 costing them $240m in 20 states.

How can you make it work?

In 1989, I was charged with opening a North of England office from an attic office in Bristol. Economically, the UK was diving into a recession. Working with a team of two recruiters we were successful in securing 50+ technology contractors from our southern base and on 28th January 1992 we opened our office in Knutsford, Cheshire. We were profitable from day one and expanded to bigger and greater things. Both of my start-up recruiters went on to become industry top billers and COOs.

Today the same model is being employed by several of our UK recruiter clients by establishing a North American team that targets the US & Canadian market from a UK base. Most operate U.S. Eastern Time hours from their UK offices starting work at 12-noon (GMT) and finishing around 8pm (GMT).

Those that do succeed all tend to make the expansion on the back of established relationships, which they have serviced, initially from the UK, before crossing the Atlantic. This is the path I exploited in the early noughties when I successfully led Hays IT’s expansion into mainland Europe, working with clients such as EDS, Hewlett Packard, Lloyds Banking Group, BT, Compaq, BAE Systems and many more.

Precision Global Consulting

One thing several of our successful clients all have in common is they use the services of Precision Global Consulting. (PGC).

PGC is a workforce management platform. They employ a workforce on their client’s behalf and take on the legal responsibility for those workers and making sure back office processes run like clockwork by offer a number of expert solutions;

  • Payroll and Tax Management (Federal, State & municipal, Overtime payments)
  • Contractor/Worker On-boarding in all 50 US states
  • Workplace Insurance
  • Healthcare Plan (ObamaCare Compliant, Paid Sick Leave)
  • Termination Management (all compensation and unemployment claims)
  • Compliance Management (Visas, I-9s, Business Insurances)

All of which allows your typical UK recruiter to focus on finding the contractor and totally servicing their clients talent needs.

The availability of ‘WeWork’ style co-working offices both stateside and globally has seen the cost of the traditional office set-up also reduce. Often, many of the start-up tenants become clients as well.

US Opportunity

The U.S. economy is expanding and is struggling to find the skills it needs to grow. The Bureau of Labor Statistics estimates the U.S. economy will need 100,000 new IT workers a year over the next decade and currently only 60,000 are entering the workforce each year.

In addition “boomers” leaving the workforce each day mean there are 3.5m new manufacturing jobs to be filled by 2025 and currently there is likely to be a 2m shortfall of jobs filled.

At present Pfizer, Boeing and Amazon are all struggling to find qualified workers and experts say they will increasingly be forced to look overseas for high-skilled workers.

Canadian Opportunity

In Canada the situation is no different. The Association of College Communities of Canada (ACCC) reports that Canada requires 260,000 construction workers over the next eight years and the Canadian Federation of Independent businesses report that there are over 300,000 job vacancies that have been vacant for four months or more. The list of high demand jobs in Canada includes all of those in the US but also Registered Nurses, Truck Drivers, Welders, Aerospace engineers, Software and Design Engineers, Pilots and Pharmacists to name just a few.

For most UK Recruiters, global expansion is now more than a dream, it is a real opportunity that might be worth considering, especially given the challenges Brexit may bring.

To find out more call either ourselves on (0370) 8790 105 or PGC if you’d like to find out more about managing workers across the U.S. and Canada at [email protected].

Struggling, becoming desperate, close to giving up ……what is the lesson?

Struggling, becoming desperate, close to giving up

……what is the lesson?

 

Are you struggling?
Do you feel times are tough?
Did you set out on your current career, business quest with high energy, focus, enthusiasm and loads of belief and now after many weeks and months, maybe of obstacles and challenges, are feeling worn down and beaten up?

Then maybe you will allow me to tell you a story of one of my sales team who was struggling during the recession of the early 90s. For the purposes of this tale let’s call her Sophie.

Now Sophie was ambitious very talented with many skills but was struggling to generate sales and move her business forward and her life too. Though she was in her early 30s, very attractive, both personality and appearance wise, Sophie was encountering numerous challenges with men too who were unwilling to accept her as an equal and in some cases her ambition and perceived success made them uncomfortable.

To make things worse in the previous 12 months she had left the company we were both now working for but due to a takeover of her new company by our present employer she now found herself back in the same place, with the same job, at the same desk feeling very exasperated.

I too had only just joined the company and was faced with managing and helping Sophie.

You can well imagine however how frustrated Sophie was feeling, like she had nowhere to go, no one to turn to and totally like giving up.

As Sophie’s manager I sat down for a chat with her and she shared her troubles and feelings with me. I listened and reflected back to her on a practical level places where I believed she could improve her performance but I felt there was more to this. So at the time not knowing Sophie well I took a risk and shared with her a book I recently been made aware of; If life is a game, These are the Rules by Cherrie Carter-Scott.

If you are not familiar with this book then I suggest you check it out. In the book Cherrie Carter-Scott shares what she considers the 10 Rules for Being Human and it was the first four rules I shared with Sophie.

  1. You will receive a body. You may like it or hate it, but it’s yours to keep for the entire period.
  2. You will learn lessons. You are enrolled in a full-time informal school called, “life.”
  3. There are no mistakes, only lessons. Growth is a process of trial, error, and experimentation. The “failed” experiments are as much a part of the process as the experiments that ultimately “work.”
  4. Lessons are repeated until they are learned. A lesson will be presented to you in various forms until you have learned it. When you have learned it, you can go on to the next lesson.

I am delighted to say that Sophie did this and went on to be very successful with the company and eventually become a Sales Director and run her own business as well as finding a loving, caring husband who respects her and with whom she now has a lovely family.We discussed the rules but most particularly No 4. I pointed out I did not know what the lesson was that she was not learning but what I observed was that life was for some reason repeating a lesson. As her new boss I was prepared to work with her and help and support her whilst she worked through this lesson.

Since the early 90s I have met many more people who I have coached and supported, who have had similar issues with a lesson being repeated because in my experience that appears to be the nature of the universe.

In my experience if you set out with intent to achieve something the universe will support you initially but in order to achieve it you will have to undergo an element of personal growth. The bigger the vision you have, the greater the personal growth you must undergo.

So I suggest to all of you that if you feel like it is Groundhog Day. If your dream seems a long way off and you have feelings of giving up then look at yourself. Look into your dark corners and ask yourself what is the lesson I am missing.

You will be amazed that as you work through it how this will release all those other blockages in your life.

One piece of final advice is from Albert Einstein –

No problem can be solved from the same level of consciousness that created it

Good luck on your journey

Recruitment Agency Owners – Do you have an end game?

Recruitment Agency Owners – Do you have an end game?

It might seem obvious but one of the first questions we ask our clients when we start working with them is, where do they want to end up or what is their exit?

Very often the subject becomes a discussion around options open to them, which generally results in two to three choices.

  • Grow to sell in an open market sale
  • Sell to your staff MBO
  • Grow to retain but role change

Growing your business to sell in an open market

screen-shot-2016-11-16-at-11-26-45This will require you to make decisions about how you grow it, which will be different to some of the ones you might otherwise make.

When you sell your business to a would-be-buyer generally you want to maximise the value it is worth. The value you receive for your business will typically be a multiple of the EBITDA (Earnings before interest, tax, depreciation and amortization). This in turn will require you to look at many factors but profitability is probably the key one.

A quick glance at the Recruiter Hot 100 will give you an idea of the types of productivity other clients are achieving in your sector. These are the productivity levels for all employees and include non-fee earners and trainees so a figure over £100,000 per head annually is a good starting point. This year the top companies are achieving in excess of £175,000 per employees.

Another key consideration is how important are you the owner(s) to the businesses viability and profitability. If you intend to exit the business when you sell then how strong the business would be without you is key otherwise what are the purchasers getting.

There are other considerations such as:

  • Are you a niche recruiter or generalist?
  • What is your spread of clients
  • Length of key client contracts?
  • Strength of your candidate database and talent acquisition processes?
  • Which market sector are you occupying?
  • Assets and debt of your business?
  • Business mix Perm vs. Contract/Temp/Interim
  • Consultant Training and Development programmes
  • Strength of your leadership team
  • Staff turnover and tie in
  • Branding

All of these have a part to play in determining the value of your business and even then other factors such as the economic environment and markets attitude to risk will have an impact.

Typically it can take clients three to four years to get their business to a level where investors would pay serious money for your company. The world can change and the ‘multiple’ they expected for their business changes with it so this is not without risk.

Grow to sell to your staff

screen-shot-2016-11-16-at-11-23-36Many of our clients have a strong emotional connection to their business and staff and often have a preference for selling the business to key employees. This may surprise many as it does not often leverage the highest return for owners but for a whole set of emotional reasons this is preferable.

Naturally in any independent valuation all the above factors have a consideration but the strength of your leadership team is obviously key.

For clients who are considering this exit they often see a role for themselves in this newly formed business structure. This can either be as a non-exec, chairman, advisor or mentor.

Payments to the owners can be staggered and staged and are often less dependent upon external factors.

The transition is seen as gradual and less time critical and formal. Whilst this might work for the owners not all potential acquirers may be happy.

Getting the ‘old boss’ out of the way so they can make the changes without interference can be highly desirable for some management teams and also a challenge. Emotions and feelings can make this more complicated, hazardous and not always preferable.

Grow to retain but with a Role change

Finally the last group of exits are less about exiting the business but owners exiting their existing role. This usually involves people moving from a situation where they are 90% involved in the day to day transactions of the business even as a key biller to one where they have no operational requirements for securing, delivering or managing candidates, workers or clients and are working 90% ‘on the strategic management’ of their business.

Many of our clients who go for this role are seeking an ‘ambassadorial’ role where they can lead and champion the business whilst retaining a ‘strategic leadership and mentoring’ role.

Like both the previous examples the development of the senior leadership team is key but as there is no exit required it does allow key employees who are deficient in certain leadership qualities to play a key a lead role in the business and develop their leadership skills and qualities overtime.

In many cases this is often never the ultimate destination but on the journey to either of the two outcomes already discussed. This however can take many more years to achieve and therefore worthy of consideration.

Your business exit

screen-shot-2016-11-16-at-11-29-43Your business will be individual, your market, clients, circumstances and staff will all be unique and what works for some may not work for you. It is why when we meet customers this is an interactive discussion and a key consideration.

Often we start with a ‘Grow to retain’ objective that shifts and changes as the process of evolving the business progresses.

Whether you contact the Recruitment Training Group for guidance and support or another business coach we would encourage you to seek support.

The final consideration for you is how the ‘coach/advisor’ is being remunerated. If the coach becomes an ‘investor’ in return for their advise, then maximisation of their return will be a key consideration for them. They will naturally have a preference for a sale in the open market, which as long as your aspirations are aligned will not be an issue. This will work well for you, as it will ensure you receive the maximum return too.

A coach however should be working with you to help you make the right decision for you and on developing you as a person they should not be ‘telling’ you what to do but guiding and supporting you in making the decisions you encounter. You should expect some work with you on developing your personal skills as well as highlighting and working on any ‘limiting beliefs’ you may have that are inhibiting your personal development and that of the business.

If a confidential discussion would be beneficial then feel free to contact us.

Millennial Recruiters need flexibility with boundaries and consequences

One of the most popular topics we come across today in our discussions with Recruitment Business Owners when we are creating their high growth strategies is the concept of output-focused working or Results Only Working Environments.

The ROWE ™ concept was developed by Cali Ressler and Jody Thompson, founders of the consulting firm CultureRx. They published the approach in their 2008 book, “Why Work Sucks and How to Fix it.

In a ROWE ™ recruitment agency environment, you measure consultants by their performance, results or output, not by their presence and hours in the office or the hours they put in after work. In a truly ROWE ™ business you give them complete autonomy over their projects, and you allow them the freedom to choose when and how they will meet their objectives and goals.

WOW – and yes this stuff scares the sh*t out of most business owners especially the Baby-boomers and Generation-X business leaders and managers who have spent the last 10-20 years in our industry. In many cases it challenges their whole philosophy, their fundamental beliefs and values about work.

So why do it?

The answer is your new hires are typically drawn from the age group born between 1980 and 1994 who are termed Generation-Y or Millennials (as they entered the workplace after the millennium). Their attitude and approach to work is different and as such they are changing the workplace globally.

Ressler and Thompson would also argue that:

  • You will attract and retain the best talent
  • Drive greater accountability at all levels within the organisation
  • Evolve managers into coaches who hold people accountable to measurable results.
  • Catalyse innovation in process by removing senseless workplace barriers.
  • Operate in the leanest manner possible by reducing wasteful practices in time and materials.
  • Drive competence in all roles.

It is our experience that all of these are possible but you will also:

  • Increase discretionary labour
  • Liberate your teams latent passion and desire for success
  • Empower your staff to grow themselves and your business
  • Secure wider family buy-in from (spouses and children)
  • Reward optimisation of working practices
  • Reduce sickness and absenteeism

Is this all possible? Well actually yes it is and it is the “Future-of-Work”. Regrettably for those businesses that don’t embrace this way of working you will be deemed out-dated and not attractive to the Millennial Generation. You will struggle to attract and retain the most accomplished staff and skilled professionals.

Some companies are already seeing this.

There has been a huge amount written about Gen-Y and Millennials mainly from the US but in 2016 we passed a significant milestone on the UK Workplace in that Millennials took over from Baby-boomers as the largest generation represented in the UK workforce. This is now true in most developed nations. Although are still the largest proportion of the population many of them have retired in the past few years.

Taken from Guardian 07/03/16

This is changing the UK workplace as businesses increasingly come under pressure from Millennials to change their working practices.

According to accepted research Millennial Generation typically seek many things:

  • Meaningful Work
  • Fun at Work
  • Collaborative Working
  • Freedom of Choice/Expression
  • Flexible Working

They tend to place a greater value on the work-life balance than Gen-X and Baby-boomers. They shy away from ‘command and control’ and traditional authoritarian leadership styles. Small intimate, collaborative working environments where they can make a difference, is what attracts them. There’s a lot here, which, Hertzberg would recognise:

  • Personal recognition
  • Achievement
  • Recognition
  • Responsibility

So it is not all new or revolutionary.

ROWE ™ Recruitment Agency environment

So how do you create an Output focused or “Results Orientated Working Environment”, which recruiters and agency leaders and owners are happy with?

It is simple by defining the key daily activity targets consultants are expected to achieve. A lot of this will depend upon your agency operating model either as a niche recruiter model or generalist one but either way you need to define the daily activities your consultants must to achieve. Typically these will include:

  • Outbound candidate calls
  • Outbound hiring manager calls
  • New Candidates found
  • New Sales leads secured
  • Job Board Searching
  • CVs Spec’d in to clients
  • Market research
  • Social Media Sourcing and LinkedIn Activity

In many of our clients who are achieving high growth their consultants who flex-on and off are achieving their daily activity targets within their hours plus their sales targets are either being exceeded or met on a consistent basis.

As one MD said to me recently “if our guys are over target and exceeding their daily activity targets then I have no issue in them leaving at lunch time one day a week to go to the Christmas Markets or Surfing in Newquay or mountain biking in Snowdonia.”

“It is amazing too! When everyone’s finishing early on a Friday because they are delivering the required results it’s a pretty big incentive for the weaker performers to hit their sales and activity targets to leave early too.”

“Families can leave for Centerparcs, Mums and Dads can see children’s football matches, ballet performances and come in late when their daughter/son has a ‘special assembly’. Everyone wins the company, staff and their families”

“They all have work phones so can still be contactable if they are needed.”

Some clients have to work skeleton cover for workers/contractors on paydays but it is all possible.

Agree Boundaries and Consequences

For this to work as managers, leaders and owners you have to be clear on several things?

    1. Activity Targets
    2. Sales Targets
    3. Consistency
    4. Exceeding targets is consultants responsibility not yours
    5. Agreed consequences of missing targets

Many consultants are like teenage children, after all many of them were teenagers until recently. They will challenge the boundaries and seek ‘special dispensations’. It’s a dangerous road to go down both morally and legally. You must treat all staff equally and be consistent. Failure to do so could result in an employment tribunal if it goes wrong.

One of the easiest ways to achieve this is to adopt the principle that you have agreed the conditions under which your teams can flex-on and off but it is not your responsibilityto make sure consultants exceed the required targets. It is theirs.

Finally as long as these conditions are agreed up front then you should not feel guilty if a consultant is left alone in the office whilst everyone is down the pub on a Friday afternoon. My experience is that next time they will make sure they are the right side of the line.

The by-product of adopting this regime is you will attract people that want success. They will invest the hours and effort they need to do to accomplish their activities in the week. Working on personal development, which improves performance becomes a WIN/WIN. Peer-pressure is a key tool in a managers toolkit and your consultants will want to be seen to be in that ‘winners enclosure’.

So if people want to spend 30 mins at the coffee machine talking about last nights Eastenders or Champions League game they can but they cant really complain if they miss their activity targets and end up staying behind. Thats the consequence of their actions.

Over time good consultants will optimise their ways of working.

Some will make calls in an evening as candidates tend to talk more freely away from work. You may find some spouses are also more flexible supporting working Mums and Dads at bath-time if it means the family can leave for their weekend trip early on Friday.

You will find staff investing greater personal time if they get even greater flexibility. “Flexi-ing” a whole day off for being 125+% over target for the quarter. In this case you might see people committing larger proportions of their personal time in the week to make targets.

When you achieve this you will start to see high performance become embedded in your culture. Gen-X and Baby-Boomer recruiters did this in 80s, 90s and 00s for different drivers, promotion, recognition, financial rewards, etc. Millennials can be motivated to exhibit the same behaviours they just have different drivers.

Tapping into that and harnessing it to drive your overall business performance and achieve high growth is the Art of Leadership, which as they say is our job as leaders.

Meeting the Challenges of an ROWE Workplace

Establishing an Output focused Working or ROWE ™ workplace can be a minefield and there are challenges in regulatory controlled working environments like Education, Healthcare and Social Care but all of these can be overcome with the right structure and controls. You might need some external support from Growth Coaches, like those of us at Recruitment Training Group but there are others, who have been through the process.

So don’t delay talk to your Millennial Workers and start to discuss an Output Focused or ROWE ™ Recruitment Agency Working Environment.

The benefits to your business and profitability can be huge. Call us if you want to learn more or for an informal discussion.