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TAKING THE FIRST STEPS STARTING UP YOUR OWN RECRUITMENT BUSINESS 2019
SPONSORED BY:
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What does success mean to you? Success to you may be about wealth, being your own boss or about spending more time with your family. Since 2003, SSG has been working with motivated recruiters, like you, to deliver their vision of success by helping them start, run and grow their own business. ;I SǺIV E JVII FYWMRIWW PEYRGL JSPPS[IH F] SYXWXERHMRK 5VSJIWWMSREP YTTSVX )IHMGEXIH QEVOIX PIEHMRK 5E]VSPP ERH &GGSYRXW SPYXMSRW CRM ERH /SF 'SEVH &HZIVXMWMRK 8EMPSVIH .8 IVZMGIW [MXL FIWTSOI (VIEXMZI ERH 2EVOIXMRK 7IWSYVGIW 1IKEP ERH (SQTPMERGI EHZMGI (SQTVILIRWMZI 'YWMRIWW (SRWYPXERG] WS ]SY GER JSGYW SR [LEX ]SY HS FIWX 7IGVYMXQIRX
Whatever success means to you, download our free business plan www.wearessg.com/recruiter 01442 937 774 hello@wearessg.com www.wearessg.com
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TAKING THE FIRST STEPS STARTING UP YOUR OWN RECRUITMENT BUSINESS
CONTENTS S P O N S O R’S STAT E M E N T We are delighted to start our association with Recruiter and sponsor our first Start-up Supplement. We’ve been backing recruiters for over 16 years and we are proud to have launched over 350 recruitment businesses. The motivations for our recruiters vary from lifestyle choices such as hobbies and family time, to those building an empire for sale in the future. We help overcome the barriers for entry to market including: the cost of technology; advertising; marketing; legal advice; payroll; and the financial management of your business, which is under constant legislative change. In addition we can help with income in those crucial first few months. Outsourcing their non-core business activities allows our clients to focus on developing the all important client and candidate relationships. The first six months are crucial and a fast start normally gives you choices later down the line – there’s no time for dawdling or procrastinating, as there’s rich pickings in the market. Going niche is proving the most successful route and if you can keep that discipline, success is never too far away. So if the time is right for you, then the time is now. Good luck…!
Richard Bruce Managing director, We Are SSG
EDITOR’S COMMENT Where do you fancy working – in an urban centre, a suburb, a posh neighbourhood or hipsterville? If you’ve been dreaming of a start-up, you no longer have to take the ‘bedroom’ or ‘kitchen table’ option – only if you really want to. There’s space available in any number of neighbourhoods, in a variety of price ranges, near you or as far away as you’d like to be as the co-working and co-locating vibe strengthens its hold on today’s business culture. Learn about the flexible working way forward in our feature from p5 and from our advertiser The Clubhouse on the outside back cover of this supplement. The expression ‘critical hire’ certainly applies to the first one, two or three people you bring into your start-up business. These people, probably more than any others, must be able to embrace your vision for your new business and progress the idea through the early stages to success. From p13, glean insight from the experts about the best ways to get the best first hires – for you and your business. I hope you find this collection of insight and information useful. All the best with your new enterprise!
05 Moving on up Recruiters who are starting out on their own are shunning the backroom at home or rented office and choosing the flexibility of a managed office space
10 Start out with SSG We meet two recruitment owners who have chosen supplement sponsor SSG to help them on their startup journey and beyond
13 Start up as you mean to go on Getting the first hire right is key to the success of a new recruitment business but often it’s what most startup firms get wrong
DeeDee Doke Editor, Recruiter/recruiter.co.uk
EDITORIAL +44 (0)20 7880 7606: Editor DeeDee Doke deedee.doke@recruiter.co.uk Contributing writer Colin Cottell Production editor Vanessa Townsend vanessa.townsend@recruiter.co.uk Art editor Sarah Auld Picture editor Akin Falope ADVERTISING +44 (0)20 7880 6213: Sales manager Paul Barron paul.barron@redactive.co.uk Senior sales executive Joanna Holmes joanna.holmes@redactive.co.uk Recruitment sales recruiterjobs@redactive.co.uk +44 (0)20 7880 6215 PRODUCTION +44 (0)20 7880 6209: Senior production executive Rachel Young rachel.young@redactive.co.uk PUBLISHING +44 (0)20 7880 8547: Publishing director Aaron Nicholls aaron.nicholls@redactive.co.uk
Redactive Publishing Ltd 78 Chamber Street, London E1 8BL 020 7880 6200
CIRCULATION and SUBSCRIPTIONS: Recruiter is the leading magazine for recruitment and resourcing professionals. To ensure each issue of Recruiter magazine is delivered to your desk or door, subscribe now at https://subs.recruiter.co.uk/subscribe. Annual subscription rate for 12 issues: £35 UK; £45 Europe and £50 Rest of the world • Recruiter is also available to people who meet our terms of control: http://bit.ly/RecruiterCC • To purchase reprints or multiple copies, or any other enquiries, please contact subs@recruiter.co.uk or +44 (0)1580 883844 © 2019 Redactive Media Group. All rights reserved. ISSN 1475-7478
Total average net circulation between 1 July 2017 & 30 June 2018 – is also 14,837. sent to all REC members
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TAKING THE FIRST STE PS: STARTING UP YOUR OWN RECRUITMENT BUSINESS
MOVING ON UP FOR RECRUITMENT START-UPS, finding suitable office space can be a bit of a bind. Negotiating with landlords, signing rental agreements, paying for maintenance and other overheads are just some of the hassles that an early-stage recruitment company can do without. Purchasing your own building is a potential option, but few start-ups have that sort of spare capital lying around. And if and when business begins to roll in, the last thing you need is the disruption of finding new premises and relocating staff. For an increasing number of recruitment start-up owners, these are no longer the type of concerns that keep then awake at night. Instead of renting or buying a certain amount of office space in the traditional way, many are choosing flexible office spaces, provided by companies such as WeWork, The Office Group, IWG (formerly Regus) and Pure Offices.
Rather than a back bedroom or renting long-term offices, many start-ups are opting for the flexibility of a managed office space. Colin Cottell investigates FLEXIBLE GROWTH
Above: As well as main offices near Bristol, Harvard Services also uses IWG offices in both Cardiff and London for meetings
Richard Morris, CEO of IWG UK, says: “Start-up recruitment companies increasingly recognise the strategic and financial benefits that flexible work spaces can offer – in particular, allowing them to scale up and down, something that is essential for them.” Gavin Tew, co-founder of technology recruiter Source Technology, which moved into a WeWork shared office space on the day the company opened for business in 2015, agrees. “We started off with a two-man, four-man, six-man, 10-man and then 20-man office as
the business grew, so it worked very well for us. In the first year and a half, we probably moved every three months within the same building, so it offered us great flexibility. It served us amazingly well.” So much so that when the company expanded into the US, it opened in WeWork offices in Los Angeles, New York and Houston. John Matthews, co-founder of professional services recruiter Harvard Services, whose main office is a Pure Offices shared office space in Portishead near Bristol, agrees that the flexibility of managed office space is a massive benefit for WWW.RECRUITER.CO.UK 5
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recruitment start-ups. “In the three years that we have been here, we have had five different offices inside the complex, which means that on a month-by-month rolling contract I can flex the size of the office,” he say, adding: “The rates are pretty decent.” Matthews says he also has IWG offices in both Cardiff and London, which he uses when he has meetings in those cities. He says he has looked into the company buying a property or renting its own private premises, but he says, “neither offered us the flexibility alongside our business plan to do what we wanted to do, so we have ended up staying in the service offices”. Working out of WeWork offices in Los Angeles in West Hollywood and recently opened New York, as well as The Office Group premises in London, Gary Tiller, co-owner and COO of global technology recruiter Intelletec is a strong advocate of flexible work spaces for recruitment start-ups. “It’s been a flexible way for us to grow and to open up in different locations, and allows us to quickly penetrate the market, which is quite exciting.” And having signed up for 12 months, although they can break after just six, he says it’s nice not to be tied into long-term financial commitments. “We recently opened in New York, and we got into the office within a couple of weeks. It creates fewer barriers for us, it doesn’t involve six months’ rent up front and £50k commitment. Even when you are in 6 RECRUITER
“It’s been a flexible way for us to grow and to open up in different locations, and allows us to quickly penetrate the market, which is exciting” situations where you could afford to do that it’s nice to be in a position where you don’t have to. It’s better to have this cash for growth rather than have it stuck [tied-up in a building].”
CENTRAL BENEFITS Tew says another attractive aspect for recruitment start-ups is centralised services, such as desks and phones, while Matthews likes the fact that a manned reception is provided. “I wouldn’t want to pay for a receptionist, not the size we are yet.” Harvard Services currently has five staff. IWG’s Morris says there are other benefits too. “During the early stages of a business, introductions to new clients or contacts can be a vital but time-consuming prospect. Flexible work spaces remove this burden, allowing businesses to network in the comfort of their own work space acting as a prime location for external meetings. As a networking resource, the benefits of co-working spaces are endless.” Increased productivity of workers is also a benefit, says Morris, with 82% of business
Above: Source Group’s WeWork offices in Los Angeles, West Hollywood
82%
of business leaders who responded to IWG’s Global Business Survey, agreed that the ability to work flexibly has improved staff productivity
leaders who responded to IWG’s Global Business Survey, agreeing that the ability to work flexibly has improved staff productivity. By way of example, Morris says that giving staff the opportunity to work in flexible work spaces, close to their home, can help them avoid train delays and “the stressful commute”. Tew says that although the offices it shared with other businesses in Moorgate were open plan there were options for businesses to create their private space. He says his company used this for candidate and client meeting, alongside on-site meeting rooms and board
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rooms, and space for events. “It was very effective and I am sure it created a good impression of the business,” says Tew, adding: “It’s quite common in the market these day so it’s not an unusual environment.”
The Harvard Group’s Pure Offices space in Portishead, Bristol
BUSINESS OPPORTUNITIES Over and above this, Tew says the shared offices and the collaborative environment with different people in various stages of their growth as a business provided “a good environment that people wanted to work in and enabled us to attract talent … Beyond our business model and their buy-in to us, I think it was a significant reason for staff joining us because these days people do want to work in a world-class decent environment”. Tiller agrees. “The people that work with us don’t want to be isolated; they enjoy the collaborative working environment that is not too stuffy and too corporate.” “We could have done the typical back bedroom or the clunky little office somewhere, but what we wanted was that collaborative environment and the collegiate feel of any decent managed service office,” says Matthews. “I like the energy.” Tiller says that as long as you are careful about where you take space, being in a shared office space can also bring business opportunities. “Where we are in the main space allows you to integrate and provides you with quite a lot of opportunities within the building because there are a lot of similar businesses and growing businesses in the same space as you. There 8 RECRUITER
is great networking, rather than just having yourself shut off from the world.” Tew says that being in a shared office led to the company getting business from other businesses in the building: “Not big amounts at the stage when we were starting, [but] it made a big difference.” Matthews concurs. “Everybody is eager and keen, and actually we all take advantage of each other’s business needs.” Three years after moving in to Pure Offices’ managed service office complex in Portishead, Matthews remains sold on the idea. “I could moan about silly things like parking, but no I haven’t seen any downsides. I think it is a nice option for a start-up and especially for a recruitment start-up. It makes it easy. Really easy.” ●
Advice ➊ For the greatest flexibility choose a one-month rolling contract
➋ Give yourself six months to see if it’s right for you ➌ If you do go for a longer contract look to negotiate a discount
➍ If you make a lot of confidential calls, make sure there is somewhere you can make them without being overheard
➎ If you like to be able to open windows and
control the heating in your office, check if this is going to be possible
➏ Before signing on the dotted line, get feedback
from other start-ups who have used the company providing the office space
SEPTEMBER 2019
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YOU SEARCH & SELECT YOU search & select, a recruitment consultancy working exclusively with the live event, experiential and integrated communications sector, is led by Robert Kenward. “I didn’t start this business to be a millionaire,” he explained. “I don’t want to have staff. I want to do it for the next 15/20 years, maybe pass it on to my son, but the whole way through is doing things around my family and my life.” Owning his own business has helped Kenward realise that he didn’t have to work 8am-8pm any more. “You know that
START OUT WITH SSG’S HELP SSG, experts in launching and supporting recruitment ventures, has been helping motivated recruiters set up their own businesses since 2003. Vanessa Townsend investigates From launching a new venture, covering everything from the dull but necessary legal & compliance issues, all the way through to the exciting creative and branding, SSG provides all the recruitment tools a start-up needs. Its team can handle the Tax Man, the VAT Man and even the emotional
STARTUP 10 RECRUITER
RESEARCH
Bogeyman – it’s all part of the service! And once the new business is on its way, SSG’s team of experts provides on-going support to the new enterprise – covering all aspects of recruitment, back office management and business mentoring. Hear from two recruiters who decided to go it alone – with SSG’s support.
FIRST MEETING
LAUNCH DAY
TO RESOURCING Tess Orchard’s main reason for setting up accountancy & finance specialist recruiter TO Resourcing was to run something that was organic and allowed her to make business decisions. “There’s a flexibility in working for yourself, which allows you to work around your other personal
ACCOUNTS
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SEPTEMBER 2019
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wearessg.com/recruiter ‘work smarter, not harder’ saying? I found I didn’t need to work on a Monday. I log on toward the end of the day, to get a head start for Tuesday, but the rest of the day is spent with my son, such as canoeing together. “The sector I specialise in is very creative. As such the people I work with have more exciting things to do than speak to a recruiter, so most Friday afternoons the family and I spend time together.” Doesn’t he worry that he’ll miss out on business? “I’ve built my reputation to work with clients I want to work with, and I’m able to focus on roles which fit my expertise. I’ve built my own reputation and the brand, so I’m now at a point where, because I’m working on a retained basis, I know where future business is coming from.” So what would Kenward’s advice be to someone wanting to start their own
commitments, providing you with much more valuable family time,” she adds. The thing that held her back starting her own business was that she had no idea how to begin: “I didn’t know how to run a business. I know how to recruit, but I didn’t know where to start when it came to accounts, payroll, technical matters or anything else.” Having gone to SSG for support in setting up her business four years ago, TO Resourcing renewed its service agreement with SSG for three more years in June this year. “In March this year we moved into our first office. It has a lovely courtyard, which on a sunny day is perfect. Over the coming months and years we’d like to gradually add more staff, to cover our administration and resourcing requirements, and eventually looking
IST PLACEMENT
EARNING PREVIOUS SALARY
recruitment business?: “You’ve got to be able to stand in a room with other recruiters and have a good answer to the question, ‘What do you do differently from everyone else?’. If you can’t say something other than ‘I really understand my sector’ or ‘I get to know my clients really well’, then you have to start thinking if you really have what it takes to be successful.” He admits that he had fears about starting his own business: “What if I start my own business, and it fails? What if I’ve completely misread the landscape, and that the services I want to offer aren’t in sufficient demand to bring in the business I need? “I’ve been running YOU search & select for three years now, and every time I explain what my business offers and the way we work, potential clients have bitten my hand off to work with me.” The Fitability guarantee [which involves a rebate within
to bring in another consultant.” Orchard explains: “At TO Resourcing, we want to stay small and personable – to continue holding the virtues which have made our business so successful for the last four years. We want to maintain the work/life balance we’ve managed to find, and continue to grow slowly and organically without compromising any of our company values.” She said the most rewarding part of running her own business with SSG’s support has been the ability to focus on maintaining client relationships, without the pressure of having to be doing something else or working on the next deal: “There’s certainly an element to which I’m able to be true to myself. I don’t need to be corporate or anything other than who and what I am. There’s a sense of fulfilment in being
SERVICED OFFICE
1ST EMPLOYEE
six months if the candidate fails to fit in with the company] is also a great angle. “I haven’t reinvented recruitment, I’ve just simplified it, and focused on doing an exceptional job,” he explains.
able to provide your service, your way.” As a result of serving her clients in the best possible way, and providing them with the best candidates on offer, TO Resourcing reaps the benefit of referral business. “Our clients love recommending our services to other businesses, which makes our life so much easier!” she says proudly. Orchard says TO Resourcing stands out from the competition because of the “real people with real personalities” working under the TO Resourcing brand. “We are people who work to understand our clients’ businesses. We get to know their business inside out: the things they celebrate, and their challenges. “There isn’t any more care and attention we could apply to our work, and our clients know this when they choose to work with us.”
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TAKING THE FIRST STE PS: STARTING UP YOUR OWN RECRUITMENT BUSINESS
START UP AS YOU MEAN TO GO ON Getting the first hire right is key to a new recruitment business but is often the step most start-ups get wrong. Colin Cottell discovers why ‘PEOPLE ARE OUR GREATEST ASSET’ IS ONE of the business world’s most over-used clichés, but in recruitment there is more than an element of truth to it. And never more so than when a new recruitment company is starting up and taking its first few shaky steps in a notoriously competitive industry. Recruiters pride themselves on their
ability to find staff for their clients, but according to Ryan Cleland-Bogle, founder and CEO of Tempting Ventures, which invests in early stage recruitment businesses, and founder of a number of recruitment companies including financial markets recruiter Carrington Fox, the reason why many fledgling recruiters fail is because they
don’t get those first few hires right. “When you have a 50-person business and someone comes in and it doesn’t work out, that affects 2% of your output. But if you are a two-person business and one person doesn’t work out, that affects 50% of your business,” says Cleland-Bogle. But the consequences of a bad hire at this early WWW.RECRUITER.CO.UK 13
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TAKING THE FIRST STE PS: STARTING UP YOUR OWN RECRUITMENT BUSINESS
stage in the life of a recruitment company don’t end there, he warns. “If it takes two or three months to find someone else, suddenly you have lost half your year.” Then there is the financial cost if a recruitment start-up gets it wrong, warns Julie O’Neill, joint MD at rec-to-rec firm McCall. “First hires are key because initially the biggest cost is for staff. Get it wrong and it’s money down the drain,” says O’Neill. “It can be a few months before the invoices hit [and you get paid] so it is essential everyone on board is fully productive to hit budget speedily and to keep in line with both your own and investors’ expectations. Knowledgeable billers are key at this point to maximise every billing opportunity.” Cleland-Bogle says it is important to acknowledge that the role of a consultant in a recruitment start-up is not the same as that in a larger staffing company. “No one is calling you, it is always outbound, so the job that you are asking people to do is different,” he says. “Where early-stage recruitment companies get it right is when they acknowledge that from the start, and measure someone in the hiring process against whether they will be able to do to that. Because frankly, with a start-up it’s just a lot harder.”
KNOW YOUR DNA Charmaine Vincent, CEO and founder of public sector and third sector recruiter Baltimore Consulting Group, advises founders of recruitment start-ups to “know your vision, know your core values, know your DNA as a business and live them”. This will help you create the right interview questions to measure prospective staff against, she says. “If you employ those that possess the skill set you need and they tick the boxes needed to give you adequate reassurance that they will fit into your culture and work hard, the rest can be coached.” Tony Goodwin, founder and chairman of international executive recruiter Antal, says there are particular challenges for companies launching staffing businesses overseas. “You need 14 RECRUITER
of being able to recruit them all at the same time, it was vital that the staff that were hired were able to bring contacts with them when they joined him in the new business. “If you are going to hire people you don’t know, make sure you reference check them properly, and with clients rather than with their employer,” Atkinson advises.
GO FOR EXPERIENCE?
“I actually think that hiring people for culture and intelligence, mental ability and values is more important in a start-up” two types of people,” says Goodwin. “You need the people who are going to go out there and win the business, but you also need the set-up skills, which normally don’t come with the same person. With our experience setting up so many different offices in so many places, I would go for two people.” While it may be tempting to hire people you have worked with before, Bogle-Cleland says this may not always be the best option. “Quite often people will hire people because they have worked with them in a larger recruiter, but then won’t give them that same structure such as KPI and targets in the start-up.” Paul Atkinson, the founder of three recruitment businesses, as well as backing a couple of brands within Taranata Group, which was established in 2017, is a firm advocate of hiring “known quantities” – people he has worked with before or knows about on account of their reputation. Although he says that hiring trainees is cheaper, “you want the first few people to create the impression you would personally want to create”. He says that even though he has always had a lot of great client contacts, because he didn’t have the time and the personal bandwidth
Goodwin says the first person hired should have knowledge and experience “of your company, your culture and your ways of doing business more than anything else”, but that the second person “doesn’t have to have this experience, but then needs to be trained by the first person”. Goodwin also warns against hiring too many expats in a foreign country, but says that hiring Westerners who already live in the country has worked well in China, Russia and India. Bogle-Cleland warns there are risks in selecting staff for a start-up based on market knowledge and experience. “What I see with a lot of start-ups is that because they have hired someone with knowledge and experience they think, ‘Job done, we just need to get them to join us and they will make money’.” However, in his view this is a mistake. “I actually think that hiring people for culture and intelligence and mental ability and values is more important in a start-up because you can give people knowledge and train them.” Another common mistake that early-stage recruiters make when hiring their first few staff is to opportunistically hire recruiters they think can make them money, he adds. “Instead of staying tied to one market and hiring for that, they hire what they think is a good person and then choose a market based on that person; the effect is that suddenly you have created two recruitment businesses and not one.” He says this is something he himself has done and has seen others do countless times. To coin another cliché, recruitment isn’t rocket science, but doing it right will certainly help a recruitment company lift off successfully. ●
SEPTEMBER 2019
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