Ephram Stephenson - Backpacker to multi-agency owner, how to scale exit and use technology to thrive

Welcome to the Recruitment Rollercoaster Podcast. My name's Hishem Azzouz. Today I'm joined by Ephraim Stevenson, who is based over in Melbourne, Australia, has worked in the recruitment industry for coming up to 19 years. In that time has successfully built 6 recruitment businesses. In 2019, he actually exited 5 of the recruitment brands. He was involved in. And for the last year, Efraim's been building a business called Kona Co, which is an executive search firm across 10 different verticals. Efraim, welcome to the podcast.

Thank you very much. It's a pleasure. Good to be here.

So obviously, as I just said, Efraim's over in Melbourne, who obviously, unfortunately, has been put in lockdown over the last 48 hours. And Look, there may be some connection issues, there shouldn't, but bear with and I'm confident that we'll have a really good conversation. But look, where I always like to start and where I always like to sort of start this conversation, Efraim, is how did you end up in the world of recruitment? Let's start there.

Excellent, good question, mate. Yeah, I guess like a lot of English backpackers, I'd never worked in recruitment before. I came across to Australia in 2001 And my first job was actually working on the Sydney Harbour Bridge doing the bridge climbs. And from there, basically, I got a job in, which was advertising sales. And my boss at the time made a couple of phone calls and I ended up getting my first gig in recruitment, which was actually a telemarketer, it was an appointment setter for a company called Atomic Consulting. And basically, I was being paid $13.50 an hour. They were going to give me 1% of everything that I build revenue-wise. And I did that for about 2 weeks and I was appointment setting for obviously their consultants to go out and potentially bring the work back in. Long story short was they were coming back and saying that it wasn't really gelling or that the leads weren't warm enough. I begged to differ and approached the directors and asked me if they were willing to give me a go at doing recruitment. They all say, well, at that time it was purely commission only. And yeah, luckily for me, I kind of fell into construction. My background, my family's in construction. And from there, basically, you know, I was a top biller from the first month, for the, I guess, the 20 months that I was there until I actually went out on my own, set up my own business. So I was 24 when I got into recruitment and then 26 when I set up my own agency.

Okay. Why do you think you was able to hit the ground running?

I think at the time, Hayes, there was a recruiter called Luke, Louise Clinton, who was Haysi's, I guess, number one construction recruiter, property recruiter, very dominant within the Sydney market. And look, there was just a real niche there. And ultimately, you know, property, construction, there was a number of roles obviously that were becoming available across multiple sectors. And it actually gave me a free-for-all really to pick and choose which clients I wanted to recruit for, which industries I wanted to recruit for. You know, that backed with, as I mentioned, obviously, you know, my dad was in construction, granddad was in construction, construction, so I come from 3 generations of builders. And, you know, the old saying goes in recruitment, you've got to be passionate about what you do and what you recruit for. And fortunately for me, it kind of just stuck, you know, whether or not I'd say recruitment is in my DNA, but I eat, sleep, breathe recruitment, mate. So, yeah.

Okay. All right. Let's just quickly, because I mean, what did the Australian recruitment landscape look like in 2001 compared to obviously now? What did it look like?

Well, I guess if you look back to that time, 2003, 2004 was pretty much when most of the mid-sized boutiques kind of came to fruition. You know, the likes of now Careeres launching over in Australia. You know, the guys obviously at Design and Build, you know, obviously launched at a similar time to Design and Construct, which was my agency. You had Constructive Recruitment. So there was all these kind of medium-sized specialist agencies popping up, and there was actually plenty of work for all of us to go around. And I guess at the time, you know, for the first 3 years of the business, everything was smooth sailing. We doubled our revenue year in, year out. And then obviously, we decided obviously to double the size of the business, and then the GFC kind of came around and hit. But yet, ultimately, there was so much opportunity out there, and speaking to clients, recruitment is obviously a relationship-based business, And back then, as I say, Hayes definitely had the majority of the lion's share. So it was actually quite easy to go in and negotiate obviously better rates than what Hayes were obviously charging. And yeah, really kind of dominate that market.

So just, yeah, okay, interesting. All right. So let's just unpack this, Efraim. I want to make sure that sort of we give good context here because you're clearly someone that's, I mean, yeah, you've been involved in different businesses and these types of things. So I just want to make sure sort of we sort of understand the journey. So for the last year, you've been focusing on Kona Co, right? So we'll get to that. But before that, obviously the majority of your time in this industry has been obviously, yeah, when you set up your own agency, which you said the first— what was that? Design and Construct, you said, right?

That's it, yeah.

Yeah. And then so just quickly then, so— and that was over a 15-year period, right?

That's correct.

But within that time, you started 4 other recruitment businesses.

I did, mate, yeah. So I'll take you back, literally right back to the beginning. So I started my, basically my career in recruitment, commission only, and did that for 2 years. As I say, if they, the company I was working for were just growing too quickly, too soon, and the commission-only model just wasn't a viable model for them or any business, I guess, long term. And if they'd have been paying my commission on time, I'd have probably still been there. I was on a very good wicket, I was being well looked after. But the reality of it was that when I I joined the business, they had about 5 staff. When I left, they had about 25. I had 7 direct reports coming into me. The construction property arm was actually their largest revenue stream. So obviously when I left, there was no— I had no employment contract, I had no restriction of trade, which is kind of unheard of in the industry. But at the end of the day, at the time we were living in the city, in Sydney CBD, and obviously there's a lot of distractions in the CBD, as any recruiter would obviously know. So we actually kind of moved to the middle of nowhere, where no distractions. I set up a home office, so one shareholder, one director. And, you know, for the first 12 months, it really was smooth sailing. Had a number of clients obviously reach out to me, had a very successful first year, and then decided to get my first office. So basically moved back into Sydney CBD, got an office there, took on my first employee. He was actually still with the Design and Construct brand, which is now Building Careers. He's been with the business for about 13 years, 13, 14 years. So from there, basically went from 2, actually hired an additional 4 consultants, so made quite a big leap from 2 to 6, and kind of rode that out for about 2 or 3 years. You know, business was going well, but then I mentioned earlier, the global financial crisis came around. I just got engaged and I just bought a house, and, you know, stress levels were through the roof. And we unfortunately had to let basically 3 of the team go. So we're back down to 3 rode that out really for about, probably for about 2 years. And then Hisham Biva Saga, that was just a huge success story for me personally, but also for the business. In the space of 4 years, I took Design and Construct from a small office in North Sydney to Sydney, Melbourne, Brisbane, Perth, London. We had a total headcount back in 2019 when I exited around about 50, 52 consultants across basically the 5 offices. And it was really rapid growth. So we went from 6 up to 12, doubled again, then literally doubled again up to 24, and then consolidated for about 6 or 8 months. And then literally I was just constantly on the road interviewing consultants, opening up obviously the new offices, trying to get the brand out there as much as possible. And look, there was definitely ups and downs with that. I think being one shareholder, one director, where a lot of my competitors actually had multiple directors, kind of lightening the load, shall we say. It was certainly obviously challenging, a learning curve for me personally and professionally, not coming from a recruitment background. And one of my biggest regrets, I guess, mate, is I was self-trained. Literally, the agency I started with, it's, "There's a phone, there's a desk, crack on, you know, obviously do whatever you could do to generate some revenue." And, you know, because of that, I guess ultimately it put me in really good stead for actually running my own business. And my background from the UK, obviously I was born in England, moved to Jordan at quite a young age. Again, my dad was in construction, lived in Jordan for about 4 and a half years, then back to the UK, then we moved to South Africa for 4 years, and then back to the UK again. I moved out here when I was 24. So I've actually now lived in Australia longer than I've actually lived, I guess, in the UK. But my background in the UK, my first professional job was actually actually working for AXA Insurance, and I was doing outbound sales for them. So that combined with, which was my next job, which was newspaper sales, account management, account exec, going around visiting clients, face-to-face meetings. So that combined with the AXA experience, when I came into recruitment, it was just like a perfect match. The outbound sales, obviously, you know, the client interaction, candidate interaction from a from an interview point of view. And it was something that I just absolutely fell in love with. And, you know, as I said to you before, I really do eat, sleep, breathe recruitment. So even obviously now in my new venture, I'm on the phones, you know, I'm recruiting, I'm obviously doing deals, and that's the part that I love. And ultimately, I guess with design and construct, when we got to the size of 5 offices, I kind of missed that. I missed that start.

Wait, wait, wait, let's unpack this, right? 2 secs. That's cool. Now, one of you— so that's really helped, right? So everyone will now know what went on. So the reason why I just stopped you there is because a lot of people— one of the most common things that people ask me from recruiters, recruitment business owners in the UK, 80% of the UK recruitment market is sub-10 staff, okay, around that, different sources or whatever, right? So why I just stopped you there is because I just wanted to sort of hone in and focus on maybe some key milestones, some key breakthroughs for you personally that enabled you to break through those glass ceilings. Because I know when we spoke, you said that, yeah, that like you had some sort of pretty breakthrough moments when you started doing things a bit differently in terms of scaling, right? So let's just— so the first thing that I just wanted to ask you that's relevant to today The global financial crisis.

Yeah.

What, as a business owner, what did you learn during that period that you think applies today?

Yeah, look, that's a really good question. I think ultimately it comes down to, again, it's a cliché, but you're only as good as your last placement. And I think, but given Design Construct's track history with clients and the way that we present our candidates, the process that we went through, we were always very thorough in our approach, and, you know, our candidate synopsis outlines, you know, candidate skills, experience, attributes, availability, salary expectations, you know, why they've left their most recent role, but ultimately why we think as consultants they're suitable for our clientele. And I think because of all the hard work we're putting into the actual process of sourcing the candidates, interviewing them, getting them across to our clients, that backed with a 12-month replacement guarantee, which at at the time was completely unique in the industry. Nobody was offering that. That combined was just a real useful tool for when things did start to, you know, the wheels did start to wobble a little bit during the GFC and then they completely fell off. It was all those relationships that we built up in that short space of time where clients, you know, as an organization, 95% of our revenue was repeat business. You know, I would always say to the consultants, you know, work smarter as opposed to working harder. You know, if we we can really get into the organizations where we can actually make a difference, and we can educate them in regards to what the recruitment process is, the amount of work that goes in behind the scenes to actually source candidates, you know, whether it's from our own CRM, whether it's from our own network, you know, whether it's from advertising or whatever the case may be. It was— our clients always kept coming back to us, and I think that's testament to building a brand, which is obviously something that, you know, you're really big on. And to me personally, Design and Construct, and I'm going to be biased, mate, but I'm sure a couple of your listeners or a couple of people you may know in Australia, it was arguably like one of the most solid construction and property recruitment brands on the market. We were constantly coming up against organisations like, I guess, Design and Build, the Constructives of the world, the Now Careers of the world, but they all had probably 20 years' recruitment experience on me. And so it was very flattering to be able to build a brand where people genuinely enjoyed coming to work. And I think, you know, some of the milestones for me, or what was a real shift for me, I'm dyslexic, you know, my highest grade in school was a D, and that was for drama. And so the actual operational side of running a business isn't necessarily my forte. And one of my biggest achievements was when I actually first hired my operations manager in Sydney, which then allowed me to put—

When did you do that?

That would have been in 2000, probably just as we literally started to grow again. So it would have been 2009, 2010. And then really from there, it was just a case of ramping up. So we got the operations manager in place. We then got all the systems, the processes.

Oh yes, let's just talk about that. Because I think this is becoming really common, Efraim, conversations that I've had with recruitment business owners, recruitment entrepreneurs who have successfully scaled their business, there's always these sort of key moments where we bring it back to process, or we bring it back to sort of the, the people that I've been speaking to, recognizing and having the humility to go, you know what, that isn't my forte, but it's important. I need to get someone in to really manage that and do that process right, which is what you started talking about. So just, just quickly And I'm sure this evolved and you worked this out, but like, what was the intention when you was thinking about this operations person? What in your head, what was you thinking? Right, if I can get them to do this, this, this, and this, it's going to enable me to free up my time to do the things that I'm better at. So what was the sort of core processes or core things that they were going to sort of take over for you? Just to spell that out, because I think that'd be really helpful for people.

Yeah, not a problem. So I guess GFC, as a business, we were predominantly 80% perm, 20% temp going into the GFC. And, you know, in hindsight, obviously we should have probably got that mixture a lot better. But what I decided to do was certainly coming out the other side of the GFC was making sure that we had a large temp book. Like, that was basically the number one priority. For me to be able to do that though, we really wanted to make sure that we could streamline the whole process. So do away with all the paper trail, do basically bring in the best tech stack that money could buy, for us to be able to give the consultants the opportunity for speed to market. And that's my strength in regards to, you know, business development, account management, you know, mentoring teams, growing high-performing teams. But the operational side is definitely something that, you know, was my weakness. And Fortunately for me, there was a lady who I hired called Cheryl Sunderland, who's now called Cheryl Bellanos. Long story short, she actually contacted me for an operations manager role, and her salary was just way above what I could actually afford to pay for that position at that time. We kept in conversation, and about 2 or 3 months later, Cheryl actually came back to me and said, look, I just want to work in your business. I'm happy to basically start at whatever, but I really I buy into you, buy into the ethos of the company and what you're looking to achieve. Everything that you're looking to set up, I can do pretty much straight away for you. So we actually hired Cheryl, and she was the first instrumental hire really for the business from a management point of view. And also for me as a business owner, and I come up against this and have this conversation a lot of the time, it's being able to let go of the reins. Being able to, I guess, provide somebody else with the, I guess, the management opportunity in your organisation to actually run things.

Why is that difficult, do you think? Why was that difficult for you?

I think it's risky, you know, and a lot of people think it's, you know, it's a very incestuous industry. There's a lot of intellectual property that obviously comes with a recruitment agency, and I think everyone's always mindful of, you know, if somebody's going to come and join the organisation potentially learn all the tips, tricks, advice, again, the systems and processes, and potentially obviously take that away. That was certainly my hesitation at the time anyway. In hindsight, I should have probably brought in an operations manager or someone in a similar type of ilk a lot earlier.

What helped you get over that then?

Well, what helped me get over that, I guess, was the desire to grow and expand. I was all about world domination. I really was. Obviously, you know, my late 20s, going into early 30s, and like, it was just the passion that I have of growing a business, it's quite contagious. And, you know, even myself, I get myself out of bed every morning with the end goal of wanting to achieve something, wanting to basically make something better. You know, brand is a real big thing for me. At the time, Design and Construct, when we had 5 employees, probably had one of the best brands on the marketplace. I had a full-time graphic designer working with me from day one, you know, which is pretty much unheard of in the industry, certainly back then. But that graphic designer was worth his weight in gold, you know, from a brand awareness, from a strategy, from a market, basically, presentation. Like, we were, from the outside looking in, we looked like one of the largest recruitment agencies in Australia. And I think that's what's so important about marketing, digital marketing, about about branding, but also about believing in your actual product and believing in what you're actually doing. You know, there's a number of brands out there in the marketplace that unfortunately just haven't had the investment or the time or the energy pumped into them. And that's something Design and Construct, for me, something I'm very proud of. We won, you know, 3 years in a row LinkedIn's Most Socially Engaged Agencies. We won 2017 the Best Training through the Recruitment International Awards for Best Training Initiative in the whole of Australasia. It's those types of things that really give me the buzz and again, really, you know, take me back to why I got into recruitment in the first place.

So, got the operations manager in, she joined you. Like, what was, I guess, what were some of the maybe one or two things that made you think, fucking hell, why didn't I not do this earlier? Like, what were the sort of key things that she did that really had an impact on you being able to scale your recruitment business?

Well, I guess literally just taking away every administration or operational type of responsibility or task. You know, we were implementing, obviously back then we were implementing Bullhorn, so there was a lot of integration that needs to come with that, and then obviously all the marketplace partners to Bullhorn as well. But, you know, one thing When I actually hired Cheryl, I actually hired somebody called Simon who previously had run his own business. And he actually had a very successful temp business, BRW fast starter 3, 4 years in a row. And unfortunately had a falling out with his business partner and approached me to see whether there was an opportunity for him to come on board with Design and Construct. As I said, at the time we weren't doing a huge amount of temp and that was his forte. And again, Another turning point in the, I guess, the success of Design Construct was actually setting up that contracting division and actually having somebody like Simon lead that from the front. That wasn't my forte. Again, I'd never really done temp as a recruiter to a certain extent. But yeah, no, that was definitely a turning point for us as a business. Operations manager, somebody running the trades and labour side of the business or the contracting side of the business, again, meant to free up my time to go to market, to try and attract and obviously hire the best individuals in the market.

Is that what you ended up focusing on then after you got those sort of people in place?

Absolutely. That was purely, I guess, ultimately my goal was always prospecting, you know, always speaking to people of all different walks of life. And I think, you know, one thing for me, I come from a very humble beginning, mate. You know, lived on obviously housing commission or council estates or whatever you want to call it. So for me, Personally, I always treat everyone as I expect to be treated, and I think that kind of moral has got me so far in life and certainly so far in recruitment. You know, I can tell you numerous stories in regards to— I've just made a placement about 3 weeks ago by talking to a co-founder of a very successful tech stack company who I met walking my dog, you know. It's those types of opportunities which again give me the buzz and really get me out of bed in the morning. Because every day in recruitment is completely different. Not one day is the same. And again, just going back to the early days in Design Construct, it was that buzz, it was that, you know, that high-energy, high-performing team that really got me going.

So, obviously, you had way more time to, yeah, as you said, prospect, grow the business.

Yeah.

I guess—

But then also look at technology as well, mate. So without the assistance of, I guess, the technology that we implemented, and again, given the size of the business that we were, we were one of the largest advertisers on all the major job boards in Australia. Brand was very prominent. Technology-wise, we were using Bullhorn. From Bullhorn, we also integrated some of their marketplace partners. So you had Dextra Technologies, which was in essence basically an additional search technology within Bullhorn, Bullhorn, where we're using Cube19, also InsightSquared, which is big data analytics. At the same time, we also basically saw— I started to work one-on-one with a guy called Mike Walmsley, who you may or may not know from the UK, but ultimately Mike is, to me personally, he's actually one of the mentors that's got me as far as I think I have in my career. He was a wealth of knowledge, a wealth of wisdom. We started doing one-on-one video conferencing. Calls.

How did you engage in that, by the way? How did that happen?

Yeah. Well, I guess, mate, I've always, you know, I've always wanted to surround myself with business coaches and basically just individuals that I can learn from, that I can absorb their information or their knowledge from. And I just found Mike to be really open and really forthcoming with his experience and also his material. So his training material, his marketing material. And me personally, I always want to develop my skill set, develop my team. Training for me as a business is actually, you know, it's really high up there on the list of priorities. We can create basically one of the best working environments for anyone to come into, but if you're not upskilling your staff and training your staff, you're going to get left behind, you know. So Mike and I basically put together a structured training program for each member of the team. And we were doing one-on-ones, we were also doing group training sessions. Mike, again, as I say, has got a wealth of, obviously, knowledge and experience, but also marketing material and training guides, and that we basically— we're speaking to Mike in regards to a recruitment excellence guide, which we put together. In essence, it's about a 300-page recruitment guide that could teach anyone how to recruit, from a resourcer, but he's also got relevant content in there all the way through a recruiter's career. So, resource, recruitment consultant, principal consultant, etc. We implemented that and straight away, we noticed a huge, you know, the conversion rates were just going through the roof. So, we knew we were on to something, we knew the training was working, we knew the approach, and basically by structuring everyone's day, not micromanaging, but structuring and giving them the information in regards to taking more of a detailed job description, asking more relevant questions at a client visit, cross-selling at a client visit, and it really turned the business around. At that time, we were doing about $700,000 turnover, and then the time I was working with Mark on the one-on-one and also the training with the learning management system, we got up into over a $10 million business. So what happened then though was, Recruiters are interesting characters, aren't we? We're always basically craving for more, so it didn't matter to me personally how much training I was giving the team. Certain team members would really get engaged in it, and then others would find it, "No, it's not really for me." So it's, I guess, about finding that fine balance in regards to how you can keep everyone motivated and engaged, but also show them that ultimately the training is actually going to benefit them, not not just professionally, but also financially.

And we then, you know, why do you think all of that had such a dramatic impact on profits?

Well, I think that implement that alongside the tech stack that we had and the back office support from an operations, it was just all everyone needed to do at that time. I think, yeah, at that time I had about 5 or 6 consultants who had previously run their own recruitment agencies working for me. And, you know, a lot of them actually still— I've actually got one guy who I've hired 4 times now, who's actually coming on board as a partner with me in August. And I think, you know, those individuals had all worked for the likes of Hazys, you know, at the time your Julie Rosses, you know, your Robert Walters. And, you know, coming aboard to a small boutique, which we were, but given all this technology at their fingertips, you know, like things like Lucia you know, obviously, which everyone's using now, we were using like 10 years ago, or the equivalent of. And again, just investing heavily into the best tech. So Bullhorn worked wonders. Bullhorn really enabled us to onboard our candidates, onboard basically the consultants as quickly as possible. And from there, also, what we then did, as I say, the DAXTRA implementation also helped our speed to market. It was a lot a lot of detailed search within Bullhorn. The big data analytics that Cube19 provided us, and then also InsightSquared, provided us with tangible data where we could really track everybody in the business, not micromanaging, but track their, basically, activity, so no activity. We're also able to track all their internal interviews with, sorry, with candidates, and also track the consultants, basically client meetings, you know, what were the conversion rates. We were then able to collate all that data and really work out a sweet spot in regards to, okay, jobs to interviews, interviews to client interviews, and then obviously to placements. And it just worked. And we came up with a mod— basically a, I guess, a module, which was if we pick up 5, or each consultant picks up 5 solid jobs every single week, from those basically 5 jobs, if you can send out 10 candidate synopsis, and the synopsis is what I was talking about before, outline skills, experience, attributes, availability, salary expectations, why they've left the most recent role, but ultimately why myself or our consultants would think they're suitable for the role. Yeah, it's that, I guess, by doing that, we were then able to really basically track those 10 candidate synopses. If they're getting anywhere close to a 2-to-1 ratio, 5 interviews, then the deal's going to come. So 5 jobs, 10 candidate synopses, 5 interviews with clients, and the one placement. It was actually Greg Savage, one of his masterclasses that I picked that up from, but it just works.

Yes, he's a really good the science behind it and the process.

Absolutely, absolutely. Everyone would have the small little whiteboards basically in front of them, you know, and they would have the metrics basically written up there. And we were tracking it all and reporting on a daily basis, weekly basis, to all consultants and providing them with that information. The good thing with Cube19 as well was obviously the leaderboards. And yeah, I think we were one of the first companies to actually sign up to Cube19 when they first launched out here. And again, that had a huge impact on our business, the leaderboard, very competitive. We had 5 offices, you know, so to actually have everyone, you know, basically accountable, and there's nowhere to hide with that type of stuff, right? Ultimately, you know, it's a revenue-based role, but when you've got a leaderboard that's constantly changing in real time, I actually found that that was also a real turning point for us because it kind of get that— you've got that camaraderie, but you also obviously need, I guess, the sales kind of environment as well, and that certainly helped us really manage that and showcase. We were probably one of, arguably, one of the best payers in the industry, one of the best commission structures on the market. We rewarded hard work, we give additional incentives, additional bonuses if people were exceeding the targets. It's basically, you know, how do we reward that? So again, implementing champions lunches, implementing basically, you know, obviously top billers every month, every quarter, was really constantly trying to strive and make sure that consultants really didn't sit on the laurels, and then ultimately constantly had that kind of carrot to encourage them to obviously go out to market, to really capitalize on their chosen sector, but also never forgetting that it's all about quality over quantity, right? And we would always be checking synopsis, so the managers in the business would always be checking their consultant synopsis to make sure that it is of that high standard that we expected, because those synopsis were really testament to our interview process, but also the methodical approach that we actually took through it. Very rarely we actually had candidates fall off. I mean, we were offering a 12-month replacement guarantee, and people at the time thought we were mad, but the reality of it is, again, as I mentioned to you, obviously, the amount of repeat business that we had, we very rarely replace candidates, because it's all about, I guess, the understanding the job brief, and again, that this was all the implementation that we got from the likes of Mike Wormsley, you know, obviously listening to the likes of Greg Savage, and really kind of just making sure that we have the best technology or the best systems available. Now, another thing that we were the first company in literally in Bullhorn's history, we partnered with Kalo Partners, so Raymond Penny over there, absolutely terrific guy. If there's any Bullhorn customers looking for some additional support, I can highly recommend Kylo Partners. And we were the first company to implement DocuSign into Bullhorn, you know, and again, it's the size of the business that we were, we were being pioneers in our industry and nobody else was doing that. So again, if you look at the CRM with the big data analytics on top of that, you've got the best search engine technology within the database. At the time, then LinkedIn also became the first CRM to migrate or basically to work in conjunction with LinkedIn. So they actually had the LinkedIn integration. It literally meant my team had nothing else to do but work in Bullhorn. And again, we eat, sleep, breathe recruitment. We also eat, sleep, breathe Bullhorn. I'm a big advocate of Bullhorn. I can honestly say that I put a lot of success down to the way Bullhorn allowed us to actually set up the business properly, put the foundations in place, from an operations point of view, but then also make sure that everything was being tracked and everyone was accountable for what they did. You know, from a website point of view, we were constantly updating the website. Every 12 months we would have a brand new design on the website, still the same brand, but ultimately, you know, websites change, right? And obviously, you know, the industries change. We were ranked Google one-page-one ranking organically, you know, for over 500 keywords. Basically, we had over 500 landing pages on the site, which were all specifically written by, you know, companies that we'd obviously outsourced to. They were obviously writing white pages. We were doing salary surveys. Again, nobody back then was doing anything like this, and that's really something that we've kind of brought across into all the businesses, but especially into CoMo Co. We're able now to kind of Everything that I've learned over the last 18, 19, 20 years combined basically with the business experience of the startups, of the scaling, of the exiting, and then also, you know, going through the ups and downs. It hasn't all been sweet. Obviously, it hasn't been an easy ride going through a GFC, you know, obviously trying to find the right investor, you know, obviously going through the process of scaling up a business. You know, the UK was probably one of the most challenging offices for me.

So, look then, to make that super simple then, operations manager, tech stack, training and development, processes were all sort of the sort of key parts of the recipe that—

And reaching out to key individuals.

And then, yeah, constantly reaching out to key individuals that could help sort of take your business further. When did you start seriously thinking about exiting this business then? And why? How did that come about?

Yeah, well, there was a number of reasons behind that, mate. Personal reasons, I guess. Obviously, I'd been in a relationship and married for 15 years, and basically decided that obviously that wasn't going to continue. So at the time, we went through basically a divorce, went through a separation, and obviously a settlement. And at the time, basically, you know, recruitment has always been, as I say, in my blood. The Design and Construct brand got to the size that it did. And it's not that I didn't enjoy, obviously, the 5 offices. What I didn't enjoy was all the travel. And I was constantly travelling from office to office to office. And where I got that wrong personally is, again, by not releasing or giving away the reins to other people in the business earlier and feeling as if I needed to be in control, running, I guess, the whole business. I mean, at the time when I exited it, I actually had quite a large operations team. So I had an operations manager who'd been with me for about 6 years. We had a financial controller, we had a dedicated payroll manager, we had a dedicated accounts receivable, we had a digital marketing specialist, we also had a trainer, basically a full-time trainer. And that's literally just within kind of the ops team or the back office team. And because the business was kind of self-sufficient and it was running itself, what really got me going was when I actually brought the investor in, my role was to actually go to market and try and identify other businesses that we could actually bring under the band, under the bands. What I actually did was there was a lady called Leslie Delaney who was Hayes' global dealer for 6 years out of 8. And, you know, she was doing about £3.2 million gross profit a last financial year with Hayes. And we approached her basically to come over into the business. And we managed to sign Leslie, bring her into the business straight away. I think her business now is doing about $50 million turnover in 18 months. You know, it's those types of opportunities that I love focusing on. And I guess that's where the other businesses also came from, is really my network in the industry. Speaking to other like-minded entrepreneurs. They'd obviously seen the success with Design and Construct, seen the success basically with a couple of the other agencies, and I think that's what's now falling through to the Kono and Co brand, is obviously people reaching out who are keen to actually now go out on their own, but, you know, a little bit uncertain as to how they do that financially, whether it's the capital, whether it's the systems, process, procedures. And to me, that's the easy part of setting up an agency.

So, sorry, just quickly. So how did it actually go out then? Was it a management buyout? Was it a private equity deal? How did you actually exit your business?

So it was actually basically a private investor and basically bought me out of the 3 businesses. So basically it was Design and Construct, which is now rebranded to Building Careers Australia, Preston James, and also 420 Consulting. The Design and Construct Limited was sold to a separate investor. They've now rebranded to Ingenie Resources, and they're arguably going to be probably one of the biggest engineering recruiters.

How did you source these investors?

Yeah. So I guess the investor was actually, bizarrely enough, he was actually my old neighbor in my first office.

I was going to say, I thought you were going to say you met him whilst walking your dog.

Well, I would have met him in the lift at some point. That's how the conversation would have started. Started the relationship there, I guess. His business, he was in property development and a number of other things. He then went on to, yeah, basically to become a director of a large engineering consultancy. I kept in contact with him. My finance controller previously worked for this guy. And obviously I knew of him. He made a couple of inquiries a few years prior. So up until literally 2017, Design and Construct was fully funded. All the temps, basically everything to do with the business, I was funding it myself. It was only once we got to, I guess, over to the UK and we were doing quite a bit of contracting over there, that's when I was looking for that investment or that capital to really take the business to the next level. And look, it's testament that it's happened. I think the business will probably be doing about $60, $70 million million turnover in conjunction with obviously, I guess, the trades and labour or the mining side of the business now. And the timing for me personally was just right for me to exit basically, rather than obviously keep hold of a couple of businesses. I wanted to have a clean slate. I knew basically they were going to be in good hands, or certainly as far as I was concerned. But yeah, I guess the opportunity then obviously arose for me to—

So was it— Just quickly, because look, I think a lot of people have had that sort of vision of building and selling a recruitment business, right? Which is why I'm just asking you questions about it. But so yeah, so obviously for what you wanted personally, you wanted a clean slate, you wanted to get completely out. So was it just a matter of— so did you not have to stay on for any period after that? Was that not part of the deal? Was it they just sort of— yeah, you agreed on a settlement that you was happy for and then you walked away and there was no responsibilities to hit certain metrics or whatever after Yeah.

So I guess with two of the businesses, it was just complete buyout. And there was no restriction, just a complete buyout. The Building Careers business was obviously initially a buyout, so in regards to buying into the business. So I sold 60% equity to the investor. Also somebody who'd been with me for a few years, started as a recruitment consultant, then into a principal, then into a team leader, then basically into estate manager role. We brought him to the table, made him a director of the business as well, with the intention of him growing and running the kind of design and construct building career side, and I would continue on the acquisitions. It transpired about 9 months in that obviously they were hemorrhaging, going through money with obviously all the acquisitions, and there was an equity call made. And quite frankly, mate, obviously I built this business up over 15 and a half years, and I just didn't agree with the equity that's the reason basically ultimately why building career, so design and construct, why I exited that. And that's why basically I decided to make a clean slate. And once I actually exited completely, the plan was for me to take 12 months off.

I was going to say, how did you feel? How did you feel? Let's just talk about how did Efron feel after 15 years, blood, sweat, and tears? As you said, one of your biggest pitfalls has been letting go. You've now had to let go of the whole bloody thing. No more, no more, yeah, do you know what I mean? No more going around his offices, whatever. Like, how did you actually feel after exiting those businesses?

Yeah. To be honest with you, mate, it was actually, it was a relief. Given the amount of, I guess, the amount of work that was going in, to me personally, as, you know, from a professional development point of view, at that time I'd joined the YPO, which is the Young Presidents' Organization. I'd already been approached by a couple of other companies as well to actually do something with those. And also a couple of my own investment opportunities as well. I just felt that the timing was right. I didn't— obviously, the alignment with the investor wasn't working for me. And I just felt it was the right time for me to exit and really, and again, start afresh. After 15 and a half years, going through— obviously going through a divorce, going through a settlement as well, I felt as if I'd taken Design and Construct as far as it could go. They then basically rebranded under the Building Careers, basically, business model. And that was really then to go out and obviously, I guess, to tackle other industries and other markets. And that, again, wasn't in line with really where I saw ultimately myself going. My area of specialisation is in startups, it's in property construction, it's in recruitment to recruitment, it's in IT software. And again, it just didn't align with my personal values.

So what did you do in those 12 months then?

Well, 5 weeks in, mate, I was at— we went to Bali initially where I got engaged. And then my father-in-law actually invited us across to Hawaii. So myself and my wife were across in Hawaii. This is 5 weeks into what was supposed to be a 12-month sabbatical. And I was bored. I was bored shitless, mate.

Why? Why?

Well, I guess ultimately I missed recruitment. I'd miss the buzz of recruitment, I miss the phone ringing, I miss basically getting up in the morning and obviously just planning my day, speaking to candidates. I love changing people's lives, you know, in recruitment you really do make a difference and you can really change somebody's life for the better, but you could also obviously, you know, potentially do obviously do some damage as well if you don't do the recruit, obviously don't do the process right. And it was, I was literally just sitting there and I was speaking to my wife and I said, look, I think obviously I'm going to have to do something else. And we were talking about business names and Kona Co. Kona is actually on the Big Island in Hawaii and that's where the name originated from. But as soon as I got that into my head, Kona Co., Kona Co., Within the first 3 months of me launching Cobra Co., we were profitable from month 1. We were absolutely smashing goals month 3. Come month 6, I got a letter from the investor and from the management team at my old business, basically along the lines of I've come out of the traps too fast and if I could quietly obviously just batten down the hatches and really not recruit recruit for anything to do with property construction or anything that I recruited for historically. So that kind of put a bit of a spanner in the works and the brakes on in regards to the growth of Kona Co. But after obviously dealing with that for a couple of months, that's now all been taken care of. And now obviously we're kind of back to the growth, obviously rapid growth, quick expansion, obviously market domination. We've now got 4 offices in Kona Co, Sydney, Melbourne, Brisbane, Perth, London's also there as well, but obviously I count that as a separate country. We're looking at expanding into Singapore, into Hong Kong, and also into Americas. We're now at a headcount of 12, which has obviously grown rapidly over the last couple of months with further hires coming on board. And it's that growth, it's that brand, it's, you know, you look at the Kona Co brand on LinkedIn, on our website, it's very prominent. As I mentioned to you previously, we've actually got 10 revenue streams. The business has been set up as a partnership model. So myself ultimately as the founder, but we do have managing partners in each of the 10 revenue streams with the growth strategies to have 4 partners underneath those, one in each state. And then from there we would have the associate partners and then basically the principal recruitment consultants underneath them.

What's, what's the benefit of that model?

The benefit of that model, ultimately, for me, is again, from a management point of view, but also to attract the right level of caliber of talent and consultants. We've got a structure in place where it's very black and white. Anyone who comes on board as a recruiter, resourcer, has a target, basically, where they earn 30% of everything they build over target. 60 grand a quarter is their target. In. But once they build $500,000 for the business, they automatically get a promotion. The target stays exactly the same, but the commission is actually bumped up to 40%, and they would then go into an associate partner role. Once they actually build $100,000— sorry, once they build $1 million for the business, they then get the opportunity to move into a partner role with equity actually offered at that stage. So the business model, we've got a growth plan and strategy in place to be at 50 partners partners by 2022, which we're already well and truly ahead of basically our timeframe as to where we wanted to be. The COVID absolutely has set us back, there's no ifs or buts of that, but I guess we're learning to pivot, we're still obviously onboarding, we're still taking people into the business and into the team, and the actual model that I've created and gone to market with has been so well received, you know, that we're literally is all the last 2 weeks, all I've been doing is literally speaking to, you know, recruitment consultants, division managers, state managers, directors, founders of recruitment agencies who are actually, you know, really interested in coming on board with the Kellner Co brand. You know, it's given obviously what's going on with the COVID situation, there's a lot of doom and gloom in the market, you know, and not that we're doing anything different to anybody else, but ultimately, you know, we're making placements, we're picking up jobs, jobs, you know, we're hiring, we're growing, we've got the best tech stack on the marketplace, and really it's just a good feel-good story. And again, the interest that we're getting is actually really flattering, if I'm honest, Hishem, it really is.

So, just as we sort of come to the end here then, what were sort of the key things that you had in mind when you decided after 5 weeks you're going to start another recruitment business? That you obviously learned from your 15 or so years experience that you was like, right, obviously we're starting Kona Co. I'm going to make sure I do this, this, and this because what I've learned in the last 15 years has taught me that. So what was just some of the key parts that you had in your mind that you really wanted that was sort of non-negotiable when, when starting Kona Co. that came from your learning experience, did you think?

Yeah, do you know what, mate? I'll go back to the question and I'll answer that in a second, but I'll go back to the question you asked. Asked, how did I feel when I exited the businesses? And there was like, there was something missing that I couldn't explain what it was. But it's honestly—

So empty?

Yeah, absolutely, mate. Like I'm literally sitting there and twiddling my thumbs going, okay, well, what— I'm used to managing multiple offices, multiple businesses. Now all of a sudden, literally, I've got, obviously, yes, I've got a very bright future ahead of me. I'm 40, at the time I was 41 years you know, just weighing up basically where I'm going to go now with what I'm going to do next. You know, at the time, we just basically purchased a cosmetic business. So my partner has a cosmetic business. I was like, okay, well, I could get involved in this to a certain extent. But recruitment's definitely in my blood. It's that that really was the driving force behind Kona Co. And then what I found was, mate, once I started, I just couldn't stop. Like, it was going to be Ultimately, the actual business itself was going to be more of a lifestyle business. I had that many clients, that many candidates that I could work with, just take it easy, work, you know, part-time hours, whatever the case may be. And if anyone, people that do know me knows that once I'm, yeah, obviously recruiting, mate, I do 15, 16 hours every single day. I'm up at 4 o'clock every day. And that's what Koder Co. has basically provided me again, is actually that passion, that drive, that motivation to change people's lives, but also to create arguably one of the best brands in the marketplace. And that's ultimately what I'm striving towards.

So you're not retiring anytime soon then?

Not retiring anytime soon, mate, no. Yeah, there's so many opportunities out there, mate. We've obviously got the Kona Co brand in regards to recruitment, but I've also got Kona Co Capital as well, where in essence, basically, it's a seed fund for startup agencies, where we're currently speaking to a dozen potential, obviously, individuals that are going to come on board under the Kona Co Capital brand, where we'll actually provide them basically with everything they need to set up their own agency, knowing full well they've got the full support and back office support of everyone, obviously, within the business. And that in itself has created, like, so many opportunities and so many conversations for individuals who, typically speaking, mate, 6 months ago probably wouldn't be willing to have these conversations. But I think the whole COVID situation and, you know, with everyone working from home, it has become a bit of a luxury, and people are enjoying working from home and working part-time hours. So I think the recruitment industry is definitely going to change.

How do you think the sort of future might look like in Australia?

Yeah, well, maybe it's disrupt or be disrupted, you know. Ultimately, that's, I guess, what we're trying to drive towards, is we want to constantly be changing, evolving, pioneering in recruitment. You know, there's so many new technologies that are coming to market, and, you know, companies like Referoo and, you know, organizations like Inside Recruiting— there's so many new tech or add-ons to the recruitment game that can really add so much value in, not just to you as a consultant, but obviously to your brand and your integrity. And I think because we're always willing to look at new technology, try new technology, if it's going to make a difference to our business, it's going to help us speak to market, it's not going to dilute the brand or basically the consistency of the quality that we expect, then we're all for that. And I think having, you know, obviously a very flat management structure that is open to change and, you know, really embraces technology, I think that in itself is such a huge USP for our business, for people wanting to join, you know. The recruitment training that we provide to our staff is second to none, you know. The recruitment training and HR side of Code and Co, we offer on every single placement free access basically to our LMS. We offer a copy of the Recruitment Excellence Guide, you know, that's valued at about $3,000. Nobody's offering USPs like that in the Australian market, and that's really why, you know, from a recruitment training and HR piece, you know, as a business owner, I've spent hundreds of thousands of dollars on recruitment, on recruitment to recruit, and you know, made some phenomenal hires, but it was always the training and basically the follow-through and, you know, the checking with those consultants that really, I guess, where the industry kind of dropped. You know, so being so passionate about recruitment, I want to do something different. I want to give clients the opportunity of getting more value for the money. And also, you know, with the guarantees, extended guarantees, which I think is just a given in this market, right? And if you're not willing to obviously, you know, work with clients long-term and you're not able to help them out during a difficult spot or whatever the case may be, it's, yeah, you're going to struggle in business. And again, the jobs that we've got coming through now are all relationships. They're all relationship-driven. Driven, you know, and somebody— I've got a client at the moment, I've placed over 100 full-time employees with this business, and I recruited for them for over 18, 19 years. And, you know, I've recently just become an ambassador for EXO Works, and basically, you know, they've got over 2,000 consultants globally. Their CEO I recruited for 18 years ago. We haven't spoken in 18 years, but called me out of the blue because basically she was looking for an executive search provider in Australia. And I think it's to have those types of clients come back to you after such a long time, you know you're doing something right.

Yeah, so look, love your energy, love your passion. Clearly, definitely, uh, eat, live, sleep recruitment. Um, look, Efrem, look, parting words. If, if sort of recruiters, recruitment business owners would take on your advice, they'd listen, um, they'd implement your advice tomorrow, it could be a word, a phrase, a sentence, wherever it may be, what, what do you want to what are your parting words to the people and the recruitment industry?

You know, the old saying goes, we spend too much of our time at work for us not to be happy. And for me personally, it's about creating that work-life balance for everyone in your team and treating everyone in the business as an equal. We find too often in recruitment that the accounts operations team becomes it's separate to the sales team, and it's so common, right? It's about making sure that the whole team is embraced. One of my biggest tips I would give to anyone is in a startup mode, brand integrity is everything. If you can find a graphic designer and an ad agency that can work with you to really make sure that your brand awareness and your style guide and that consistency consistency with the brand is key. It will just help basically your business excel from a referral point of view. It's a no-brainer. Design and Construct, we were getting on average between 3 and 5 brand new client ring-ins on average every single day. And that was from all the marketing we're doing, from all the SEO that we're doing, and all the brand that we were doing.

Efraim, it's been a pleasure. Thank you.

Thank you, Hishem. Appreciate it, mate. All the best.