Hishem Azzouz identifies four barriers that stop recruitment firms from scaling: developing leaders from your recruiters, building repeatable processes, winning new profitable business, and managing cash flow to reinvest. He draws on his experience at Liquid to show how firms that master all four can grow sustainably.
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There's 4 key things that you have to focus in on, which are your critical barriers to growth. And, and these aren't in any particular order, but leadership. Number 1 thing that you need to be able to do is develop leaders in your business. So if you can't develop leaders in a recruitment business, one of the things that I sometimes see recruitment leaders get a bit wrong is they think scaling a recruitment business is about hiring lots of great recruiters. I don't actually think that's quite right. For me, the number one fundamental thing is that you have to be able to hire lots and lots of great recruiters and train and develop and retain those guys. The critical piece in that, though, is that you have to be able to turn or convert a high enough proportion of those recruiters into your future leaders. If you can't do that, your business won't scale. So first and foremost, you have to be able to identify a track. And bring into the business either experienced leaders, which is tough unless you know them already, because that, you know, from my experience, that's a really challenging thing to do. Or you have to be able to bring in people at the very beginning of their career, give them the skills and ability to be able to become really successful recruiters, and then the ones that are suited to and aligned with leadership, you need to be able to convert a high enough proportion into leaders. I think we did that pretty well at Liquid. First and foremost, I think we were quite good bringing people in and putting them through that conveyor belt where they went through a constant learning and development program, upped their skills and became, you know, we have people in their mid-20s running 40, 50-person, you know, divisions of the business, multi-million pounds, huge profitability-wise units of the business. So I think we were quite good at developing leaders. The second thing that I'd say is really, really critical is scalable infrastructure. And if you can't put in place, if you can't identify in your business what the core business processes are and then put in place continually reviewed but optimal working process for all aspects of your business, I think it's going to be really, really tough to scale because you— I think one of my favorite— I think it's from a book called The E-Myth— the processes run the business and the people run the processes. And that always stuck with me because I think that's really, really true. If you look at what business is, business is about having really good process. So if you can't put scalable infrastructure and good processes into your business, I think you're going to reach a point where you don't grow anymore. The third thing would be new business, new profitable business. If you can't continually win profitable business, whether from existing accounts by landing and expanding accounts or by winning new business and then turning that into profitable accounts, you're not going to be able to scale your business because the business is going to starve. And lastly, cash flow. The fourth thing I'd say that you've got to be really, really good at is cash flow. If you can't win enough profitable business where you've got strong enough cash flow to be able to continually invest in the first 3 things that I described, you're not going to be able to reinvest back into the business to grow aggressively enough to keep scaling. I think if you look at those 4 things, we were pretty good at those 4 things at Liquid. And then if you look at those and then you put them onto the other side of the coin, they're probably a good starting point to say, well, how do I ensure these barriers don't happen? And if you're doing that, you're probably setting yourself up pretty well to be able to scale. The Recruitment Mentors podcast is proudly sponsored by Vincere and the award-winning Sourcebreaker.
