The Scaling Recruiting Firm
What does it mean to scale your recruiting firm? Most owners and leaders of recruitment firms mistakenly believe that scaling is primarily a matter of adding more recruiters.
Scaling is about increasing your firm’s productivity, revenue, and profitability without working more.
For example, you continuously fill more job orders while working fewer hours. Even owners who wish to remain solopreneurs and not hire other recruiters want this outcome. Unfortunately, 95-97% of recruiting firms fail to scale meaningfully despite multiple attempts.
If how to scale a recruiting firm is not just about adding more recruiters, then what is it about? It’s about three things: Processes, technology, and people in that order.
In fact, “The Scaling Equation” is:
Let’s delve into each element of the Scaling Equation:
“The Right” Processes.
A process is simply the way you accomplish a task. When recruitment industry best practices are tailored to your firm's needs, they become “The Right Processes for you. You currently have a process for everything you do regardless of your level of consistency.
For example, if you’re inconsistent when executing job order intake calls, your process may be to let each situation dictate your approach. If you don’t have a formal process for a task, your process is unstructured (e.g., allow people to do things “their way”).
It's important to realize that you cannot “have no process” for a task. The questions are:
- Is the process structured (formal step-by-step approach) or unstructured?
- How effective is the process?
- If the process is structured, how do you ensure compliance?
Why is this important? Because it’s impossible to scale if most of your critical processes are unstructured. You may allow some individuality in how people execute the processes, but the outcomes of each process should be consistent to facilitate scaling.
If you’re a successful owner/producer with unstructured processes, you’ve probably developed instincts and judgments that make you successful. However, instincts and judgments are not transferable and scalable.
You won’t scale without structured processes!
Creating quality, structured processes is the first step in how to scale a recruiting business for the following reasons:
Dysfunctional processes are like friction in a mechanical system. They cause it to slow down, create wear and tear, and lead to breakdowns. Poor processes have the same impact on human systems. I’ve seen firms increase revenue 100-300% within a year by fixing poor processes!
Trying to scale by increasing headcount while utilizing poor processes is unlikely to work because:
- New people will learn your existing insufficient processes. If you try to improve processes later, you must overcome their resistance to change.
- As you increase the number of people utilizing subpar processes, you multiply your firm's overall level of dysfunction. This makes scaling a recruiting firm next to impossible.
- Poor processes reduce people’s productivity and revenue while increasing their effort and frustration. That’s is a great way to lose the people you want to keep.
“The Right” Technology.
Our competitive world punishes manual processes and rewards automated processes. The purpose of technology is to make your processes work with more speed and efficiency. Technology replaces time-consuming, repetitive tasks that people would otherwise do. This frees them to focus on tasks that require thought and judgment.
The right technology, used correctly, greatly increases your ROI while enhancing your team’s performance and job satisfaction. The below considerations must be addressed to harness the potential of technology to improve your results:
- Technology does not fix dysfunctional processes. For example, let’s say you use technology to create a prospect list. If you use a list that’s focused on the wrong prospects, you’re worse off than if you never created it.
- Technology can quickly become obsolete. If you stay with inferior technology because you’re comfortable with it, you’re giving your competitors an edge.
- It’s important to have a wise process to select and implement technology. If you quickly jump to new technology before evaluating the available options and how to use and implement them, you can create a nightmare for yourself.
“The Right” People.
Recruiting firm owners and leaders know firsthand the importance of having the right people. However, placing candidates with clients has nothing to do with hiring the right candidates for your internal openings.
My experience as a recruiting coach and advisor is that 3 out of 4 recruiting firm hires don’t work out as hoped! It’s difficult to scale with these odds. What has been your success rate in hiring internal staff?
You must execute the following to get the people-side of scaling right:
- Alignment of “innate characteristics” with the position. This is people’s “wired in preferences” (where they naturally want to put their attention and energy). Examples include the desire to connect and communicate with others and detail orientation.
- Alignment of “character and values” with the position. Character and values are major drivers of people’s behavior. They show up most when things are difficult. When things are easy, most people do fine. When your culture aligns well with a person’s character & values, you’ll have a good culture fit. A person who is a high producer but a poor culture fit will almost always bring more negatives than positives. Examples of character and values include work ethic, honesty, grit, and resilience.
- One more hiring mistake most firms make. Most firms place excessive value on prior recruiting industry skills & experience when hiring. However, skills & experience can be learned and applied quickly if innate characteristics, character, and values align. However, if they don’t align, skills & experience won’t produce sustainable success! In fact, the firms that scale effectively tend to hire people with little or no prior recruiting industry experience.
Effective training, leadership, and management.
Hiring is only one part of building a team of the right people. The work begins after people start at your firm! You must provide proper training, leadership, and management for new hires to reach their potential and stay with your firm.
Let’s consider each of these factors:
- Training. Most recruiting firms provide training that’s poorly planned and unstructured. As a result, the owners waste a lot of time that could have been saved with a well-planned, structured training program.If your recruiter training isn’t up to par, the revenue and retention of your recruiters won’t be either.
- Leadership and management are two very different things. However, each of them is essential to your firm’s success. Leadership refers to two basic things: 1) setting a vision and direction for your firm. 2) Engaging people to want to join and remain in the journey. Management relates to the processes and technologies required to achieve your vision and direction. It encompasses what people will do and how they’ll do it.
Most recruiting firms underestimate how critical leadership and management are to their results. In addition, due to subpar role models, most people have learned ineffective strategies and tactics. Few people are good in both leadership and management. All it takes is a significant deficiency in either to offset your ability to scale. The good is that these are skills you can learn and apply to make an enormous impact on your results. How would addressing your leadership and management impact your success?