Running a great recruitment business is difficult. The competition, the compliance, the cash flow issues and most of all, the people complexity creates an ideal environment to screw up.
Here are 10 of my biggest blunders, some of which I have made several times. I offer them up as a guide on what NOT to do when running a recruitment company.
- Focusing too heavily on consultant activity levels. Slavishly counting activities, measuring ratios, chastising shortfalls… at the expense of ensuring the quality of those activities was high and consistent. Lots of activity, done badly, will actually send your business backwards, and focusing on activity for activity sake can be tremendously demoralising for the team, and distracting for the leadership.
- Focusing too little on activity levels of consultants. This is the flip side of the same coin and it’s just as big a blunder. Allowing consultants to “free wheel” appearing busy by doing lots of ‘stuff’ without ensuring clarity and focus about what their key activities must be. Letting consultants spend 90 minutes in an interview with a junior person because “they want to get it right” and agonising for hours over the wording on a resume are great examples. Quality is important, but you also have to churn through a lot of the key actions that drive making the match. It’s a management task to keep that on track.
- Allowing consultants full autonomy over which clients and which jobs they choose to work on was a mistake. Most recruiters are somewhat “tarty” by inclination, trying to work with everyone on everything. Specialisation is key, working with clients who will partner with us is key, gaining exclusivity and working on fully qualified briefs is fundamental, as is working with people who pay our bills. Not prioritising our WIP has cost me plenty, time and time again.
- Hiring potential consultants because they had a great academic background and fantastic careers in a previous job, which was not recruitment, but in a field we specialise in. I have learned that when hiring recruiters we need to focus more on intrinsic attributes that drive success in recruitment, such as competitiveness, empathy, resilience, listening skills, passion, integrity and work ethic.
- Opening offices in remote places without strong, committed, proven, loyal local management. Everything depends on leadership and it gets more crucial with every kilometre the remote business is away from HQ.
- Retaining mediocre people (who may be very nice people) in the hope they will miraculously become superstars despite mounting evidence that they will always be underperformers. This is a massive opportunity cost and I make this mistake even now.
- Hiring managers and recruiters on massive base salaries on the back of “impressive” track records (which are often not what they seem) or promises of huge performance. I learned that you must always link high earning with high performance. The big money comes after the big delivery, not before.
- Allowing managers of smallish teams (2 – 8 people) to evolve into non-billing managers. This is a massive mistake. We need “player/managers,” people who bill, rain-make, business develop and also manage the team. I have allowed managers to become backroom crunchers of numbers and process managers, and that’s not where the value of a leader lies, nor can you secure any leverage out of that kind of role.
- Assuming that a good recruiter will make a good manager. They are entirely different skill sets. Promoting your highest billing recruiter to Team Leader because she wants a “career” can destroy her progress, dismantle her billings, and disintegrate the team.
- Listing my own company Recruitment Solutions in 1998. It was too small a business really to be floated. Profit of only $4M. The IPO was a financial success, but it was not the right thing for the business. It cost a lot to be listed, we lost control to non-executive directors and you have to answer to shareholders and fund managers. Watching share price means you spend less time on the important things like customers and staff. I am immensity proud of Recruitment Solutions. It was stand out business and produced literally scores of people who now own their own successful business. But we should not have gone public.
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- Posted by Greg Savage
- On December 14, 2010
- 32 Comments