How a recruiting firm (finally!) learned how to hire for scale
We’re specialists in recruitment, but to hire for ourselves has always been one of our biggest problems.
Attuned Founder and CEO Casey Wahl
In the early years of our company, clients, and other switched on people who wanted to hear about my entrepreneurial journey, would ask a pretty standard question: “What’s your biggest issue?” They’d find it extremely funny when I’d say “Hiring!”
This still continues to be our biggest challenge.
How can you find the right people? How can you screen properly? How do you make sure you’re bringing in the exact right people at the beginning of the recruitment funnel? Who is going to stay and help us build something meaningful, to innovate recruitment on a global scale?
These are super tough questions. Startups are being born on a daily basis to try to address them.
Have to hire right to scale a recruitment firm
A big issue for us has been mis-hires. Our historic mis-hire average, over the 8-year history of our firm, has been nearly 30% (29.65%, to be exact)! Nearly 1 out of every 3 people we would hire as a recruitment consultant left within 6 months of joining. That’s hugely inefficient.
It’s not only a waste of hiring time (we have a bunch of our team meet each potential hire), but also of on-boarding, training, and one-on-one time. So many resources squandered, what a waste of time, on someone who leaves just after we’ve trained them. Furthermore, employee turnover costs a lot more than you think.
You can’t scale a recruitment firm that way. I had ambitions for us to go global much quicker, but with such poor hiring we didn’t even have enough talent coming through to execute — let alone to develop leaders who can build a new business unit, or a new office.
This is part of the reason it is so hard to scale recruitment firms. As a professional service business, headcount increase is the prime lever to increase revenue.
Most recruiting companies don’t get past the 10 person threshold. Even fewer get past the 30 person threshold, and fewer still beyond that. Structure, management, moving beyond the charisma founder, and a whole bunch of other factors play a role in few recruiting companies being able to scale, but if you aren’t hiring the right people, and your turnover is high, you’ll face a lot more headwinds to growth.
Increasing our ability to hire correctly
Recently though we have turned this around. Dramatically.We’ve increased our successful hire ratio from 70.35% to 92.86%.
Hire ratio at a recruitment company
Conversely, that means we reduced our mis-hire ratio from 29.65% to 7.14%. That’s an 86% improvement. Pretty dramatic. This has really changed everything for us.
One of the key factors has been Attuned. Now, we can understand what motivates candidates who want to work with us during the hiring process. The intrinsic motivators that Attuned’s reports reveal allow us to know if someone will be a culture fit with our teams. We can know whether or not they will likely be motivated to do (and stick with) the job of a recruitment consultant.
What I’d found from managing recruiters, is that intrinsic motivation was all the difference in those who stayed, and did well, and those who left. But I struggled to bring that insight forward to hire better. I could never really understand, with any real confidence, what drove people. If I asked, they could frame their answers to what they think I wanted to hear. If they were a bit more honest maybe they used language that didn’t resonate with me. A lot of times, they didn’t even know.
Once we had developed Attuned we could now see with data what it is that motivated our potential recruiters. With that data, we are able to have the kinds of conversations with potential recruits that saved us from some mishires — people whom we probably would have hired in the past.
Now we’re a much better, stronger company for being able to hire more accurately. Using the EQ of our recruitment consulting roots plus the IQ of the tech we’ve created— we are getting good at hiring the right talent.
Hiring is rocket science
It’s been a while since we’ve had a mis-hire. But we won’t be complacent, we still have lots of work to do to discovery the right people, get even better at matching our and their goals, on-boarding them, and having a good, productive journey together. Often recruiting companies used to say (still say?) to their potential recruits “It’s not rocket science.” But it is. People are about as complicated as it gets.
Now when people ask me what “My biggest issue is leading the company?”, “Hiring” is not my first response. Now it’s more likely to be “culture shock towards Japan. Because of our IPO preparations.” And that’s after I’ve been here for 18 years!