Our industry has experienced a remarkable turnaround. My recruiting firm owner clients and other recruiters across the country are experiencing a surge in openings and regular deposits to their bank accounts again…. And, unfortunately, many are already getting complacent!
How do I know that you, reading this article, may be getting complacent? Sure, you are thinking, I want to bill $ “X” more, but you are complacent if you don’t market aggressively anymore because you “have too much to work on” or after you made your last placement your activity dropped significantly. See, you THINK you want more revenue, a bigger business, etc. but you may have pulled back on the throttle too early.
If this is you (it used to be me too!) I challenge you to be honest with yourself and address it. Here are three possible scenarios:
- You got complacent because you are not 100% fixed and obsessed with a defined revenue target and/or what those revenues will allow for you in your life.
- You have a defined revenue target and you are exceeding it.
- You are not complacent and you feel “behind”.
Let us address all three. In situation one, you are probably paying your bills at home and at work and at least covering your minimum credit card bill and maybe even about to take a decent vacation, but something just doesn’t feel right. You feel you can do more, that you can do better but simply are not sure how to do better or even why you should.
I find this is the most common scenario with successful people. They have a strong desire to succeed but simply lack a clear path to get there. While there is only so much one can address in an article these steps should get you started on creating focus.
A) Define exactly what you want. Don’t edit here. List all of the material things as well as personal things you ARDENTLY desire. Ideas my clients have shared with me include being debt free, putting a defined, specific amount away for critical things like your children’s college and/or your retirement, a vacation home, Friday’s off, more involvement in your community, etc.
B) You see, there are financial and non-financial goals built in. Define these items and define an exact date you will have them or that you will be doing them.
To do this properly you should invest an hour over a few different days and really push yourself to dream about what life could look like if you removed some of your self imposed barriers.
B) After you write each down and commit to having them in your life, define how much it costs, EXACTLY and PRECISELY. For example if you said “I wish to be debt free in 2 years” you need to know exactly how much debt you have. If you said you want to be financially secure in ten years you need to know the EXACT numerical definition of what financial security means to you in your investment accounts.
Scenario 2: You have a defined revenue target and you are exceeding it. Congratulations!!! My first cautionary question is have you pulled back on your activity to the point that your revenue will fall off in the next three months? If “no”, I challenge you to stretch yourself here.
Read scenario one again above. Do the same exercises. If you are ahead of your targets my question to you would be “Are you settling for less than you are capable of?” We only get one life, one shot -- is your target set at “good enough” or is it set at a point where you are living a life where you have everything in your life the way you want it. Read that last sentence again… where you are living a life where you have EVERYTHING in your life the way YOU WANT IT. Technically, I have just defined the perfect life for you. However, we all know there is no such thing, but, hopefully I have inspired the pursuit of the perfect life where you are not settling for less than you desire.
Do the exercise outlined in scenario one and I will “coach” you how to implement it later in the article.
Scenario 3: You are NOT complacent and you feel “behind”. I have a lot of experience talking with recruiting firm owner who recognize this statement. Honestly, in an economy like this, most in this category simply aren’t doing the work. PERIOD. The worst part is they THINK they are doing the work but they just are not.
Some of you in this situation are probably cursing me out and spitting on this page or burning my picture in effigy! I understand. That doesn’t change the fact that if you are in this scenario you simply are not doing what is necessary to get the job done, because the work is out there if you go after it.
Now, let me be clear. I am not accusing you of being lazy or not working. I said not doing THE work. Let us define THE work. THE work is you are in active conversations with prospects and candidates to the tune of fifteen live presentations per day combined. In twenty years as an owner of a recruiting firm and in my four years of consulting with owners, I have never witnessed a failure who executed the this very basic, doable target. NEVER.
Here is what I see get in the way… email, Linked-In, research, constant interruptions, allowing your day to manage you, the snack truck in your office compound, a flickering fluorescent light bulb above your desk, etc. Sure research, Linked-In, emails are important, but they have a place and time. This article isn’t a time management piece, but I am telling you I get people to 15 presentations a day by cutting out the distractions. Know it can be done and don’t read this thinking “but not on MY desk!”
Also, if you are in this scenario, do the exercise in scenario one and get clear on what you want for yourself and your family.
Okay! You see all three scenarios can benefit from getting real clear on what you want and that you can be the captain of the ship to get it. Once you have defined everything you want and quantified it financially here’s how you get it in your life.
Let me use some specific numbers to make this example real. I am going to use a fictitious recruiting firm owner named Joey Recruiter. Joey did the above exercise and developed the following goals:
- Debt Free in 12 months …………………………………… $25,000
- Invest $5,000 for each of 2 kids into college savings ………. 10,000
- Tithing ………………………………………………………. 10,000
- Personal Overhead (heat, mortgage, food, etc) …………… 120,000
- Family “dream” vacation to Europe ……………………… 15,000
Again, the assumption is that Joey is committed! He NEEDS $180,000 this year to do every thing he wants financially. Here’s his formula to get it:
First, Joey needs net profits of about $250k to keep $180,000 after taxes. Joey is a billing manager with two recruiters so his profit margins will be higher than a firm where the manager isn’t in production, but we can assume a ballpark of a 45% profit margin in this scenario.
This means Joey’s company revenues need to be about $560,000 in gross revenue. His average fee is $20,000 so he needs 28 placements from his office. His first-time interview to placement ratio is eight to one. This means Joey needs to manage himself and his recruiters to produce 224 interviews over the next 12 months or 4.3 on average every week.
The mistake we make as owners is we try to manage the 28 placements. We have little control over those as we don’t decide who gets offers and/or if they are accepted. We CAN and DO manage the activity (first time interview flow) that makes placements happen.
All Joey needs to do is manage his recruiters and himself to generate an average of 4.3 interviews per week and he has EVERYTHING he outlined above. Focus on what you as the leader can control within your office and that is activity.
I know this is a pretty simplistic example but you can take this same logic and apply it to a $2,000,000 firm or a $200,000 firm, simply change the numbers. This business is an emotional roller coaster. You can provide some sanity and strong leadership by managing what you control on a daily and weekly basis.
It is really that simple. When I realized this about 16 years ago, I did this exact exercise and used it to grow a firm to several million in revenue. I also knew where EVERY dollar in profit was going, whether it was back into the business, college planning for my kids, or a financially secure future.
The utterly fantastic news about this industry is that you get to CHOOSE how much you make. Your choice is not just made in the declaration of the amount you want, but the choice is also made in your ability and discipline to implement and pay the price for it. But, let’s not confuse that the choice is utterly and completely yours.