Cracking the U.S. Market: Expert Insights for Recruiters with Sophie Reed

Sophie, welcome to the podcast.

Thanks for having me, it's good to be here.

Um, looking forward to this because I think I'm in Austin, I'm interviewing people that have moved to Austin or have been in the American market for however long, and you've been specifically focused on the American market, specifically placing and moving around recruiters in the American market. Yeah, for nearly 6 years.

Correct.

So you are very well positioned to talk about something that, as we're saying today, that I think has been, has become more and more on the agenda for UK recruitment businesses.

Yeah.

In terms of diversifying where they do recruitment. Obviously, there's so many things that you see online around the US market, bigger fees, less competition. But today in this conversation, hopefully everyone listening, they're going to be able to walk away with just some really tangibles, some real tangibles around how can you increase the chances of making it a success in the US. Yeah, just because the opportunity is greater doesn't mean that it's easier to succeed, right? And you've specifically been doing this for 6 years. I think, yeah, really cool to be sitting down with you and really diving into this. So just to give everyone a bit more context, so yeah, so you've always been in rec-to-rec Um, so yeah, for the first 3 years of that, it was a business called Tempting Talent. Always been US-focused. Um, but a lot of that there, you did it from London?

Yeah.

It's a lot of late hours.

Yes, a lot.

And then you launch your own recruitment business?

Yeah.

Which is gonna be 3 years old in February next year, as you just said. Um, and you've been— correct me if I'm wrong here, but you've been, you've been in Austin 2 years?

Yes, 2 years. It's flown by.

2 years.

Yeah.

And yeah, so like we're gonna dive into like how can people listen to this, or recruitment founders, or even recruiters listen to this that like this proposition of coming to the US, um, what does that actually look like? And we can just get some real hard truths on that versus maybe what people think, uh, from what they see on, on LinkedIn and stuff. Why don't we just start with like, just curious to get your overall thoughts on this, how would you So if I'm a friend, I work in recruitment, I've always been in the UK, I'm sort of consuming content on LinkedIn, I see about this opportunity in the US, like how would you describe the opportunity for a recruiter in the US to like a friend in the pub? Like how would you— just curious to hear like how you would talk about it, how would you describe it?

Yeah, for sure. So I think firstly there's the obvious that the market size and opportunity is so much bigger in the US, so there's far more that you can go out and attack. But I think from a recruitment perspective specifically, it's far less competitive as well than the UK market. So there's so much more opportunity in that respect, plus higher fee sizes as well. So looking from the UK, everyone sees all this shiny, exciting, and wants to tap into the US market, but then it's just about, okay, how do we actually do this, and can we do it effectively from the UK, or does it make sense to get out here and actually get out to the States?

So how do you feel about this then? Oftentimes the way that I've described it to people is Yeah, it's just as hard, but the, like, the reward you get is like larger. Yeah, potentially. Yeah, not all the time, but if you're listening to this and you've done a certain market, you're a specialist in your area, it's just as hard. It's hard. However, in the US, if you did the same thing in terms of what you would get in return for that hard work, could potentially be 2x, 3x, 5x in terms of your average deal size.

Absolutely.

But it's just as hard.

Absolutely. It's just as hard. I mean, you're working— you're still working with people day in, day out and helping find them a job, which always can present its challenges. So that's always going to be there, but the upside's far stronger in my opinion. Um, hence why there's now a lot of Brits that are wanting to get out there and have a piece of it for themselves.

So why don't we— let's start with— because you, you did this for a good amount of time. Yeah. So let's just do this from the framing of I see the opportunity in the US, it matches up really nicely with the market I focus on. Yeah, I've done the research and I want to commit to building the US part of my business, or I'm even employed and there's a US opportunity. Yeah, like firstly, I don't know if you can comment on this or what you've seen, but like what's a realistic timeline of like going from I'm gonna start focusing on the US to start getting the rewards that you're hoping you're gonna get? Like, I know you've probably seen loads of different timelines, but what would you say is like a fair timeline to give yourself, which, which you've seen?

Yeah, for sure. So I think the US market is far more relationship-driven, it's less transactional. So you have to make sure that you're building the time to get to know your clients and their needs and wants, and you're matching the, the talent accordingly. So that takes time to do. Um, I think as well, if you're looking at physically getting out here, you need to have proof of concept, you know, as well. You need to build the market. It's expensive to set up and get established in the US, so there's certain performance targets I think that you need to hit to get there. But I think lastly, what's key is, are you willing to just put in the work to do the US market? If you're doing it from the UK, logistically you're looking at 5 to 8 hours in time difference, so You need to be hardworking and not be afraid to do that.

So I've heard all different, like, rough timelines, experiences. But like, if I was to say to you, I'm going to give it a real go.

Yeah.

Over the next 6 months.

Yeah.

And then I'm going to decide if I want to continue investing in that. Like, how would you feel about that? Do you think that's— I know we like— there isn't just going to be one answer to this.

Yeah.

But like, from what you see in the conversations that you've had, like, what is like not long enough? What do we think?

Yeah, I think it firstly depends on the market that you're in as well, and if you're in the right space, you've got the right person leading it and building it out, that's always going to be the key part. I think you can make a real impact, I'd say after 1 to 2 years is the timeline that I'd allow. A lot of people just rush and want to get into the US market and want to see the immediate return, but it doesn't necessarily work that way. So you have to give it enough of a run rate, really.

Okay, nice. Yes, 1 to 2 years.

Yeah.

What would you say are, are the main challenges of doing it from the UK? The, like, personal impact, like, you went through that. It's like, how would you— because I, I speak to a lot of— there's more and more firm— there's more and more agencies now that just do the US from the UK, like, that, that's, that's their game plan. And like, yeah, and so then that's what it is, like, the expectations are, if you join my business, you're starting at 12, you're starting at 11 or whatever, and you'll work till 8, but then you might have to take some calls on an odd occasion late in the evening.

Yeah.

And if, if I know that that's the expectation going in, then I guess that's fine, right? That's what I'm signing myself up for. But like, what would you say are the, the main challenges with it? Like, how, how did you find it? Is it the sacrifice of the personal life?

For sure. I mean, I did it myself for 3 years, so you absolutely can do it. But I think it's more about how sustainable is that for your team, you know. From a business perspective, it makes sense. Salaries are lower in the UK fees are higher in the US. So from a business perspective, it's great. But if you're looking even from a timeline perspective, if you're in your early to late 20s, you don't mind, you're building your career, you don't mind the late nights, the calls at 10, 11, 12 at night to kind of, you know, get yourself off the ground building a new market. But long term, you want to be hiring people that's going to stay with your business for the long term. If you're looking, you know, 10 years in their career, are they really going to be wanting to continue to do those hours. And I personally think there's a lot to be said for having feet on the ground in the US. You know, you're integrated in the culture, you're surrounded by, you know, US nationals. You've actually got a real feel for the market that you're operating within, along with the fact you're doing slightly more normal hours— as much as normal can be in recruitment. But it's— you can do it and it can make business sense in the short term, but long term, I don't know if it's the most effective strategy.

How did you do 3 years then? That's a long time. That's a long time. It is a long time. That's not like did it for a year. Like, 3 years is, is a long time. So yeah, I'm sure you had some weeks where you're like, oh my God, like, how am I doing this? This is the worst thing ever. Something like, this week was a good week. Like, did— like, what did like a good week look like for you? Like, what was the hour set? I don't know how— I'm sure you got better at managing the week.

Yeah. So I started at 10 in the morning, and then I'd be finishing at 10, 11 at night. But for me, I always knew I wanted to get to the US at some point. I studied here, I did a study abroad years ago and loved it, so it was always my ambition to get out here. So I knew that I had that longer-term aim in mind. So it was the kind of short-term sacrifice, the longer-term gain of building my market, proving myself in the space, then get my ticket out to you, America. Um, But I think, you know, if people don't necessarily want to move to America, because that isn't for everybody, I think you've got to question, are these employees really going to stay here and want to continue to do this?

So for you, it sounds like what really helped you keep going is that potential light at the end of the tunnel, or like potentially moving your life, career to— yeah, the US.

Yeah, for sure.

Okay, so if I'm just out of interest then, if I'm— I know it will be personally different for everyone, But if you was running a team in the UK serving the US, how would you set up their working week to like optimize for people actually staying there for a longer period out of interest? Like how would you set up the hours? I don't know, how would you think about if there was no chance of going to the US, the game plan was the UK and then maybe we'd go to the US once a quarter as a trip. How would you set it up?

Yeah, I think companies have to show a bit more flexibility if they're wanting their team to do the US market from London. So, you know, they're gonna be having to take, you know, late calls and meetings. Maybe if you say, right, you know, if you were to achieve X amount of interviews this week, you can have a half day Friday because we know that you've already been, you know, working, um, you know, long hours all throughout the week, providing they're going above and beyond from a performance perspective. So I think it's about how you can show flexibility that isn't going to hinder performance as well is going to be key. I think maybe a slightly more flexible start in the morning. You know, the realities are if they're starting at 10 AM UK time, you know, it's still very much early hours in the States. So it's companies, I think, willing to show more flexibility, and then ultimately, you know, the numbers should speak for them, for themselves, ultimately.

Yeah, okay, fair. Because I know, again, like, I feel like if you set the expectation for someone and they can see the opportunity in terms of like the reward they can get, yeah, some people, they'll be fine with it, right? And what I do often find with companies that their plan is to mainly stay UK-based, yeah, is that they'll make sure that, like I said, they'll go to their state or where they focus like at least once per quarter. They'll make sure that they're intentional about the trips that they make to the US. Yeah, because people that have spoken to it, it just makes it a lot easier when you've, you've been here. You've, you're like going to the coffee shops that you're speaking to people about in terms of like the local area and you understand it, right? So I think if you are playing that game you've got to make the intentional effort and the investment to actually come out here, get in front of people. And I've seen that, well, from people, what they've said, that that's had a big impact.

Definitely. And it's understanding as well. So maybe your clients are based in Boston or Austin, for example. Can you talk about the things that are going on in the city? So in Austin, for example, it's huge for college football, and there's games happening as well this weekend, actually on Saturday, that we'll be going to. Um, but can you talk about that, you know, with your candidates and clients? Like, how can you build rapport, because I think now the market's been far tougher. It's so much more relationship-driven and people want to actually build a rapport with somebody and actually get to know them. And it's not just purely going into business. So if you can get out here and, you know, see what the city has to offer, it's helpful from a business perspective too.

Okay. How about then? Obviously you went through this. I don't know how much— I'm assuming you got a good amount of support on it, but I don't know how involved you were. Anything to share on like how difficult was it to get the US, like the legalities around the US, becoming a US entity? Because obviously you've now done that with your business.

Yeah.

Like how was that difficult? What was the timeline? Just tell us a bit about your experience of that.

For sure. I think any UK business leader that's come out to the US will probably get a few gray hairs in the process. It's pretty stressful. But I mean, JailPro, we have, we're part of a wider group with investment backing and they were incredible. With getting us out here. And there's lots of different routes to come to the US. For us, it was proof of concept, so over 70% of our trade was across the US market. So, um, we went down the E-1 route, for example. Other businesses have to show significant investment in the likes of getting an office or, um, you know, other things like that to be able to set up over here.

So that'd be the E-2, right?

Yeah. So I think businesses need to you know, be willing to put the investment in that it's going to take if they actually want to get up and set up here. It seems shiny and exciting coming out to the US, but the costs are significant. So, um, you know, you need good backing behind you, that's for sure. And yeah, we were fortunate with, with our setup.

And how long, um, how long was like the timeline from like starting the pro— I know it varies, but what was your experience of like how long it took?

Yeah, so we started Gel Pro February 2022. By the September I was out here, and then we also brought out Josie Fraser as well from the UK. So there was two of us out here before the end of the year. So ours was pretty quick.

And what's like the— because the main visa piece I've heard is the E-2 piece.

Yes.

What's the like at a high level? This isn't a law podcast, obviously, but what was like the basic understanding? Like E-1, how is that different? So you're saying if you're showcasing that a lot of your revenue is contributing to the US economy, so it's a different visa, but what are the main benefits to that?

Yes, so we— it was very— it's a very black and white approach because you're showing your trades and how it's US-focused, whereas with the E-2 it's more about a business willing to show the investment in setting up in America and also having enough qualified people as well that would warrant them, you know, coming out here. Because I've seen more visas get denied recently, um, whether that be people sending out, you know, less experienced staff or you know, they're seen as a non-essential employee to be stateside. So I think you definitely need to be thorough because, yeah, there's a lot of stress that goes into that. Um, okay, that's for sure.

So why don't we talk about then what has been like your experience of— and from what you hear from other recruitment founders and businesses, what would you say have been like the main big wins, positives of actually having feet on the ground here like what has that been, what has that experience been like for you? And then what have you continued to find from your conversations with recruitment companies that actually then get here, they start building a team, what have been the main benefits that you've experienced?

Yeah, for sure. For us, it's been a game changer being out here from a business perspective, but also personally as well. So business-wise, we obviously chose Austin because we cover the US market as a whole, so we can work West Coast and East Coast, being on Central Time Zone, which has been amazing. Um, obviously you have the ability to meet with clients in person as well and actually build on the relationships, um, further, which has been key. Being on the same time zone, it's an obvious one, but for me personally as well has been, you know, huge. And then also the ability to hire US nationals into our team, and I think that's key for UK firms when they're setting up in the US. A lot of businesses, you know, bring over some of their UK team, which is great, particularly if it's their top performers. But you can't just try and replicate the UK side of the business in the US. I think it's really important that you're coming to the US, you need to hire US nationals, um, who can bring a new, you know, perspective and layer to the company as well.

So have you got any stories of like, or experiences where maybe when— maybe more like when you was employed where you was really trying to get in with clients or knocking on the door, um, maybe had limited success or it was, it was a challenge, but then you then were over in the country, you then got an opportunity to meet them and then things like excelled from there. I don't know, I'm sure you've— have you experienced that or—

yeah, for sure. I think it's just, you know, the world's changed now where it's obviously all Zoom and Teams and that's great to a point, but sitting down, grabbing a meeting room, grabbing a coffee, whatever it might be, seeing the offices in the space. You know, for us, we can better position businesses from a rec direct standpoint when we're speaking with candidates. We've gone into the office, we've met the team, we've looked at the hiring managers, you know, in the eyes and got a sense of who they are and, you know, what they're all about. So that's been critical. And then also turning around relationships that maybe have been, you know, slightly more challenging as well. Um, you know, getting to know one another and the plans and the and elaborating on our story, um, has been really helpful.

Yeah, because I have heard that from quite a few people. Yeah, where like, yeah, sometimes it's been tough. You could— yeah, like some people are good at building relationships through a screen, some people aren't. But I've just heard it time and time again where they've gone over, they've got those coffees in, and then it's just like really just enabled them just to take that relationship to the next stage or just build on it where they go, you know what, I'm going to give Sophie an opportunity, or yeah, like I'm going to give you these roles, or So yeah, I think, yeah, you've got to really think about that. And I do think that's got to be part of the strategy if like you're still in that process of coming over here. It can be lengthy. I think you've also got to be prepared to invest in coming over here, getting in front of people, because I think that will also enable you to just accelerate things or just get things through that might be challenging when you're doing it from the UK.

Definitely.

So what specifically UK firms to the US then? Like, what has been the most common play that you've seen then? So has it typically been bringing over maybe if there's more than one founder, one of the founders come over here, it works for their lifestyle and they're launching an office, or has it also been a top performer, top biller, whatever, that they're then back to come over to the UK, like, what, to the US? What has been the most common play that you've seen? Has it been that?

For sure, for sure. People, well, US leaders, UK leaders bringing over some of their top performers who've had proven success. Maybe they've trained, managed a team, and really trying to replicate what they've done in the UK over in the US. And even if I look at us internally at JL Pro, that's what, that's what we did. So I brought Josie out here a month after me, and that's been critical to our success and growth. I mean, if anyone's, you Yeah, she's awesome on a more informal level, but just in terms of, you know, being the top performer, she has managed a team, you know, she's the type of culture that we want to create in America. And the first few hires are really key, 'cause that's tough. You're coming out here, you know, you might not know anybody, you're in a new space, and you're really wanting to make an impact. So the first few hires that you bring in are key, because the costs are higher too.

And would you typically, you mentioned it earlier, proof of concept.

Yeah.

How do you feel about that? So like, before we maybe make that investment? Like, what, what does that— and again, it will vary, but like when you say proof of concept, like what does that mean? Is it that I can show that over the last 12 months we've done X number of deals? We've got— I don't know, like how do you think about that when we think about proof of concept?

Yeah, for sure. So somebody that's consistently billed, um, somebody that's proven that they've gone out and, you know, won new business, and if it's a 360 model, also executed on that as well from a candidate perspective, I think it's key to bring somebody in that's had some sort of managerial responsibility because the intention, I'd assume, is if you're bringing somebody over from the UK, you want to help build and grow a team around that person. So, they need to have the qualities and traits that you can rely on them as well whilst you're also building an office and probably billing yourself.

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Yeah.

Obviously want to make sure that we've picked the right person to lead it.

Yeah.

Where, where have you seen companies like fall short or struggle or make mistakes at this stage then?

Like, where I see it is a lot of the UK firms thinking that they can just completely replicate the UK model in the US when it's a very, very different structure. Um, for example, and if you're hiring from, you know, an experience perspective, a lot of the US firms have a split desk model, whereas the UK typically is 360. The UK market's far more competitive and saturated, so it's slightly more KPI-driven. Um, and sometimes bringing over the exact model isn't suitable to the US. So I think you need to be able to adapt slightly more, also realizing that people in the US, other things are also important to them. So you, likes of healthcare for example, that isn't— that's a whole other thing, um, in the US. And looking at, you know, wider benefits that they can offer their team as well, and different sort of incentive structures. So I think not just taking a very black and white approach and thinking it's a one-size-fits-all, I think they need to learn to adapt slightly.

Yeah, well, I definitely want to go into like— I definitely want to touch on your experience on what are the like compelling reasons why a US national would like join a staffing firm. Yeah, it'd be interesting. But let me ask you this then, just curious. Obviously you're part of a wider group, you go into the UK office Yeah. If I was to walk into JL Pro UK.

Yeah.

And then walk into your Austin office like I did today, what do you think would be some of the main differences that would make it, the main culture? I don't know, what would I maybe pick up on or what would maybe be slightly different, do you think?

Good question. I like that question. Well, obviously accents. Accents are slightly different. Yeah. Less Georgia, but Georgie accent. I think, you know, we— to my point, you know, there's still— we want to create a similar sort of culture and environment and feel, but I think particularly in the US, um, for us, I think it's even more relationship-driven with how we're approaching our candidates and clients, um, and slightly less volume-focused in that respect.

So maybe So it sounds like then if I walk into your US office versus the UK, I might hear less people like doing the reps and on— not on the phone as much, but I guess what you're saying is like you mentioned KPIs earlier, so maybe on the, on the US side it is going to be a bit less like input focused, or is that unfair?

I don't know. Well, you still need to still obviously the KPI element, it's You know, you still, someone said to me once, if you want to make a perfect cake, there's certain ingredients you need to add to the cake to get the output. And it's still the same, you know, you still need to have a certain amount of interviews or calls to get the results that you, that you need. But I think this style to recruitment is slightly different, and the perception of recruitment is different in the US than it is in the UK. Sales and recruitment in general is seen as more of a respectable career, I think, in America than it is in the UK. Um, So it is technically less salesy over here than it is in the UK as well.

Okay. All right, understood. Fair. Why don't we get into them? We've landed, we've picked the right person.

Yeah.

We understand and respect that we can't just replicate the culture and everything that we have in the UK. But as you said, and I've seen this from the UK firms that I know that have made it a success in the US, is they've really committed to building a US team, right, versus just trying to ship all of their UK recruiters over.

Yeah.

What— obviously you've only done this market in terms of the US piece, so like, what would you say— let me ask you this— if, if you was headhunting, uh, a US national recruiter, what have you found time and time again that they care most about when it comes to being pulled towards an opportunity? Like, what is it that you typically sell that you feel like really motivates these people to go, you know, Sophie, I'm happy to have a conversation? Or what do these people really care about when it comes to being employed, being open to an opposition, a position with a staffing firm? Like, what, yeah, what comes out on top more often than not that they really care about?

Do you know what, Austin in particular, so obviously we've got an office here, people— that's something that I've noticed that's really important here is some sort of— and this is a recruitment— you say this is some recruitment leaders and they're thinking absolutely not, but it's just a matter of fact. Austin's very outdoorsy, it's quite, you know, there's a great lifestyle here. So a lot of recruiters want some sort of flexibility or, you know, something like that compared to the UK where I think people, um, maybe have slightly different motivations in some respects. So as a business, I think a lot of UK firms have really struggled coming out here.

What are you saying, they want to work less hours?

No, well, people typically make more money, right, in the US. The salaries are a lot higher, so there's other jobs that they could do, right, uh, where they could also earn, you know, great money in some sort of sales environment. So I think it's about how can you incentivize your team the right way while also having some layers of flexibility.

So flexibility they care about.

I think if you're hiring the right person, they're going to be money motivated as well. So they're looking at commission structures, not just looking at base salaries, but what's OTE and how can I get my total earnings, you know, higher as well. Um, I think, you know, another aspect is the market that you're operating in. Is it a lucrative market? Is it an industry that's growing that's going to continue to get investment as well? And so these are key things that I'd be hearing and learning more. And I think also something else to look at is, you know, what's the average performance like in these, you know, businesses? What does good look like, and is it a high-performing environment that I'd want to join.

What about incentives? Do they care about going to—

maybe not Ibiza, but scrolling on LinkedIn and seeing another—

yeah, recruiters, do they— yeah, US recruiters care about that? Is that something that they speak to you about? Is it not?

Yes, and of course there's still obviously the trips that, you know, everyone will probably see on recruitment, but I think they'd prefer a half afternoon off if they've really, you know, gone above target than No, that's a good insight. Yeah.

What about— obviously you hear it a lot, right? So what about, like, do they really care about progression and where they see their future in that business, or is it more about the earning potential that they care about? Is that something that comes up a lot?

For sure, for sure. And I think, you know, Austin isn't cheap, or elsewhere, you know, in another state. If you look at New York, for example, or California, and they're not places to live, so of course earnings is always going to be a key, key question. Um, Progression's key. That's one of the key reasons from a rec-to-rec perspective where we see people wanting to leave. They've kind of hit a wall and they don't really know what next looks like for them, or they're pushed down the managerial route and they actually don't want to be a manager. They'd prefer just to get their head down and focus on their own billings and earn more money, you know, themselves as well. So there's a number of different reasons, I'd say.

Okay, yeah, I feel like that, that's also fairly similar, um, yeah, in the UK. Okay, and then what about in terms of, um, like salaries and stuff? Like, what— obviously you do the senior end, you don't do a lot entry level. Like, if I'm— yeah, like if I'm hiring a senior recruiter, let's just start— let's just do— I know it'll vary, but like 2 years of experience.

Yeah.

What are we saying? Like, what would— like, what would be— we can go for Austin.

Yeah.

What would be like not competitive and what would be competitive?

Well, yes, there's 2 years experience, you're probably looking at 60 to 75 is a loose bracket from a base perspective. Um, but you have graduates coming in at 50K, so that's another area where I think UK firms can struggle when they come to the States because it seems shinier and exciting, and it is, but the costs are so much higher, um, in hiring, you know, entry-level people even, um, along with slightly more experienced hires as well. So they have to be willing to put the investment in and wait for the return, um, on getting the new starters up and running.

And then what are we saying, like principal level? So like maybe double 2 years, 4 years principal level, what we're saying, like, yes, like again, bandings maybe, like what would be uncompetitive, what would be competitive?

So I think, you know, it's part of it is dependent on somebody's billings as well. Often there isn't a one-size-fits-all approach to that, plus commission structures, whether there's higher thresholds, whether there's, you know, make commission from day one, or draw structures, which are huge for US firms. Um, but loosely at principal consultant level, say around the 3 years plus, I'd say you're looking at $70K plus.

$70K minimum?

Yeah.

What, you just said something? Draw? What's that?

Draw?

What's that?

Yeah, some of the US firms have that structure. So basically you have to cover your own salary monthly before you'll start seeing commission. So, and if you don't make a deal one month, then your draw could double the following month. So that's when it's either recoverable or non-recoverable. Um, so you can get yourself in a sticky situation if you don't bill.

Wait, so, so basically, so if I'm on a $70K base salary, is that then worked out monthly what I need to bill at least?

Yeah.

So let's just say it's $10K.

Yeah.

And that's it. If so, if I bill over $10K, I'm getting paid commission, but if I don't then I'm—

so it'd be 70 divided by 12, whatever your monthly threshold would be, and you'd have to hit that number before you start seeing commission, right? So then in that structure, you'd really want your draw to be as low as possible, so then you can start making commission quicker. But the UK firms typically don't operate on that structure.

No. And then what about— what have you seen? Like, this is helpful for people, may vary, may not. What we're saying on like— because I'm sure you'll sell against this in certain roles— what's like a good commission structure versus a shit one? Yeah, what we're saying.

So I'd say a good commission structure is one that incentivizes top performers, not average performers. So that's what I think is really going to be key. If you're going— if you want to attract the right talent, you need to be paying out at a high bracket if they're going to be doing, you know, upwards of $100K months, for example. I think you'll attract average people if I think you're giving commission out from dollar one because, you know, they could get away with doing $10K a month and still make, you know, a few thousand off the back of that. Um, so if you want great people, be willing to pay higher tiers for the more work that they're doing.

And what, like, what have you typically seen that works with that then? Like, yeah, over $50K they get 40%, or I don't know how— what have you— what's been the most common thing? Yeah, yeah.

So I've seen commission tiers all the way up to 60% really from a payout perspective, but that's you know, you're a top, top million dollar biller. Um, so it really depends, you know, according to the business. Often what's quite nice is a quarterly structure. So you'll say, okay, billings are reflected— we'll look at your billings on a quarterly basis, but we'll pay out monthly. So you're still getting the commission coming through, but what it— what it avoids is some people that are trying to get, you know, huge— one huge month, and then they blank a month and then another huge month, and they blank a month, which is awful from a business owner's perspective because your P&L will be skewed.

Um, right, let's just go through that because I think this would be helpful. Yeah, just so let's just do it from the framing of— because the reason why I want to make sure that people understand this is because I've interviewed people on here, and you'll see people online, and you'll see it, and they'll say we've got the best commission structure in the industry.

I hear that quite a lot. There's a lot of best commissions.

That's what I mean. So like, let's just like, yeah, So let's just do this from the framing. I do like the quarterly. I think that's smart.

Yeah.

Because it avoids, like you just said, what you just said, um, we just mentioned. So why don't we just do it like, if from all of your experience, all that you've seen, all of the great commission structures that you've seen.

Yeah.

If we wanted to do— anyone listening here wanted to implement just a solid commission structure that you would be like, you know what, that's, that's good, like that's a good solid commission structure. There might be some companies that might do it better, but that's like a solid place to start, or like you're going to find it hard to beat it. What would that look like? Let's just break that down.

Sure. So I would be— make it reflective of a quarterly billing cycle, life cycle, um, because I think it's more reflective of someone's total billings in a, you know, yearly time frame as well. I'd, you know, there'd be a certain threshold that they'd need to hit before they start making commission. That'd help, you know, a business owner help cover initial costs, particularly if they're in the US where things are far more expensive. And then after that, have a tiered structure off the back of that so the team are incentivized. So maybe the first deal that they do, they're getting paid out at 20%. Then from maybe deal 3, they're getting 30%, and it could even go all the way up to 50%, 60% if they're going to be a top, top performer. Because then you create the right environment, you have team, you know, members saying, right, my next deal that I'm going to do, I could get this in at 50% payout. And from a business perspective, you know, they should want their team to have great earnings if they're putting up really strong numbers and being a top performer. Um, okay, you know, internally in the business.

Yeah, that makes sense.

But then I think the other aspect to it that's really important is, you know, you want your team to see the upside of all their hard work quickly. So I always think, you know, pay as soon as the business gets paid. They— the team members can get paid the following month as well. I've seen some firms where they wait for for, um, you know, commissions to be paid out until rebate ends or things like that, right? Um, I personally think, you know, you want the team to be incentivized, earning great money, and see the upside for the work that they're doing, right?

So just so I understand, yep, so it's done quarterly.

Yep.

I don't know how you do it in your business.

This is how we do it.

All right, okay. So I was gonna make sure we understand because I feel like I don't fully understand it and people listening might not. So, so let— okay, so quarterly I have a— so So my, my commission is done quarterly.

Yeah.

So you're saying— so let's just say, like, if I bill $100K in a quarter.

Yeah.

When I hit certain thresholds, I'll get more of a percentage.

Yeah.

But I'm just trying to make sure— how is it paid monthly then?

So say, for example, month 2, they've done $40,000 over the quarter. Or in the month. So, yes, you've— so we've got you— the business will be broken down quarterly, um, reflected in 3-month periods. Yeah. So month 2, they've already done $40,000 that they should get commission paid out on. You'll obviously invoice a client that month. Should everything get paid on time, the team members would get paid whatever they would do from that $40K the following month, right? Then say in month 3, um, they do another $40,000.

So in the quarter, I've done $80K.

They've done $80K. So then the next month, they've already hit the next commission bracket. It's, say, 35%. So then they get paid out for the other portion of that 40K at the 35%. So you can still pay it out regularly, um, but they just get higher and higher, higher payout percentages as the month—

as the quarter goes on. Okay, right, understood. And then I know it will vary, but let's just wrap this bit up. What would you say is like a competitive, fair base, like, start, um, threshold? Like, in terms of, like, do you often see companies say anything from 10K you're going to start getting commission from? I don't know, what have you typically seen?

So it varies. Sometimes it's a flat figure like 5, 10K, um, sometimes people make it reflective of someone's salary.

Okay.

Um, so say if someone's on a slightly higher salary, they might, they might say, okay, you need to cover your monthly salary and then you start making commission. Um, sometimes if it's reflective over a quarter, it could be double your salary, um, for that 3-month period, and then you start making commission. So it can depend. Often the higher the threshold, then the higher the commission percentages will be, because companies will want to attract people with a higher percentage if their threshold is going to be higher.

All right, okay, cool. Good luck.

Absolutely.

Commission masterclass.

I don't know about that.

No, but that, that again, like, if we want to be successful at growing our US business, this is key. And like, completely, yeah. Like, there might be like— she's obviously— again, from the position that you see it, it's really helpful to know like what actually is a good commission structure. Um, okay, so let's just dive into a bit then. So you mentioned earlier in terms of the nuances of if I'm UK-based going to the US and I'm now trying to grow my US business and I need to grow the US nationals. Yeah, that means— correct me if I'm wrong here— but I might find myself taking US nationals from US staffing firms where then they haven't built their careers on 360.

Yeah.

In a 360 environment or whatever. So what do we have to, let me ask you this, from the firms that you support, the UK that then go into the US, does the 360 model work? What are we saying? Like what have you often seen?

Yeah, if it's perm, definitely. If it's contract, usually it's split desk. So you'll have the BD team and then the delivery team. Often what we see is, you know, maybe it's they're launching in a market where there isn't, you know, a lot of recruitment businesses that they'd want to pull talent from. The companies are gonna have to have some sort of flexibility. Often I see UK firms slightly more open to taking someone who's done the business development and sales side and training them on the candidate piece, less so from the candidate piece going to business development, 'cause that's the harder side. Of the deal.

And like, how is it just being really— like, if I'm hiring US nationals from US, um, firms, yeah, do I just have to do a good job of like really getting into, okay, they've got 4 years experience, but like how much of that was just doing the delivery side or doing the account management side? Do I just have to be really good at like making sure I understand that? Yeah, in the interview process, all these things, because I feel like I've definitely heard people like get cut short on that.

For sure, or using great rec direct too.

Yeah, oh yeah, of course.

Um, okay, sure. But something that we hear a lot is people say they do business development, but maybe they've worked for a large staffing firm and they've actually done account management, and they don't actually know how you go out and win new business. So it's like really digging into that piece. Can you go out and win business, build relationships, and not just be handed—

just get real life examples. Okay. Yeah, right, good. What about— so I've often heard this as well, I don't know what you've seen— what about in terms of the strategy of how they actually approach the market? Because I've heard that can sometimes be different compared to US firms as well, in terms of US firms typically have been like more generalist versus like niche. Yeah, is that fair? Is that like accurate? Or— because in the UK, because it is so competitive, one of the competitive edges you can give yourself is like, all I do is speak to software engineers that do this particular language, and that can become a competitive advantage. Yeah, like, how does that play out in the, in the US in terms of like US staffing firms? Are they, are they more generalist typically, or no?

Yes and no. I think it depends on the business and their size and structure. Like, even some of the, um, UK firms that will come out to the US, maybe they've got a team of 2 to 3 to start with, so they have to be slightly more generalist and broad in their approach to start. But as they scale, the best way I think is for each of their team members to have that niche focus. They can build their network, you know, push the referral model, get access to the candidates that companies would want to pay fees for. Um, and even for us internally, we're structured that way. Everybody in our business is specialized in a particular market because that's when you can really build your network and I think be more value-adding than just, you know, saying you do everything at a very headline level but don't actually truly know the space.

We'll get back to the episode in just 1 minute. But today I'm excited to talk to you about one of our partners, Firefish, the recruitment CRM that accelerates data-driven growth. The problem with most recruitment CRMs is that they are just a database of records, meaning they become just one of the many tools that recruiters use every day. Like all systems, the records are only as good as the data being captured. Our sponsors Firefish know that for agencies to win faster, data needs to be at the heart of their business, making your CRM the single source of truth. With over 10,000 records created and updated every day and 85% of placements from existing candidates, Firefish enables recruiters to enrich and engage their data, equipping you with real-time insights needed to win faster. To learn more about Firefish and take advantage of an exclusive Recruitment Mentors podcast offer, make sure you click the link in the show notes. And mention the Recruitment Mentors podcast when speaking to the Firefish team. What would you like— I've met a couple of people this week so far, and you know, we're talking about it here, and I've heard it a few times where they're finding it really fucking hard to like hire good people. Like, what springs to mind for you? Like, where would you— where would your mind go on like what maybe they're not doing a good job of, or maybe what they need to think about? Because I've heard that a lot. Like, I met two guys last night where they're like, we've been interviewing a lot and yeah, we're not— we haven't been impressed.

Yeah.

Like, I don't know, where does your mind go there out of it? Because I've heard it a lot. Yeah, it's been tough for a lot of, um, a lot of people I've been met, like, UK and moved here.

So I think firstly I would ask why. What's not been hitting the mark? Is it their billings? And— or is it the fact that they maybe have been slightly more generalist in their focus, or culture-wise, or a lot of the time senior people then want to step out of production and purely do management, which are the really hard roles to fill right now from a, you know, rec-to-rec perspective. So why, what's not been sticking? But then I think, you know, they also need to look internally as well. It's, you know, the candidates might not be right, but then it's also about taking a step back and thinking, well, are we offering the best packages, you know, internally? Are we paying competitive um, you know, base salaries, compensation, great incentives. For UK firms coming out, healthcare coverage, 401(k). And is there anything else that they could be offering the team more? Are they selling the right story? Are they having case studies of their top performers and kind of letting new people that are interviewing help visualize, this is what I could achieve in this business by having that case study. So I think it's about evaluating their process is that being run as effectively as it, you know, could be? Are we operating the right way in how we're incentivizing the team? And then also looking at how they're getting talent, you know. Is it—

it's on both sides.

Yeah, exactly.

Internally. And then, yeah, also, like, are you really clear on, like, the type of person that you want and stuff like that?

For sure.

Um, okay, so anything else to share in terms of, like— because you've been here, like, a good amount of time now. Like, what have you often found in, like, UK firms that have come here that have really struggled? Like, is there anything else that maybe you've seen play out, or common mistakes?

Yeah, I think thinking that the UK model can just be replicated in Austin, being— or wherever it might be in the US— being one of them. Um, not being willing to actually make the full investment, you know, maybe they've already got an expensive office and move people over. Visas, you know, and the costs attached to that are expensive. Um, so actually being willing to invest in the team in a market that has been really challenging the last year, I think, is key. If you're going to do the US market, you have to really attack it and be wanting to scale and build something impactful. Um, and then really doing a deep dive on the types of people that they're wanting to hire. What's the flexibility? Are they replicating a 360 model? Are they open to changing that? And just thinking about how they're actually going to scale effectively as well.

Yeah, fair. Like, just, you can't half-ass it, basically.

And location, I think, too. You know, a lot of British businesses, you know, I think, think of New York or California as a place that they want to set up. I did as well, you know, being in the UK, going to New York or California sounded great and exciting, and, you know, the buzz of the city.

But then why did you pick Austin then? Yeah, because that was just one of the main bits in terms of like your experience or expertise on like states from your own journey and people that you've spoken to.

Yeah, so our investors were amazing and they said, look, where do you want to go and build in the US? If it makes business sense, we'll back it. So I did a deep dive, a lot of phone calls, a lot of friends conversations, and we decided on Austin. Well, for a few reasons. I think, um, you can work West Coast, East Coast, really effectively, obviously, from, from being based in Austin. Great schools to hire from internally as well. A lot of people want to move here. Are you in a city where people actually want to be in? You know, we have people relocating from New York or California. Um, cost, you know, there's no state tax here. Same with Florida, another one that's booming at the moment, um, for that exact reason, whereas New York or California, it's pretty steep. Um, and then personally, you know, I think something that does get overlooked is when you're moving out here. You like have the business lens on and think, you know, we're going to be moving here and it's going to be great for the company. But then you also have to pick up your life and move, and it's a lot, you know. You have your friends and family back home. So is it a place that you like and want to be in? And I mean, yeah, I'm from Newcastle and it rains most of the year, so coming to Austin where it was sunny 320+ days a year was great. Outdoor city, lot to do. Um, and so I think you have to also think, where do you actually want to be? Because if you are happy and in a place where you can see yourself being in for the long term, um, it makes hiring and growing something a lot easier.

Yeah, no, I think— and like, how could I personally give myself a better chance of doing that? Like, was it just speaking to people? Was actually coming here and, yeah, being here for a good amount of time on like a holiday and experiencing it all? Like, how How did you approach that? Was it like just coming here and experiencing it all?

Yeah, so I spoke with a lot of people, um, and obviously from us, from a Rec2Rec side, I had the advantage of speaking with other leaders. How are you finding it? Um, you know, New York's hard to, from a retention perspective, to keep people because the costs are so high and salaries need to be higher. So, um, we had a lot of conversations with different people. Um, I came out to Austin and visited it, and like most people that come here, it's just got a great vibe about the place and absolutely loved it. Um, and then work-wise made a lot of sense. So yeah, here we are 2 years later.

I do think it's really important for people like you, like, um, you said earlier in terms of you're going to give yourself an advantage if you're in a state where people actually want to move to.

Completely.

If we're thinking about growing something in the US, whatever that looks like, if it's 10 people, if it's 20 people, yeah, you're going to give yourself an advantage if it's actually somewhere in, in America that people actively moving to. Yeah, because I think that that's something that in the couple of days that I've been here, it's very rare that you actually meet someone from Austin.

Oh, so rare. Yeah, everyone—

so many people have actually moved here, right? So when we think about growing our businesses and hiring, yeah, if you're already in a place where, yeah, people are actually moving, you're— it should be hopefully, and until, yeah, it gets a really bad brand or whatever, like it's an expanding town, it's like an Everest just a continuous growth of like a talent pool because people want to, want to move here completely.

I think the 3 hubs that seem to be booming right now are Austin, um, Tampa being another one, and Charlotte as well in North Carolina. I'm seeing that crop up a lot more.

Really?

Yeah.

And then, you know, when you say— you're gonna know this isn't a finance, finance podcast— but when you say there's no state tax, like, what, what does that actually mean? Yeah, in like, I don't know, UK terms, a lot— what does that actually mean?

Yeah, so Basically, at headline level, if I was in California or New York, for example, you could slash another 10 to 13% off my paycheck on an annual basis, um, just from a state tax perspective in terms of where you're based and located. So Texas doesn't have that, um, so for your earnings, you know, earnings-wise, it makes a pretty big difference. Same with Florida, which is why a lot of people are moving there too.

And then what about from, um, company level? Like in terms of like, do you get any— is that the same? Like in terms of obviously in the UK of like corporation tax and stuff like that?

I think so, I don't know.

This is the financial—

but like, yeah, I was gonna say our finance team.

You've explained that as an individual, yeah, the benefits that you get. So like you said, actually that could add up to a lot.

Yeah, for sure.

Having to pay out, right, in terms of what you, what you could be paying.

Yeah, even offices as well. I mean, they're not cheaper, but compared to, you know, other areas, you can get— you've seen our office is a great, you know, space and, um, you know, located downtown and a place where people actually want to work. You know, I think a lot of the UK firms now are pushing people to be in office, um, and you need to have an office that people actually want to come into and create a great space.

What about— I've seen someone about this recently in terms of I don't know what you think about this. Like, is Austin almost becoming, from a recruitment standpoint, like, if you move here, are you making it— we just spoke about the benefits, but are we— are you making it more difficult for yourself to hire recruiters because they're just— there's a lot more competition? I don't know, how do you think about that? Someone said that to me recently.

I mean, there's— I mean, there's a lot of businesses opening up here, that's for sure. Um, even in, uh, we're in an industrial, so there's always another British business popping up. Um, but I mean, comparatively the UK, there's still so much opportunity. So if someone was thinking about where they wanted to set up, I'd still completely back—

you don't think you're going to give yourself a real disadvantage in terms of like using that every time you interview someone, they're going to be interviewing at all like 4 other recruitment agencies at the same time? Because that, that's the challenge of London. I mean, it's the same in London, right? It's down to like, can you build a compelling story, the platform and everything that you can offer? But I don't know, like like we said, it's a big investment. So is investing in setting up in Austin also giving yourself— making it harder? I don't know.

I think comparatively to London, people would find it a lot easier to hire if it's for the right person here, from a, you know, everyone's interviewing everywhere perspective.

Fair. So what would be your sort of parting advice then for anyone that if you got to this point in the conversation, you're obviously interested in— let's do it from two perspectives. Yeah, like if you're interested in moving your career to the US. Yeah, like what would be your sort of like advice to a friend on what they should do, your sort of checklist on like, okay, if we don't have a criminal record, we've got a degree, all those bits.

Yeah.

And I'm— I've seriously considered where I want to go personally it makes sense for me, like, what would be your advice to me as like a friend? And like, how should I approach it? It should hopefully mean that I move here and I'm like, fucking hell, this is amazing.

Like, yeah, because yeah, you don't want to go back. Yeah, yeah. So my first bit of advice is, are you doing it with the right business? Because it's, as we mentioned, everyone's wanting to have their piece of the, the US and open and expand here. But what actually are the companies growth plans and where do you sit within that, and are they willing to put the investment in that it truly takes? So I think really understanding their story and where you sit within, that's really going to be key. That'll be my main piece of advice that I would share.

I mean, it all— that also like plays out in the UK, right? But I think even more so if you're moving your life to a different part of the world.

Yeah.

You, you want to try and do the best that you can to make sure that you've picked the right manager or you've picked the right business, as you said, because there will be times where it's hard, challenging personally. But if like work feels good and when you get to work you're engaged, you're motivated, it will make the personal stuff hopefully not feel as bad because that might take a bit of time to make friends or whatever. Yeah, but if when you do show up to work, you, like I said, you're engaged, that, that's hopefully going to massively help. So What, like, again, like, you, you do this, right? How can I— there's only so much you can do, but like, how can I really give myself the best chance of really knowing what I'm getting myself in for? Because there's only so much you can do, do you know what I mean? Like, is there any extra steps that you'd really recommend people to do that could hopefully give them more confidence that they're making the right decision on, on the business?

Yeah, so I'd sit down with your hiring manager, understand the story, the growth plans, where you sit within that. I also think as well, if you're going to uproot your life and move to the US, coming out and seeing, you know, the place that you could be living is going to be really, really important. Is this a place that you can really visualize yourself living? Because there are a lot of uncertainties. And even when you move out, I remember when I got off the plane, um, we were waiting on Josie's visa at that point. We didn't know if it was going to happen. It was about 8 o'clock at night, and everybody who's your support networks at home and asleep, just from a time zone perspective. And it's like, oh wow, okay, we're really doing this. Gotta find an apartment, get a mattress, get an office, all of that stuff, which is a lot. So you have to really, really want it. And if you're coming out here and are truly excited by the opportunity, you're confident you're with the right business that's going to back you, you've already had, you know, some sort of track record in the US and you're building your network here, um, it's an amazing thing to do. And, you know, even what I thought when I was, you know, coming out here, like, what an opportunity. You get to come and experience a new culture, um, you know, live in the— live in the US, um, and everything that has to offer. So what's the worst thing that can really, really happen?

Yeah, I think— yeah, I think the smart thing to do would be just don't get caught up in the work opportunity and just ask the work questions. Also try and speak to people about the personal side of it. Like, how have you found building your social network in this place? And like, ask those personal questions as well, because that, that's a big part of the equation.

Yeah. And I think that can get overlooked because everyone just has their business lens on, but it is a lot. Um, and are you bringing, you know, are team members coming out that you can, you know, gel well with? But you don't want your whole network just to be your work colleagues. You need to kind of push yourself outside of that too.

And on the flip side then, again, speaking to a fellow founder, you have your own business, what would be your advice to them in terms of having the best chance of building a successful US part of their business? What would be the sort of bits of advice?

Good question. So, for me, pick the right location in the right, you know, market area that makes sense for you as a business, have the investment behind you to scale effectively. Um, the first few hires that you're going to make are key. Um, so whoever you're either choosing to bring from the UK, make sure that's the person that want— that you back to create the culture and set the expectations that you want when building a new business. That's been huge for us. Um, when we've obviously scaled internally as well, um, set the expectations that you want you know, as a business, clean milestones and targets that you want to achieve, and have a hiring plan and strategy, and just don't try and wing it and, you know, hope for the best when you're out here, you know. Are you wanting to be strict with that 360 model? Are you open to hiring US nationals with different experience levels? Just really think about how you're going to scale and get set up to make sure that when, you know, the costs are higher, that you're in a good position to not be too scared by that.

No, yeah, I love that. I do think it always comes back to having the right people in the right seats. But yeah, your market strategy is right, location's right. I do think the biggest chance you can give yourself of making a success of all the investment you put in is the— that founding team, for sure. Like, that's got to be such a— if everything else is right you— yeah, even if it takes longer than you hope for, in the long term it's probably going to play out if you've got that right founding team. So I guess, yeah, really don't get complacent with that, or think, or get impatient, like, all right, let's just get it going, it's been long enough now, let's get over there. Really, yeah, I definitely— I think that's the thing that I'd really underline, is making sure that you have those right people.

Yeah.

Um, yeah, I feel like so much of it rides on that.

For sure. And how I like to think of it is, if you had to go out the office for the day for whatever reason— something personal comes up, you can't be there— do you trust that person to run the day start to end, you know, effectively, and set the standard for the business and how you want to scale things? And I think if you're confident in that, it's a good sign.

Love it. Thank you so much. So many great things there for people to learn from. And, uh, thanks so much for joining me.

Cool, thanks for having me.