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Episode 33: Recruitment Real Talk: Pros, Cons and the Consultant's Perspective w/ Phil Topper

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In this episode of The SME Growth Podcast, Dave Parry and Richard Buckle are joined by special guest recruitment consultant, Phil Topper. They have an honest and reflective conversation about the pros and cons of SMEs using a recruitment consultant when it comes to filling vacancies and tackling the current issues within the talent pool. Covering cost, ethics and tactics, this is a great conversation for any SME considering a recruitment consultant and want's to know more about how it could benefit their business.

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Please note: Whilst all transcripts are double checked for accuracy, they are transcribed via Otter.AI so may contain errors.

David Parry 02:19

 Hello, and welcome to another episode of The SME Growth podcast. It's designed for small and medium sized enterprises who want to grow. And it's hosted by us here at Wellmeadow agency based in Shrewsbury. I'm Dave Parry. And as ever with me is Richard Buckle My co director. Hello, and welcome to you and everybody else. And we're very lucky because we have a guest today we have Phil Topper. 

Phil Topper 02:56

Hello

David Parry 02:57

Hello Phil, thanks for coming on. Phil's comes from a company called Seymour John. And they're a recruitment consultancy firm. So we thought we can have some sport here. Let's ask a recruitment consultant about recruitment, consulting. Just to take the focus off consultants for change because we're normally the butt of everybody's jokes. So we thought let's get someone else in and share the pain. So Phil, you very manfully agreed to come in.

Phil Topper 03:23

Thank you, David for the invite. 

David Parry 03:24

He has got no idea what he's got himself in for

Phil Topper 03:27

I'm strapping myself in

David Parry 03:28

Strap in, hold tight, here we go. So we might as well start with a few introductions. So Phil, how did you get into this? What do you do?

Phil Topper 03:38

How did I get into it? So really quickly, I did a degree in economics, went into a company called Hays PLC, about a year and a half after my degree 

David Parry 03:49

Quite a lot of people will have heard of them

Phil Topper 03:50

A quite well known PLC had a great time for 14 years, probably diverged from the culture in the last year, and thought I want to be happy again. And knew that Mr. Seymour and Mr. John had just set up a business in the previous year, and they'd be an open door. So after some discussions, which all started with a dream that I'd had

David Parry 04:14

Very strangely, bizarre

Phil Topper 04:16

I got I got in touch and you know, to cut a long story short, I've I'm about to reach 10 years with the business in November this year. 

Richard Buckle 04:24

So what was what was the dream?

Phil Topper 04:29

It's really hard to talk about this without saying negative things about my former employer. But essentially, I thought I'm 37 years old. The final salary pensions closed. That's 25 more years of this, which I'm not enjoying anymore. What am I going to do about it? Am I going to set up my own business? How am I going to phone up Mark Seymour and Emlyn John and then I woke up

David Parry 05:01

No Way

Phil Topper 05:02

It was that lucid

Richard Buckle 05:02

Yes that's very lucid

David Parry 05:03

Like a tape recorder under his pillow.

Phil Topper 05:06

Yeah, so all I can think about all day was what we're going to do about this so I dropped a dropped Emlyn a message it went haha I had I had a dream that I was leaving Hays and coming to work with you guys last night he misinterpreted it as I'm leaving Hays coming to work with you guys. Apparently he was told me later was had been jumping up and down on the bed with his his wife who I know, well, celebrating the fact I was coming to join them. And then he reread it and went, Oh. What a lovely reaction to have, yeah, oh, let's have a chat.

David Parry 05:43

You didn't need the interview after that.

Phil Topper 05:48

We still had 3 meetings, I think, before we sort of shook hands, because you've got to make sure that you know, it's a startup then and they will do something slightly different to what I do. So needed to feel like a business. But they've done an amazing job of the setup. So also, Emlyn was the luckiest man I've ever met. And he and he still is, if you bet on a horse, you bet on the same horse as him. But he does an amazing amount of research, you wouldn't believe the amount of research you've done before you set the business up in looking at the area he was going to go into and looking at the strength of the competition.

David Parry 06:21

So just briefly, then it's for Seymour John, not an advert. But is it different to other practices, 

Phil Topper 06:26

I guess the, the aim has always been to be the best, the best service provider in the market. So that's what we're trying to stand for. It's not trying to be the cheapest or the biggest by volume. It's trying to be the best service provider. So hopefully, we're where you come to, if that's what you're looking for. And we could talk a lot I'm sure we'll get on to issues around price versus value and so on later in our conversation, but but we're trying to offer a lot of value. So I think we we tend to employ very experienced people at Seymour John, because to give an example I've just spent 15 months looking for someone to lead on technical operations. And we found we finally found Richard. I wasn't prepared to take any old person, it had to be someone who I felt would be better than the competition. Or, to me, what's the point? So you've got to be the best at something. Okay, with the best at something you'll grow a business, right? Yeah, no like it. So that sounds good. Sounds solid

Richard Buckle 07:21

That's why you've come on this podcast

David Parry 07:24

Come to the best. Honestly, that's the advert over now, general, general answers now, I remember we're trying to help SME business owners and managers here. Because a lot of people in that position are caught really on the horns of a dilemma when they need to recruit. Because it's not all plain sailing to recruit yourself. Neither is it all plain sailing. If you go to a specialist recruitment, consultancy and do that way, there's definitely pros and cons. And it may well be that even in one firm, some roles, suit that approach some roles, maybe suit marketing aspect. So we want to cover some of those stuff. And we'll have some, some jibes along the way, I'll no doubt at our own expense, too. Because we've all been there. So I suppose if we start with some of the positives, then what's the what's the point of a recruitment consultancy? So why does the market even exist

Phil Topper 08:16

The market exists because it's very hard to to go to the market yourself and do a comprehensive sweep of the talent pool and know that you've got the best shortlist.

David Parry 08:28

So a lot of internal recruitment efforts won't even try and go down that route, they just put an advert in

Phil Topper 08:34

Yeah, they put an advert in and it's potluck. And you see what happens. Sometimes you get lucky, most of the time You don't, at the moment, particularly in the talent short market. Yeah. So last year, we see a lot of companies advertise, and perhaps they're coming to us a couple of weeks later, when, you know, the response hasn't been great. And and you know, and you get that because, you know, obviously the big con with recruiters is that it costs money.

David Parry 08:58

So benefit number one, access to more candidates 

Phil Topper 09:01

More candidates, I think what I'd say is that you get what you should get, if you use the right sort of agency with the right approach is is they should have done a really thorough scour of the available market for that, that talent that you're looking for. And what you should get is a well researched high quality shortlist versus say an advert where you just get potluck and

David Parry 09:26

well there's a sufficient rate, especially those wanting to take a bit of a cheap potshots at it that recruitment consultant will go on to LinkedIn find some strangers and dress them up with a nice letter headed CV with their own brand and forwarded on right so I guess there will be some firms out there.

Phil Topper 09:43

I know a lot a lot of a lot of will we all know that a lot of recruiters do operate a bit like that. You know, the worst example I've heard of is a candidate CV turns up at a company and and we knew the candidate she had no idea her CV had been sent to that company by that agency. Let's just Got a CV off CV Library and posted it on her behalf 

David Parry 10:03

So what's a good tip then somebody in a management, position recruiting? How can what sort of question? Could they ask a recruitment consultant to test that they're doing it properly, so to speak.

Phil Topper 10:15

Okay, so you'd want to ask the recruiter what exactly what processes they went through? And and and what their methods were of finding candidates. So most will have access to places like LinkedIn. But then you might want to say, Well, do you have the LinkedIn recruiter licence? Or the more basic one? That's a good question, because the recruiter licence is a lot more powerful when it comes to candidate reach and your ability to get to the right answer quicker. So with a recruiter licence, you can message you know, 250 candidates in one go and do and do the same job in a minute that, you know, imagine sitting there and individually doing that 

David Parry 10:52

Anyone just scraping LinkedIn will probably have that, Right. 

Phil Topper 10:54

So yeah, we've all got a basic LinkedIn profile and follow most of us have. But yeah, we've taken an awful awfully long time to go through the same process without that 

David Parry 11:02

agency not doing the depth of research, you've talked about well have paid that money just to sort of entry ticket into the market to play it their way. 

Phil Topper 11:09

Exactly. So I can illustrate this with an example perhaps, but so I was asked to recruit into into my core market for a client the other day, and I thought, Okay, this, this won't be too difficult. You've got some criteria, but you know, we can do this. I've done I did the LinkedIn thing. You know, using the recruiter licence, I did the, we've got a bit of software that sits on top of, you know, Reed and CV Library, our own database, and it pulls all that information together in one go and, and sift it for you. We've got got my own network, of course, over many, many years. But it's it, I had to reach out to 62 different candidates, to be able to build a shortlist to get a solution for the client, it was an awful lot of work. And it's just because it's a talent, short market. People are being looked after by their current employers. So you have to work quite hard to get the solution that you're looking for when you recruit. So if you want to work with a recruiter who's prepared to do the hard work, essentially, he's got access to those tools, has got the time resource to actually do it for you. And he's got a he's got a really good toolkit.

David Parry 12:20

Do you think you develop more of a nose for because you're doing all day long? So you can tell our candidates presented are they're seriously looking for work? Maybe even if they're a good fit in a way that an in house recruitment process? Couldn't hope to achieve? Or is that overplaying?

Phil Topper 12:36

No, you do get? I mean, you if you're an experienced interviewer, you get obviously get better and better at it over the years. So if you're using an experienced recruiter who's you know, conducted 3000 interviews or something over their lifetime, then they should they should, they shouldn't be pretty good at sniffing out the good talent from the, from the people that are maybe covering up one or two things in their history.

Richard Buckle 12:56

If you've got like a top question that you ask, what was the good? Like, what's the most insightful question that you can be honest,

Phil Topper 13:02

the the thing that I, I enjoy talking through most I think is the most insightful is actually getting someone to give me a guided tour of their CV stopping at each job move to understand why they left the company they left. So what were their motivations? What, what are they? What are they thinking about? And why did they take the job that they took? And what did they hope to get from it. 

David Parry 13:22

So you put more of a play on the changes the reason for the changes than necessarily what they did while we're in the jobs. 

Phil Topper 13:29

You talked about that. So you can talk about that in things like the competency based questions later on, because you want to dig into that too. But getting the getting the story is a way of understanding what really motivates someone. Then you can talk about, you know, the different competencies they have, and how they've demonstrated their skill within each job, which, which you do. And with some help from a client last year, called Dave Darby. We also developed an approach looking at culture and values based interview, where you almost threw away the CV. And you just you just asked, asked questions that weren't too obvious to the candidates to understand, you know, what, what makes them tick, what their core values and beliefs are, and just whether that aligns well to the company's values and beliefs.

David Parry 14:15

Does it take people by surprise in the interview?

Phil Topper 14:17

I think it would it, we had some I went we had some broadly good feedback about the process. Because they, you know, they felt they felt they'd had quite a quite a deep interview. And I certainly felt like I've really got to understand them. So

David Parry 14:33

he's not giving you his killer questions.

Phil Topper 14:35

So yeah. There isn't there isn't there isn't a killer, there isn't really a killer question. There's no magic magic pill to find the right candidate. But if you I think it's really important that you interrogate the job moves because you know, you need you need to understand if that candidate is joining you for the right reasons. And listening to their story. Up to that point is going to tell you an awful lot about that.

Richard Buckle 14:57

And is that things like where they may be negative about the crime opinion it's all or, you know, that might be a poor indicator or so it's I'm actually really looking to move on and develop. And so what sort of indicators?

Phil Topper 15:09

So a couple of examples would be, you know, meeting someone, relatively recently they'd, perhaps fallen out with a couple of their previous employers. So you know, there's, there's a red flag there maybe to explore, you know, anything can happen, once we've it's happened twice? Is there a pattern or you may be a bit more difficult to work with or. Yeah, another candidate, you know that, that they've made a couple of moves just because that after two or three years in a job, which is relatively steady state, they get bored and want to move on. So you know, that if you employ that candidate, you have to keep them challenged, or they'll leave. So you just get these insights along the way?

David Parry 15:48

So this is a bit of a leading question, because I know a little bit about how you work because we've worked together before on behalf of mutual clients of ours. And you keep in touch with people you've placed after you've placed them? Which, when you first start with that, that surprised me a bit, I didn't realise that. That's kind of an angle. Now, I guess it's in your interests, 

Phil Topper 16:07

you would generally do it, if you're placing managers and directors, for example, those people are your clients, as soon as they start in the new business, so you you're keeping in touch because you're

David Parry 16:17

because they may want to recruit. 

Phil Topper 16:18

Yeah, exactly. And they probably want you to maintain that relationship. Because you know, if you've done a good job, and they've, you've formed a trusted relationship, then you're probably the person they're going to want to talk to. So it's in it's a welcome connection. I think if you're placing, you know, let's call them, you know, junior level, people who aren't in a position of recruiting in the future, you would tend to drop off that contact, you keep in touch for a period, you know, make sure they're settling in, okay. You probably, maybe just keep in touch with the client, then maybe after three months, you know, maybe six months, maybe a year and you just keep checking.

David Parry 16:58

Maybe I over interpreted this, but I always got the impression that you're almost acting as a bit of a career coach for some of the more junior middle ranking people that you place, so that you could spot when they're ready for the next move or advise them whether that's a good idea or not, you do about that? 

Phil Topper 17:16

Yeah, no, it's it's a, it's a yeah, you're often someone's, you know, it's a career coach career Angel, you and you encourage them to use you for that. So that, you know, you get you get to hopefully give him some good advice along the way, but it just builds a trusting relationship. So I think this is where you look at people behaving transactionally, and people behaving just thinking about the long term good. And I think, you know, you're experienced guys yourself. And you'll know when you've been in business a long time that actually, if you try and do the right thing by people, and you try and think about the long term good of a relationship or a company's health. You don't need to worry about making the next transaction. You can relax as you'll get, you'll get people coming to you when they need you.

David Parry 18:05

It's the same message we give out to all of our clients when we're helping them to generate leads generally, you've got to be helping in non obvious nonlinear ways in between each transaction. Yeah, you got to be around for the long haul. Really? Not just waiting. 

Phil Topper 18:19

Just interested when they need Yeah, when they want to spend some money. Yeah, so 

Richard Buckle 18:25

slightly off topic question. But we often talk about AI on this podcast. What was that? What? How's that impacting that recruitment sphere? Are you seeing that? Yeah, are you?

Phil Topper 18:37

Yeah, I was quite worried about this a few years ago, from honest because I could see it, you know, potentially taking away my job, my business, you know, what am I gonna do when I when I takes my job, it's a genuinely a realistic

David Parry 18:51

The threat is higher now?

Phil Topper 18:53

Well, I just thougt the only way to, the only way to handle this is to is to get at the front foot of it. You know, what, what can I do as a recruiter to build some AI tools into our process? So I briefly mentioned that I have a piece of software that sits on top of Reed and CV Library, you can fire into LinkedIn, and that that's a that's like a sort of smart search algorithm. So it intelligently will build the search sort of for you. Something that can be a really complex process to get right with no errors. It's like building a complex mathematical formula. Essentially, it makes that simple.

Richard Buckle 19:30

Using anything, are you seeing people starting to ask for that now of people looking for AI skills, they're coming to you saying, We need someone with at least some understanding of the 

Phil Topper 19:42

NBA or or the only thing I'm really seeing is, you know, you want everyone wants someone who's very system survey, we've always wanted people who are really good on Excel, you know, that hasn't really changed, getting more requests for Power BI skills and so on now, so that is kind of data analytics capability, but I've not had anyone yet say I really need someone who is at the forefront of AI.

David Parry 20:07

Yeah, well, that's good question. But what about the other side of that? Do you find ever a candidate maybe using AI, to maybe write a cover letter or polish up their CV? And give a falsely positive impression of themselves?

Richard Buckle 20:22

There's so many memes of this online at the moment, isn't it? Like when you've got ChatGPT to write your CV, and you've got, like, the senior coder or something? On the job, you're just sweating?

Phil Topper 20:33

Horribly Wrong. Yeah. I haven't haven't seen any obvious examples of candidates using that to write their CV

David Parry 20:41

Would you know?

Phil Topper 20:44

I might not. I mean, I've, we've, we've started just started using a bit of sort of automated marketing software ourselves, because it's something that I felt we were really bad at. And, and that's got a, almost a ChatGPT function within it, where you can get it to write an article, you ask it a question, it will write you an article on it. And you know, it's a decent, it's an okay, starting point. But if I sent that out there professing to be some experts in recruitment. And this is the best thing I could say, I don't know who people would want to follow my advice for very long. So you've got to put the human element into it to make it real and meaningful and current and all that sorts of stuff. So I haven't found a way yet to work without, without the human interaction. 

David Parry 21:27

Maybe in a years time or maybe quicker, we'll have you back and see if you've noticed any more. Interesting. The other question, we just talked there about you keeping in touch with candidates, yes, part of the great coaching, one of the and I'm aware of one of the criticisms that people level at recruitment consultants, and they may not be as rude to level this to your face. But they talked to me about imbalances, you've probably heard them what we have in the past, but the danger you have of wanting to find the best solution for that candidate. And ultimately, maybe it is the best solution for their current employer could well be for the next employer, but taking somebody out of a job that you've placed them into. Are there any sort of codes of conduct in the profession that you either never do? There are a new set of circumstances and how does that work? 

Phil Topper 22:12

Yeah, there's definitely a code of conduct. So the rule is, if you've if you've placed someone in a job, and this is a really a rule that I would, I would have thought that 95% of recruiters, maybe that's generous, a high percentage of recruiters should, should, should and will abide by. I appreciate that you got some grey areas? Because you always do. You know, I've had people say, Well, what about, what about four years later? What about 10 years later? Is it okay, then?

David Parry 22:41

How do you operate? And what's what's your guidance on that?

Phil Topper 22:44

what what you would what I would say is that if you've, you know, you've got that question you asked earlier, if you're keeping just keeping in touch with someone, is that okay? Well, it could be okay, if you're, you know, you're genuinely concerned about their well being and having anyone in the company, are you just keeping in touch them to try and encourage them to move jobs again? So some of it's about intention? And we certainly have, we had some quite deep conversations about this, you know, six months, nine months ago. But it was interesting and about how we, you know, how we set our ethics up. And were we all on the same page in our office. And you know, we needed to get aligned on this. And we needed to be, we needed to be clean on it. Because actually, again, making a transaction versus long term relationship, if you want to maximise your business in the long term, you actually do need to work by the rules that your clients would appreciate. But yes, you've got to find balance.

David Parry 22:44

What's the conclusion then?

Phil Topper 22:45

Well, you, if you've placed someone in Job, you don't touch them, until such a point where that person then gets in touch with you. But then the other thing that can happen now is someone's CV suddenly appears on a CV Library that you've placed two years ago or something. Well, that says, you know, I'm looking for a job, right? So would say, just seen your CV on Zillow? Are you looking for a job? Or are you just updating your details? For some reason? And you know, of course, they're, you know, they're putting, they're putting their marker out there, aren't they? A genuine, this might sound like I'm trying to be too whiter than white. But I'm genuinely if I've placed someone in a job, I'm genuinely disappointed if they're looking to move on. It's not a good thing, you know? So why is that you want to understand why that's happening. And it might just be Well, I haven't had a pay rise this year. Well, why don't you go and ask the boss cause I'm sure they'd make sure they had that conversation, now, rather than when you've got another offer to go to. And it's going to make you look a lot better in the company long term. So you can give people strategies to deal with some of the issues they've got, and often genuinely do that, which might sound counterintuitive to trying to make money out of recruitment. But, again, if you think about, you're there to give the right advice to people, then they'll come back to you because they'll trust you. If you give self serving advice, then you'll just be like all the rest and you won't build a strong reputation. So if we've placed someone, but we see they're actively on the market ganja, they've suddenly opened to work on LinkedIn or their CV suddenly all over CV Library, then we will get in touch.

David Parry 25:24

That's a rule that pretty much most recruiters would follow the same.

Phil Topper 25:26

Most Recruiters would follow that. And it's really an industry sort of standard code of practice. 

David Parry 25:31

Yeah, fair enough. And the other worry I have and I've heard expressed around the sort of conflict of interest area is that if you've got a shortlist of candidates that you're pretty keen on, and maybe the company recruiting has got a couple of other candidates from another source, maybe direct applicants, perhaps or someone they know. So there's a few in the in the pot there? How do you possibly ever manage that conflict of interest where clearly you want your candidates to succeed? Because in many cases, and we'll talk about fee structures in a minute, but in many cases, you don't get paid unless one of your candidates gets placed. So how can you be truly impartial about whether Candidate A from you is better for the job than maybe Candidate B than they've got?

Phil Topper 26:11

Yeah , I think I would have, I probably learned to handle that in a far mature way now than I would have when I was 25, or something. But yeah, back then I would have, you know, been trying to promote my candidates and all the rest of it I'm 47 now. So 22 years later, you know, you think look, it's about that company's got to get the right candidate. Okay, if they're going to succeed in the best way. And if, you know, if often they'll be open say, well, we've got, you know, the candidates name is X that we're looking at. And sometimes we'll say, to be honest, we think they're really good. If we know them. I didn't realise you were older than 25 So playing the long game approach Oh, no. So that's an ethical conundrum for you. Most of the shortlist we've given you, you know, the only one that's going to match up to that person is x, you know, if that's your standard, yeah, that's great. Maybe it's just see those two first, and we'll maybe look at the others if we need to later. So you you just better better off having an honest conversation. And always thinking about the long term scenario. And the I've had a I think the big marker for me around ethics was at a situation about 15 years ago, where I've been working really hard on this vacancy. The perfect candidate came to see me while my client was was on holiday for a week. And then I was going away, and they were they were they were they were amazing. They were a shoo in as it were my my 8000 pound fee was was more as made, you know. And, and it right at the end of the interview, he said, oh the only thing to mention, by the way, I'm going to be going to Australia in a year we are immigrating. I'm having understood there was no way he was not going to change his mind on that. Even if he absolutely loved the job. He was definitely going I said, I'm really sorry, I can't put you forward. Don't worry. I won't say that in the interview. Yeah, well, basically I'll lie to the client. I said, I'm so sorry. I can't this guy really trust me, He specifically wants someone to be there for five years minimum. I can't put you forward. And then I went on my holiday. I came back from my holiday. And they'd employed him through another agency. Yeah , so I broke the bad news to my clients. And so just so you know, you know, this is the conversation I had with him. This is what to expect. The candidate didn't thank me for that. But you know, he was a liar. So you shouldn't got a job on false beat. He could have got he could have got one year contract somewhere. But, you know, that's cemented that relationship with that client forevermore. And, you know, he never went to another agency because he knew we can trust me. Yeah, 

David Parry 28:52

It sounds like your view on that has matured or grown and developed over the years you've been anywhere you realise that? I hear a lot of youngsters going into recruiting these days. I know lots of children of friends my age who are now going into the workplace early 20s seems to be the recruitment, recruitment, industry hoovering up all this young talent, fresh graduates, I guess they don't have those wise years of experience behind them, you can only hope they're being coached well 

Phil Topper 29:17

I think that you find in a lot of you might find this in, say a large corporate recruiter, where it's a bit more like a sausage machine, you know, a bit more like a factory approach to you know, whipping people by KPIs to deliver results 

David Parry 29:28

But they are very commission driven as well, isn't it?

Phil Topper 29:30

Yeah, and you've got to, you've got to hit this target every month. Some some companies who perhaps, force their employees a little bit harder than others to hit those targets tend to generate a culture where, you know, you put under so much pressure the ethics fray quite quickly, in order to hit those targets. If you take more of a long term view, then 

David Parry 29:53

Is that another good question to ask any potential recruiter firm that you might be thinking of engaging as a business owner that you know, how do you reward your staff, how heavily incentivised are they 

Phil Topper 30:03

You know, all recruiters are paid on commission. So, I mean, probably we probably pay one of the higher levels of commission and in our company, but I think it's just about the culture, you know, the owner, the manager, whoever it is, has got to drive that culture and got to believe in that culture to make that stick. And it does work long term. I don't make half the number of business development calls I used to make in a big corporate, I just think well, people will come to you if they trust you. 

David Parry 30:36

It's the whole inbound marketing philosophy, referrals and stuff, so.

Richard Buckle 30:42

So, brass tacks, what's it gonna cost me, Let's talk about pricing structures? So this must be the question you get a lot

Phil Topper 30:50

Yeah, we get a lot and most most recruiters operate in the zone of 15 to 20%?

David Parry 30:57

Is that a starting salary or package?

Phil Topper 30:59

So were you thinking about fee rate when you said, what's it gonna cost me? 

Richard Buckle 31:03

Yeah, so what's the structure?

Phil Topper 31:08

Yeah, most recruiters operate on a contingency basis. So that means that, you know, the fee is contingent upon the candidate actually starting work on day one, at which point, you know, the invoice is released, you know, and that's typically between 15 and 20%. There's no hard and fast rule as to what you should pay as a, as a as a as an SME, you're looking to recruit around that range. A lot of people say, Well, I want 15 Okay, well, what kind of what kind of service do you expect for that? So for 20%, you might get someone who's, you know, looked at 400 CV, so you know, approach 62 candidates and, and you'd really know you've had a incredibly thorough search 15%, you might get a bit more of a bundled seats approach, you might be doing what you're probably doing more of the work yourself as a as a as a line manager, or HR manager to sift the CVS and to work out what's the what's the argument

David Parry 31:56

Then what's the argument for charging more just because I'm prepared to pay a higher salary.

Phil Topper 32:02

So the argument has generally been that if you're, if you're looking at it, let's say, a finance director versus and accounts clerk, your account clerk will have one interview, it's a relatively quick process to find someone, you know, it's a very fast moving part of the market. You know, this is who's available this week, who would you like to interview, let's get it done, job offer out, you know, within a couple of weeks, whereas in our finance director process that might take you a month just to do the research. 

David Parry 32:33

So I get the get the point about the grey, the seniority felt like, whether I'm paying 90 grand or 100 grand for that salary? Why would you earn an extra two grand if you're under 20%?

Phil Topper 32:44

I actually got some sympathy with your points, genuinely, other than the argument I've just given you, I don't really have a better answer than that.

David Parry 32:54

It's just traditional. That's just the way it is.

Phil Topper 32:55

It's the way the market has always been structured. And yeah, you're right, you're just paying, obviously paying more because it's the highest salary, aren't you? Why do you need to put a bigger percentage on every you know, what you'll what you'll tend to find, as you get more senior, as you might be asked to start paying retainer fees, where you might be asked to pay retainer fees if you're doing a campaign where you're hiring multiple people at the same time, right? And the reason is, the recruiter quite rightly, is trying to derisk their time. Yeah. So all of the work in recruitment is, is at the very beginning of the process. And the easy bit is almost, you know, now we're just arranging interviews and coordinating something. So, you know, if you're going out there to do, you know, three, four weeks worth of research, and you haven't got, you know, some sort of retainer. 

David Parry 33:41

Would you want to be exclusive?

Phil Topper 33:45

Yeah, you'd want to be Yeah, you'd always be exclusive with a retainer, just because the company has parted with some money. And, you know, they're not going to want to do that with multiple agencies,

David Parry 33:54

just do you think it costs the company about the same whether they do the retainer

Phil Topper 33:57

we would charge the same whether it was a retainer or not, typically, and I'd be more tempted to charge less if it was retained? 

David Parry 34:03

Because you get more if it up front?

Phil Topper 34:04

Because I've de risked my process. So where you where we find, you know, where's most our time us spent, you know, you can leverage this if you want to talk to a recruiter after this hearing this conversation. But if if I'm working with a big PLC, where they've got the ability to move people around in their business, there's a far greater chance we'll get halfway through the recruitment process, and they'll say, Oh, we find a great internal candidate now. Thanks for your time, we're obviously not going to pay you for it. If you're, you know, an SME going out there saying no, we really need this person. You know, we're only going to work with you. You're, you're in a better position to negotiate a good price. You will negotiate a better fee percentage if you offered to give that recruiter a retainer as well, because you've you've de risked their process. 

David Parry 34:52

Well I've heard of people doing the whole trading on the percentage, but I'd almost be interested in that other point I raised just now that if I think I'm going to be paying around around 90,000 a role. But it could go up to 100 or down to 80. Just agree with you a number up front, you know, given that I'm aiming and it won't pay you whatever. And we'll just agree a fixed fee yet, but still contingent on that.

Phil Topper 35:12

We do that very often are you doing it's a perfectly sensible strategy. So you know what you're paying for you're not people, you know, I'm sure the employee would worry that the recruiter might try to promote more expensive candidates to increase their fee, you genuinely don't think recruiters tend to operate like that I think most have got good ethics,

David Parry 35:31

You can understand the fear is there, especially for someone who's not used recruitment? 

Phil Topper 35:34

Because all instances, absolutely.

David Parry 35:36

And guarantees are another one. I've always been quite interested as to almost what's the point because they tend to expire quite quickly, three months, maybe typicals 

Phil Topper 35:45

12 weeks, for most recruits, systems of business.

David Parry 35:49

So as a new employer have a new starter to find out enough to call it a within 12 weeks, you got to be the very hot on your induction process and onboarding or download ruthless modules. 

Phil Topper 36:02

This is about maximising the level of assurance to the employer, that they're hiring the right candidate, and how can you actually achieve that. So you can do some of that by doing a better job, before the offer even goes out. So I've become a really big fan of referencing people who come to me and say, I'd like a job, you know, we might not have an offer for yet, but actually, I've not worked with you before, I don't really know the businesses, you've worked with them what they think of you. So do you mind if I talked to a couple of your previous managing directors, and if you know, if the references references are great, then you providing a pretty assured higher speaking, so you can de risk it that way for your clients. And that obviously adds a lot of value to them. So you can ask for that. If you if you're going to recruiting This is the service, I want you to say, well, I'd like you to reference the candidates for me, please. So I would typically write a write up a transcript. This is a good way of doing it. Actually, if anyone's listening, people think I don't want to give the name of my referee tool because if I have to do that, every time I move a job, they're always going to be getting phone calls. So Well, I'll tell you what, there's a better way we can do this. Let me let me call them, I'll explain that, once I've written up the transcript of their conversation with me, they can see it and sign it off as a true version of, of your character, it will have my logo on it, you know, an independent third party is taking this reference and ask if you can have a copy to the candidate. So the candidate gets a copy. So they've had one conversation, this referee, we've got a third party reference on file, and the candidate can have a copy to use every time they apply for a job description. And so you know, that person's time is maximised, the candidates got value beyond beyond having to use me to get their job, they can take that with them for the rest of their life. So and that way, we've added more value, and then that gets appreciated. So it's another way of building our, our kind of reputation.

David Parry 38:02

We talked about the guarantee there. Let's say someone didn't work out after six months, what sort of approach do you tend to take in that sort of, 

Phil Topper 38:09

so if it's a if it's an exclusive director hire by the way, I now offer a six month guarantee up to that level, but I wouldn't for a lower level position, but we will offer 16 weeks instead of 12 If you work exclusively with us. So you might find recruiters play around with that a little bit. But we would we take like a goodwill approach again. So we want that company to think we've behaved in an appropriate manner in such a way that they want to deal with us again. So if it's, uh, you know, they've left after six months, and the guarantee was only three. And okay, it's going to cost you something to recruit, but you know, we're not going to make any money out of it this time. So far, breakeven fee is average fees 14% Or was 14.5 when I calculated it four years ago, by the way, so I'm, you know, I need to make at least 15 to make any money at all and 15 I'm not making much so that gives you an idea of what interesting recruiters make so yeah, I'd look at charging and I and I've had to do that recently and said look, she did it just just below just below are our breakeven point because they hadn't hadn't stayed 

David Parry 39:17

Your goodwill view takes a long view as well 

Phil Topper 39:20

You've also sometimes got to look at is it is it why has it gone wrong? So if it's gone wrong, because you know, the candidate you know, behaved in a terrible way when they joined the business. I think that's more on the recruiter. If it's gone wrong because the company's but behaved terribly towards the candidate. But then you need to you need to probably cough up and actually what you want me to put someone else in there, how do we avoid this happening again, and how do we make sure that 

David Parry 39:50

Has there been clients you don't want to work with again?

Phil Topper 39:55

Yes. We wish we won't name any names, but people, you know, obvious ones, you know? Are people actually going to pay? Pay the bill? Yeah, someone who's taken you, you know, we've all heard about six months to get paid, you might not want to work with them again. There's companies where, you know, I, I was aware that the owner's ethics are extremely dubious. And I didn't want to be associated with working with somebody like that. I saw him the other day where we had look on Companies House and the director who owned the business had had about 52, different directorships or something that looked like he regularly opened and closed businesses and probably took his suppliers for 1000s of pounds every time as well. So you know, you don't want to you don't want to be associated with those sorts of businesses. You want to give your candidate who trust you a good experience, you know, it's not just about wanting the client 

David Parry 40:50

Well you've got two customer's there, that's the agency model. What do you think, does he have the job? 

Richard Buckle 40:58

We'll have to negotiate the fee up

David Parry 41:00

to 14 and a half? I think that was quite useful really, got some good tips. We used to using recruitment consultants for ourselves and for, for our clients, and we were seeing them around.

Phil Topper 41:13

People talk a lot about the price when they go to recruiter how I want you to do 15%. And, you know, for obvious reasons, I'm saying, Well, we're barely making any money at that typically. So you know, why should you pay any more than that, and I think that's about then getting the right experience from your recruiter. So you know, don't think don't think you haven't got the time to let your recruiter come and meet you. That hour or hour and a half that they spend with you getting a brief understanding you understanding your business, you'll get ROI on that return on investment, you know, very quickly, by only seeing the appropriate candidates for interview, not wasting your time, see, you know, two or three that weren't that weren't right.

David Parry 41:50

So there should be getting better candidates, putting less in, and, you know, getting an independent view.

Phil Topper 41:55

So make sure your recruiter comes into to see you, I would advise you to work exclusively. Because you've given your recruiter, you've, your recruiter has taken emotional responsibility for solving your problem. And if they've done that, they will work really hard to deliver it for you, you know, there'll be fully on board. If you say, you know, I've, I've given the problem to four of you. What sort of service you think you're gonna get, yeah, but people think I need to do that to spread the net to You don't need, you don't need to because people tap into the same resources now like LinkedIn, like CV Library library, every recruiters got access to those tools, generally speaking, so you can just yeah, just find the right one to work with, and then work with them the right way, and you will get far better value and have a far better experience with the recruitment process.

David Parry 42:21

It's a self fulfilling prophecy then I think he's defended the profession reasonably well, . Okay. Yeah, he's done a good job.

Phil Topper 42:47

We don't get everything right either. And sometimes we have to, you know, you know, apologise and, you know, fix it, and so on.

David Parry 42:58

Really appreciate you coming in, Phil. Very much, much. Thank you. So you've been listening to The SME Growth Podcast from Wellmeadow. Thanks a lot, again for making it through another one. And as I asked every week if you can then please follow on Spotify or Apple or wherever you listen to your podcasts, and maybe mention it to some of your friends in business and tell them what we're doing and hopefully point them to some of the content that you find interesting. Anyway, good luck with your businesses.

Further Resources

As mentioned in the episode, we're experienced with recruitment from working with consultants and doing it ourselves! We've compiled our knowledge into our Ebook "Is It Time to Recruit Well?", and you can download this helpful resource for free

Download the free e-book

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