James Leighton - Growing without an investor, investing in good tech & the reality of internal Rec

Welcome to the Recruitment Mentors Podcast. My name is Hishem Azzouz. Today I'm really excited to be joined by James Layton, who is the founder and CEO of the Anderson James Group. James started his recruitment career in 2005, where he actually started in tech recruitment in London. Since then, he has worked for multiple recruitment brands including Michael Page, and he took his recruitment career into the property and construction markets. In 2015, he set up the Anderson James Group, who now have 4 key divisions within the business: executive, housing, construction, and consulting. The business is now nearly 6 years old. They have 16 people in the company with ambitious growth plans, and James's role within the company now is all about the strategic direction, the growth, and the day-to-day management of the group altogether. So James, It's a pleasure to finally have you on the pod, mate.

Welcome. Thanks, mate.

Excited for this. So where we always like to start, in your opinion, what characteristics and traits do you think make up a highly successful recruitment consultant?

Yeah, well, being an avid listener, I knew it was coming. So we've done quite a lot of work as a business on this with the management team recently, and then bar the usual stock answers of work ethic and All the things that you hear like resilience, etc., we broke it down into 3 areas. I think we look for people that are inquisitive and curious. We think it's a big part of what we do. We look for people that have got quite obsessive personalities so that are willing to sort of throw themselves into things and really sort of double down on being entrenched in their marketplace. So the way we test that generally is like, what have they been obsessed with previously? Whether that might be sport, it might be a hobby, it might be something else. Like where have they really gone the extra mile? And I'm sure we'll talk a little bit about that. And the other one's communication. But previously, if you'd have asked me 5 years ago, I'd have said verbal communication. But we really test now written communication.

Really?

It's a big part of what we do. Yeah. So we've started to, as part of our interview process, we've started to get candidates to write a spec about themselves or an email to outline an introduction because, you know, I don't know what other markets are like, but our market specifically at the moment is You know, 50/50, I would say verbal and written. So you've got to be able to write well. And as you know, from a personal brand perspective, you've got to be able to write good content from time to time.

Yeah. Yeah. That definitely was, that was never my strongest point, to be fair, writing. I think, have you ever, have you, you or the team ever used a tool or heard of a tool called Grammarly?

No, but it's interesting you say that. I've used it personally, but the team don't use it. But just to make sure if I'm sending out anything important, I just run it through that tool and make sure it's accurate.

Yeah, because that's what I mean, like relying on a human person to always make sure it's accurate. There's going to be things that slip through. And I remember I actually did a similar thing. My boss got me into this similar thing when I joined his recruitment business. And I was actually that bad at sort of writing. I didn't have that enough confidence. I actually, I paid someone to do my CV.

Did you? Yeah.

It was like 70, 80 quid. And I was like, yeah, why not? Do you know what I mean? Obviously I just blagged it as well. I was like, yeah, I did the CV, all that. So yeah, yeah, like fair, but I get the written thing, but I think there's definitely tools that people should use that can help support. There's going to be key things you're going to be looking for. Are they actually capable of putting things together?

100%. Yeah.

So obviously being in the recruitment game for a while, a lot to uncover, but obviously I want to really focus on the sort of AJ journey so far since 2015. Right. But let's just touch on James Leighton, early days being an employee, a recruiter in a few different recruitment brands. So I didn't actually realize that when obviously I prepared for this. I thought he was always like in the Manchester way, but obviously started in London, right? In like classic tech recruitment. Like how, like when you think about early days of recruitment for you, like what comes up for you? How, like what was difficult? Like how, yeah. How do you see the past?

It's interesting. I moved to London on my own as a young 20-something-year-old chap, and I got into a bit of trouble back home in terms of, like, I was from Burnley originally. There's not a lot of, in terms of industry there, so I knew I had to move out of that area to try and progress my career. And I went down to London and did— I met a rec to rec at the time. I didn't know they were rec to rec. I met a rec to rec and they said, look, recruitment would be great for you. You need to do this. And I'm thinking, fucking hell, this place is insane. Like everyone's got suits, ties, all that sort of stuff. And I went to like 5 interviews and ended up joining Portland Resourcing, but I had no understanding of what recruitment was. And they put me into SAP tech in Germany, which was an interesting, an interesting time.

Burnley lad taking over the SAP German market, mate. Yeah, yeah.

Honestly, mate, you couldn't fucking write it. And like, to be fair, They just give me like a XING license and said, this is at the time. Now I realize it's like a LinkedIn platform and you just need to connect with all these German SAP professionals and try and place them into, into global businesses. And to be fair, it was a massive introduction to the sector because 90% of the people didn't want to speak English to you. So you were just trying to get through gatekeepers in English and it was, wow, it was an interesting period.

I mean, yeah, but obviously you worked there for like nearly 4 years. So like, like, surely like what, that must have been a bit of a roller coaster, no? Like surely that must have been really difficult.

There's tools, like there was translation tools even back then. And so you'd put your emails through translation tools, you try and make an effort with the German culture. And the good thing about German SAP was that they're really, really disciplined in the way that they work. So if you do get a relationship in that area and a lot of these businesses, you know, we were working with like global companies, Coca-Cola, you know, the big, big businesses, a lot of them spoke English. Yeah, sure. The interesting thing is if they didn't want to talk to you, clearly their English got worse and worse and worse as the conversation went on. So it was easy to get pied in that world. But I think when I started out in that journey, my journey was slightly different in the fact I had to make it work. I was living in London, I had no money. I was like, I'm going to make commission here to just even get on the tube every day.

So you just like, you burn the boats. I'm sure you've heard that phrase before, right?

Pretty much. Yeah, we burnt the boats. There was no other option other than to make it success. And to be fair, it was a tough 12 months. It was really tough. But in some ways, I always say this to my guys as well, it's like, it's sometimes better when you don't know. I.e., you just throw yourself into it and it's the normality for you at that time. Looking back now, if someone said, go and do German SAP, I'd be like, I'd rather not. But at that point in time, it was needs must. Yeah.

So I guess interested, best piece of advice you got early on, do you think, that helped you?

Well, as we just said, be fearless. You know, the thing that we've started to see, and our training's definitely got better over the last 5 or 6 years, but is that we really look for that now in a person. Like, will they throw themselves into situations that are difficult and push themselves out of comfort zone? And I think I've always been pretty good at that in terms of just totally throwing myself out of my comfort zone and seeing what happens. And if I hadn't done that in that situation, I think the result would have been very different. It was a high turnover company that I worked for in the sense that it was really hard. International markets weren't easy back then. I think a lot more companies have gone overseas now. Yeah. And it's definitely become more the done thing. Back then it was like it was genuinely foreign. Excuse the pun.

Yeah, yeah. Fair. Okay. Love that. So talk to me about how did you then obviously go from Obviously, I guess I'm just curious on like how you dealt with transitioning markets, right? Interested in that because obviously some people obviously will think about that in their career or be quite worried about that. So how did you then end up going from that sort of world to then obviously by the time what you was in Michael Page or was it HR, GoRecruitment, you was already in the more property space?

Yeah, it's interesting. I did two tech companies, so I worked for a business that at the time were called Chapman Black. I think they changed their brand a couple of times, but I moved from Portland Resource into a business called Chapman Black more latterly and worked for a guy called Ezra Chapman, who was pretty inspirational and someone that really like drove me into a different part of my career. And I think through seeing people change markets there quite often, I thought, look, I can do any market here. And an opportunity just arose to join HR Goal to work on one account. It was like a big account management job. I thought, I fancy that. And so I tried it. At the time, I didn't see the relevance of me moving markets. I just thought it's recruitment.

Yeah, yeah, you can do that.

It is it is.

Yeah, yeah, I can do that.

But obviously now when people have started to niche markets a lot more, I think it's a lot harder for people to move between different markets. You're starting again almost. So that's the perception. But we've got a guy who started with those, Rick, who you've met, and, you know, he's on insurance, wasn't it?

Insurance, finance.

Yeah. Risk insurance, finance, financial services. And he is absolutely smashing it. It's 12 months in. So it can be done with a little bit of Strategy combined with a bit of elbow grease, to be honest.

Yeah. Well, let's just peel back the onion a bit on this then, because I think it's useful for people. I think obviously, I'm sure, obviously we're talking offline, like how difficult it is to hire for your business at the moment. But I guess any advice for anyone that like is maybe thinking, you know what, I want to stay in recruitment, but I actually like the idea of potentially changing markets or I'm concerned about changing markets. Like what, What advice would you give me if I'm making that transition or considering it?

Yeah, the advice I would give is that, you know, I'm always a big fan of just follow your gut. And I honestly think that it and tech recruitment didn't necessarily suit me. Look, I did all right, I build well, but it wasn't a real skill set match for what I've done, what I've now gone on to do. And I felt that the personality-driven markets were better for me, and that's why I ended up transitioning into property and construction. I think if someone's looking to move markets, you know, you've got to trust the process and you've got to trust that I'm a good recruiter and a good recruiter can recruit in any market. I say to my guys all the time, like, we've got to make ourselves the very, very best at what we do and that we can find candidates in any corner of the world, in any sector, in any market. And someone asks you for a, I don't know, a Russian astronaut, you should be able to map out that world. Who has the candidates that you can target? Who are the clients that would recruit those types of roles? And you should be able to build a market relatively quickly. The problem is generally people get into a bit of a comfort zone around the market that they're in and think it's too scary to go and do the, the other markets out there. But my, my understanding of that and my advice for anyone trying to thinking about moving markets would be you've gotta just throw yourself into these things. And you know, given the technology change recently, what we've found has been a big, big help for us is that we've been able to expand geographies quite seamlessly. And we've been able to do 30, 40, 50-minute check-ins with clients and have face-to-face meetings or online, which would have usually been in person. And so you can grow your market. We've got a guy that's just joined us to do exec search. He's done 75 meetings in his first 3 months.

But you couldn't do that in the offline.

Yeah, you couldn't have done that face-to-face. So, you know, the playing field has been leveled. To change markets. If ever someone was going to move markets, now's the time because, you know, it's quite saturated out there from a recruitment perspective, especially in the UK market. But the technology is there to support you being able to break into these customers a lot easier and build relationships.

Yeah, great point. Yeah, I think to round that off, it's just like, yeah, trust, trust that you can do recruitment, trust the process, as you said, back yourself on that. And then it's like, like you said, back to what you're looking for. In sort of people that early on in their careers, like throw yourself into it and learn, listen. I guess also there's, I just always hear it, it's just good advice of like, let people know that like, look, hey, I am building out this market. This is the journey on and bring these people on that journey because people are happy to help. Right. Yeah. So, okay, nice. I like that. So obviously then let's just fast forward a bit then, but keen to ask you, just interested, How so? Um, my— so HR Go then, was that like sort of corporate vibes?

Yeah, so they're, they're a big like branch mentality recruiter, so they do a lot of like driving industrial, other recruitment, and they managed to win like a huge property and construction account where they'd recruit all their recruitment for temp and perm, right? And obviously they had no one in their business that did it, and so they recruited myself as almost an internal external recruiter, like an onsite recruiter for this business. So I just spent all of my life, although I work for HRGO, working for one business as their internal recruitment company.

Oh, mad.

And it was like—

That must be really good experience there.

The best experience because—

Yeah.

And it's a bit of advice that I've given to people previously is, you know, there used to be a stigma around doing internal recruitment and these RPO type accounts, but actually I honestly think I've learned more being an internal recruiter for the period I was trying to get rid of my restrictive covenants whilst leading Michael Page than any of the external recruitment agency experience I've had. Because you understand about business, the way it ticks, the way that people make the decisions, why they make the decisions they make, and also the inner workings of how a talent strategy and a HR strategy work.

Let's just talk about this for a second, then we'll go into the AJ story because I think, I think it's useful and I'm sure I don't know if you do a bit of this. I know that when, obviously when, 'cause I know quite a bit about your business. I know that you have different services, right? But I don't know if you've noticed more and more recruitment businesses like offering this sort of talent partner solution. Like, you know, I'm sure you've seen that where it's like James Layton partners with X company via Anderson James. Do you know what I mean?

Yeah.

So I feel like more and more agency recruiters one of the solutions or problems they're trying to fix is the things that you were just talking about, the inner workings, the actual HR problems, the, the talent strategy problem, all of that. So I guess thinking about this for a second, from your experience, what are some of the things I guess people assume about being in that world, an internal recruiter, whatever you want to call it, that probably people get wrong? Because I think it's easy for an agency side to go, ah, James, the talent manager for, yeah, Wilmot Dixon is, he's slow, he never gets back to me. All he cares about is pleasing the people. I don't know, do you know what I mean? Like we can make loads of assumptions, can't we, in agencies. So like what are some of the assumptions that you think people get wrong a lot of the time because you've been in that seat?

And there's a couple of points on that and things that I think about. One is that it's a harder job than anyone will ever imagine because you get pulled from pillar to post internally as well as externally. So you've got a lot of stakeholders to manage. I think the challenge from a recruiter perspective is if you saw what went on inside some of these big PLC businesses, you know, Wilmar Dixon were a billion pound company and the just volume of sheer volume of recruitment that they deal with on a daily basis is crazy. When I went there, they were one of my biggest clients at Michael Page and I went there as their internal recruiter and I thought honestly, I was thinking, I've honestly got this place tied up. I do all their recruitment. And you get inside and realize, wow, my tiny, tiny percentage that I used to bill in this business, there's thousands of recruiters making $200,000, $300,000, $400,000 out of them. And I'm like, you honestly just think from a perception. And it's something that I tell my guys all the time is like, don't ever assume that you know everything about a business because clearly when I've gone internal, you're like, wow, I am small fry in this place. Like in terms of what I've done for them. But the external appearance, or what I thought when I was at my page, was like, we've got this sewn up, we're doing all their recruitment, there's no infiltration, there's no leakage to other agencies. That was ridiculous. I was like number 20 in the list of agencies that work with them.

That's nuts. And I think, yeah, I think people can, that's where I think people go wrong when it comes to like expanding accounts, right? That they can assume like, like you just said, yeah, I got this, this client suite in the palm of my hand. I looked at a lot of their business, but maybe thinking back, you could have probably asked a few more questions or been a bit more curious maybe to find out and realize actually I'm only doing a sliver of what I could be doing or what my wider team could be doing.

100%. And it's that classic, isn't it? Mapping out a market properly. And when someone's giving you roles, asking that one further question to say, well, what else is happening in your business? Who else can I connect with? Who else can I speak to? And generally, because you're doing well with one contact, you can sometimes get a little bit lazy around that and think, well, we're doing really well, let's just carry on as we are. Yeah.

Yeah. That's really interesting. Any other headaches that people may be addressing? One, a common one that I've heard, I don't know what your experience was, was that whole like internal stakeholder management. Like we've had a few agencies recently join Recruitment Mentors who their whole model is that talent partner model. And one of the areas that they want sort of to develop or advice on or hear how other people are dealing with it is that internal talent, is that internal stakeholder management. I think that's a completely different ballgame in that I feel like.

Yeah. So we do outsource stuff here and it makes up nearly half of our business at the moment and it is totally outsourced recruitment. So we're basically act as the internal recruitment function of a business.

Okay.

But when I was at Wilma Dixon and taking the knowledge from that, what you realize is that recruitment and you've always got to remember this, recruitment makes up about 1% of someone's job generally at the board level anyway. And so they just want that headache taken away from them. And you've got to find ways to make that as seamless as possible for the end user and also put them at the epicentre of the problem. So actually think, well, that person hasn't got time to deal with me. I need to do all the due diligence and everything that I need to do within this process to make it smooth for them. And if you do that, generally the people that did the best with me from an agency perspective were always the ones that didn't keep hounding. You didn't keep hassling, you didn't spectre, you listened to what you asked. You know, the amount of times I'd say to someone, 'Can you just stop sending spec emails in because we just don't look at them?' And 5 minutes later you'd get another one. And from an internal perspective, you'd think, well, that's fine, like you carry on. But it just proves to me that you can't listen. It's nothing to do with the power of the situation. It's just you can't listen. And therefore, if I give you a brief, are you going to even listen to that? Is it just going to be send CVs willy-nilly? So I think quality is everything. And when you work in an internal recruiter, the scale of quality from agency to agency is vast, you know, from the really poor quality agencies right through to the very good ones. The actual gulf of quality is crazy to watch from an internal perspective.

Interesting. So let's, let's unpack this, your, your business journey then so far, right? Because I know there's been ups and downs and I feel like obviously, yeah, obviously I've known you for a little while now. I do feel like I do feel like whenever I've spoken to you recently, you just seem really positive about what the future looks like. And is it fair to say maybe you might have turned a bit of a corner really in terms of like what's going on and how things are looking?

I was thinking about this. Yeah, before I came on today, I was thinking about this and I was thinking, you know, where should I position the journey? And I think the best way for me to do that is to be candid in the sense that we didn't take an investment when we started. And I really thought about it was as I was setting up, we really thought of an investment. I spoke to actually Ezra Chapman-Black, I spoke to a few other like angel investors and we decided not to take investment. And I'm really pleased that we didn't take investment. And for those people that are out there thinking about setting up their own recruitment companies, whilst everyone's got different circumstances, if you can avoid investment, I'd avoid investment. And the only reason I'm saying that is because I've quite enjoyed the struggle as well as the joys and the successes that we've had of how does finance work, how does it work, how does the back office work, how do we send invoices out and actually creating that infrastructure over the 5 or 6 years whilst it's been a pain in the arse has been a really, really, really good journey to go through. Yeah, because I think it's really rounded my business acumen for a start. And secondly, you understand each, each facet of your business from day one. You have to. You've got no choice. You've got this yourself, I'm sure. But we didn't take investment and obviously cash flow was a massive problem. And I think in the early days we hired someone in month 3. I hired Steph, who'd worked for me for a long time at Michael Page, and we hired her after 3 months. And whilst looking back, it's the best thing I ever did hiring Steph. It's also ridiculous to think we hired someone when we didn't even have—

Well, what gave you that? What gave you that fearless? Then to do that? Was it naivety?

Yeah, yeah, it probably was. It's probably a bit of naivety, but it was just I always wanted to grow a business and I spent 3 years of our journey thinking headcount was the thing that we would measure our success on. And as you get into the 4th, 5th, 6th, 7th, 8th year, I'm sure headcount becomes irrelevant and business performance becomes more important and how you're performing from a profitability perspective becomes more important. But in the early days, like, I I honestly just used to be like, it's the age-old, isn't it? You go to a bar and you meet an old mate who used to work in recruitment. How many heads are you now? It's the first question.

Why was you caught up on that, do you think?

Ego, mate. I think, yeah, like we got told from most of the people when I was about to set up from a previous business that it'll never work and you've got no chance, you'll be back here in 2 years. And that negativity and that ironically, that negativity has really driven me.

So I'm going to prove people wrong.

Yeah, yeah, absolutely. Thank you to those people. But it also creates a bit of an ego, which I've managed to rub off over the years. But in the first 2 years, it was like, we can take on the world, we'll hire loads of people, and it's not as easy as it looks.

Yeah, fair enough. So let's unpack this a bit then. So obviously early on, so obviously you started with one other person, right?

Yeah.

Decided not to take investment, hired obviously someone really early on. I guess like hindsight's a great thing, right? Like, what are some of the things that we would do differently, do we think, if you were to start over? That's what people, I guess, want to learn from or find out. Knowing what you know now, how would you approach things differently, do you think?

I think, I think the number one thing that I would do is build up. If you've not taken investment, if you take an investment, you should know what your growth plan looks like and the triggers for that growth plan. If you are going down an organic route, which is what we chose, You need to think about— everyone talks about business plans. I never made one. I've got one now, but I didn't have one back then and I still wouldn't have one now because the fluidity is very important at that stage. But if I was to look at sort of when I would hire, I would build up the bank account, I would build up the, like, the amount of money that we had to play with and I'd spend 12 months just billing and then focus on all the other things first. I suppose what you end up doing is you try and create a business that's fully functional, that's PLC, that's got everything it needs in the first year when you should just focus on doing the job and billing and making some money and putting it in the bank and then understanding what you've got to play with before you start making hires. Whereas, you know, we were month 4 already starting to think of how are we going to make payroll this month because we put ourselves in such a tight spot from a financial perspective because we had to build to just make payroll and you know, we weren't in a position financially where, or I wasn't anyway, where I couldn't have been paid for the first 12 months. So I hadn't given myself a buffer. It's burn the boats, right? That's the old mentality. No money in the bank, nothing going on. We have to build from day one to make this work. And what we did was we just sold clients consultancy services. We wrote job descriptions. We honestly just did whatever we had to do to make things work in the early days. And I spent a lot of that first 6 12 months pitching clients for new ideas and trying to get some partnership stuff going. And it was really successful, but it was really stressful because we put ourselves under pressure with hires from month 3.

Yeah.

So like month 3, month 5, month 6, we were already hiring people. And I honestly think that that's prevented us from growing long term because we've had to redo a lot of stuff in year 3, 4, 5 now to give us that platform. And so, so my advice to anyone would be build up your cash reserves, make sure you've got a good runway for someone. I generally look at a 6-month, 8-month runway now of overhead costs in the bank.

Of them like, so then providing, contributing at all, basically like they've got 6 to 8 months. I'm not, yeah.

Yeah. Yeah. And, and from a cash perspective, we always have 12 months worth of overhead in the bank for our whole business to make sure that whatever happens, We've got 12 months. If we didn't build another penny now, we'd have 12 months of runway. And that's a position you build up over time. You're not going to get that in the first 2 or 3 years. But the one thing is, is to make sure that you have that runway of cash. The second thing is partner with the right clients. And I think people lose sight of that massively. So we partnered with anyone that would work with us in some cases, and we would just do whatever we needed to do to make, make revenue in the first instance. And there's bad clients and good clients, right? Bad pound, good pound, as I call it, with the team and actually partner with businesses that share your values and partner with businesses that generally are nice to work for. Because what we didn't realize is we did loads of revenue with people in the first year. They wouldn't pay us. We couldn't get a hold of them. They didn't like working with, you know, it was, it was a forced relationship because we were chasing revenue. They were just trying to get a quick service and it it was a bit, in some cases really good from the partnership stuff we did. In some cases, the one-spot work that we did with clients ended up in tears every time.

Really? So I was going to ask you like, so how would you describe bad pounding? Because I think that, I think right now, I'm sure you agree, a lot of recruiters could fall into the trap of being busy fools and there's loads of live jobs at the moment. And like you said, working bad pound jobs. So like you said, Yeah, clients you enjoy working with, clients that actually pay you, like what other things could contribute to bad quality, you think?

So, I mean, we do this in training a lot with the guys, but just having good quality jobs, you know, like we were working with businesses that we knew had bad reputations at times, that we knew were struggling financially, that wanted to drive our rates down to lower than we were prepared to work at, that you know, when someone drops your service fee or someone wants to drop a recruitment fee at this stage in this market right here, right now, you've got to ask yourself, why is that? And what level of service are they looking for? Because for me, learning from the first year, we just was hanging on to any fee and anything that we could get hold of. But we were working multi-contingent jobs at times. We were working stuff with clients that we knew hadn't got a great reputation. And it does nothing for your reputation to work with businesses like that. So, you know, after 6 months of doing that, we were just like, right, we're just going to work with businesses we like. And we just took a no dickhead policy, really. Like, we're not going to work with people that we don't want to work with. And it's the best thing we ever did. Because if I fast forward to month 6 to 12 and onwards, we just worked with 3 or 4 really good businesses. We got a really good relationship and they're still our biggest customers of today. So the ones that we created in the first 12 months are still our biggest customers now.

And then let's, let's just describe really quickly because everyone, this is subjective, right? But I think it's just good to hear different people's point of view. So just to make this really clear, how would you describe a good client, a committed client of interest? What other things do we want to look for right now that could give us that confidence?

I mean, I'd probably give you a different answer 12 months ago, but the market is so busy at the moment that I think a good client has to be mutually invested in the relationship. And I talk about this as like shared equity in the process. So if they aren't showing the signs of commitment they need to, to recruit the right person, typically those things fall down at the end of the process. So, you know, if I look at our work at the moment, we're probably somewhere in the region of 65%, 70% retained at the moment as a business because, and you know, I know what people will say, Yeah, but at your level recruitment, because typically our work is 60K plus and people will say that that's an easy market to retain. We've also started doing 50, 40K roles retained as well because someone wants to recruit someone. And I just think of this from my own perspective. I retain a business in Manchester that does all of our recruitment for us and no problem. If I'm going to hire someone, then it's the same fee. It's just structured in a slightly different way that gives everyone equitable value in the process. So we're just starting to test that commitment through pitching a retainer. Now, I was always taught at sort of businesses I've worked previously, like pitch the top service that you offer because the only way that that can go is that they'll come down a level. So we've always pitched retained as a model to every role. And if that doesn't quite work out, well, you'll end up with an exclusive job. If you retain, if you pitch multi-contingent recruitment, you're unlikely for the client to turn around and say, here's a retainer, congrats.

So shared equity in the process. So these clients invested in the process, coming back to you when you agree things. And if, if this client seems a bit disengaged early on, there's a good chance that, yeah, that things probably aren't going to go to plan to the end. And this might be a job that could actually hoover up a lot of my time, which isn't going to be good.

Yeah, we do it. We do a lot of tests in our business. I don't know if other companies do this, but certainly we test that commitment with a new relationship all the time. So we'll set some pre-agreed dates. We'll also send a test CV just to make sure that we get feedback on that CV. So rather than go out and do 2 weeks worth of work, which you're typically going to do on a roll, send a shortlist and then realize that the client's not coming back to you. We'll send a quick CV in the first 2 or 3 day window and say, 'Can you just give us some feedback on this?' If they never respond or we don't get any feedback, we understand then that they're not committed and we'll pull the plug on the process.

And I love that. Let's talk about now quickly then. I know we're getting practical, but I think it's really useful right now. Like you just said, pull the plug on the process. How do we go about doing that? Because I feel like I'm sure you've seen in your team, it's quite hard to say no, right? Or quite hard to say, 'I'm not sure. I'm not sure this is quite working out, James.' Like what, how do we communicate that?

Well, there's two ways. So we send the test CV. We should have pre-agreed that on a call that actually we're gonna probably send you a couple of options to make sure we're on the right lines with the, the search, et cetera. We'll wait for you to come back until we, until we start a search. So if you don't get that feedback in the timeframe that you've agreed with the client, you don't really have a further action there. It's just until you come back to us, we are not starting on this role. And generally it's like the thing that I think we are doing a lot of at the moment is taking it away from customers and saying, look, it seems to me that you're not quite committed to this process. That's fine. Like, and by all means, we want to support you long term. However, right here, right now, it looks like you're not quite ready for this. So when you are, please do come back to us and you'll either get two responses there. Well, we are ready. You need to crack on. Or yeah, fair enough, actually. Thanks for giving us the candid feedback. We'll come back to you when we're ready to, to make a start on this.

Yeah, I love that. That's great.

Okay. And, and it happens all the time. We had one today, which is a real live example of, we had a retainer proposal out for 3 or 4 roles. We thought it was nailed on. The client thought it was nailed on. They pulled it because the funding wasn't available until 3 weeks' time. No problem. How that had worked on a contingent basis though, is that we'd have done all the work and then they'd have pulled the plug when we'd done all the work. So, Yeah, I think recruiters of today and the modern age recruiters should be valuing their time more than ever before. And if, and if they're not, unfortunately there's going to be a lot of rabbit holes you go down that have no success. And that's not good for candidates. It's not good for clients. It's not good for consultants. It's not good for anyone in the process if everyone's wasting time.

Yeah, for sure. All right. So we've spoken quite a lot about retained. I'm keen to like just dig a bit more into that, but Before we do, let's just talk about, I guess, let's just zoom in a bit on like the last maybe like 2 years or so. Let's just like, because I feel like, yeah, I'm interested to— so how would you, how would you describe the business before, like, as you were going into like COVID? Would you say like, how would you describe the business? And then let's talk about some of the things that you've learned, changed, that you feel have had a— because yeah, describe the business was before we went into COVID?

Before COVID to be honest, we, I had a bit of a, me and my business partner then, and we'll come back to that, but me and my business partner then were just having a bit of a lull at that stage. We were growing. So we've grown 25, 30% year on year, which has been fine and it's been good.

Like revenue, revenue, like top line revenue, revenue, profit, profit, headcount slightly over that.

I think at that stage before COVID even happened, we were just having, I remember at the Christmas before COVID happened, we were like, Hmm, are we feeling this? Where are we at? What are we thinking? And we never had a plan. So it's like I heard on another podcast the other day, you know, for me it was like climbing Everest and we didn't really know what we were trying to achieve. So we got to the top of it and it was like, well, what's the top place to be when you've got people that you're responsible for? Yeah. And you've got to put a good face on for people. And I think the one thing that we've always been is really transparent, really open with people. But it just felt like it was lacking a bit of purpose at one point and I was burnt out. We'd worked really hard. We hadn't taken many breaks in that period to get the business off the ground. And actually COVID was, was a blessing for us other than the obviously horrible health things that have happened in the businesses and stuff. And some of my friends have got hospitality recruitment businesses. So I really did feel for them in that period. But for us it was a real line in the sand, what we're doing next. And as we entered that period, me and my business partner decided that we were going to part ways. Because I think what was happening is that we were pulling each other in other directions. So I was trying to pull to grow the business. He was trying to pull to make it more lifestyle. And it sort of put us in a bit of a lull period for the year that I talked about. And I think it was the right decision to say, well, if you want a lifestyle business, you can do that. Like we both value each other's input to what we've done to this point, but I want to go and scale. And at that point we're about 8 heads, 9 heads.

Yeah.

And it was like take someone on, wait for them to bed in. There was no real strategy to what we were trying to achieve. And it was just felt a little bit like going through the motions for the last 12 months. So when we, when we separated, obviously COVID hit and it was like, right, we're in a world of pain here. It's not a great time. We took a brave decision, as did Andy at the time, and he's gone on to do great things and we've accelerated everything in our business since that point in the sense that it was probably what we needed for a catalyst to go, right, what are we trying to achieve? Yeah, plan together. And COVID gave me like a reset. I don't know how other people feel, but it gave me a month where I couldn't do anything. So I just reset, wrote a business plan, got all my ideas down. I thought about how we were going to rescue what I thought was going to be rescue the business at the time because I thought we were going to— I thought we were going to go pop at one point because you're just thinking, well, if this market doesn't come back, for another 12, 18 months, how are people going to survive? But actually our market came back really quick. We were really fortunate. Our key customers from the early years really bailed us out and we've done really well ever since. But we're now on a proper plan, proper budget, proper financial plan. We invested in a non-executive director who put us on the right, right path. And I, I spent a fortune. I doubled down on every single part of our business technology. We bought loads of new systems, we bought loads of things that we would upskill the guys. We did lockdown training sessions twice a week with the guys so that they just kept fresh while they were on furlough for a couple of months. And it's the best decision I ever made. Like, it was risky at the time, but it was either we double down now and we go for it, or we just accept we're going to be this 8, 9, 10 head business. And it wasn't something I was up for.

Right. Thanks for sharing that. I think a lot of people will relate to that. So a few things I want to unpack here. Thinking about that period where obviously, yeah, ended up being a bit of a reset for you. What were some of the, like, the important questions that you asked yourself? Because I think, like, a lot of this sort of stuff can come from great questions. So, like, these are questions that people listening to this could start— because I think that's such a horrible position to be in, isn't it? When it's your business and you're like, I actually don't know if I actually like the business and what we've created here. So like, what questions did you ask yourself which helped you start realizing what you wanted things to be?

Yeah, well, luckily we had a great— I had a great relationship with Andy, so we did a lot of this together in the first instance, and then I separated out my thoughts. But the thing that I didn't have at that time was a purpose, like where we're heading here. Is it just a case of we just slowly but surely trickle away and make get this business into what it is because it just, it never felt like it could grow past 8, 9 heads. It felt like it was stuck at that level. And, but it was still in a weird way tying me down. It was still, I had to be in the office every day. I had to be there for the guys. I had to make sure that, you know, we had enough revenue coming in. It was almost like stuck between a lifestyle business and a growth business. And so the questions that I asked myself were, am I enjoying this? What's my purpose and what's the purpose of our business, what we're trying to achieve and where is, where is it heading? Like, what do we want to get out of it? And what I realized is that, and the big learning for me in that whole period was twofold. One was you need to have a plan of what you want to get out of it, but you've also got to accept that you can't just drive everything towards an event. There can't just be one target and it can't move and it can't be fluid because it's like that Everest mentality I just said, like you're climbing up Everest and you don't actually know what you're trying to achieve at the end. So you need a bit of a plan and a bit of a structure in your thoughts around what you want to achieve. But actually it's got to be fluid so that you're enjoying the journey, not just enjoying the destination.

Yeah, it's about the process. Yeah.

And like, I wasn't enjoying the journey, I was hating the journey and I had to be quite honest with myself. Why am I hating the journey? And it was generally I'd not enjoyed the person that I turned into and I'd not enjoyed the business that we created at that particular moment in time. And it wasn't, toxic and it was fine and everyone in our team would have not known what I was going through mentally at that stage. But it was just they were happy, but I wasn't. I was sat there thinking, this is not for me. And I employed a non-exec director. I got a personal coach, I got a business coach. And actually over that period of time, I've really, really like discovered what I want to get out of this.

I love that.

So yeah, it's been good.

Would you mind sharing, like, you don't have to go into like numbers and everything, but like, I think sometimes people will think, okay, well, I'm going to sit down and think about what the business is going to be turning over revenue-wise, what all that. So like, what are some of the— I know you said it has to be fluid and I really like that. So obviously it has to be ever-changing, but you have to have some sort of like north star that you are aiming towards. What are some of the things that you're aiming towards in terms of— is it revenue? Is it headcount goals? What are some of the cool things that—

yeah, there's a couple of— yeah, there's a couple of bits. Um, financial, yep. We wrote a business plan financially. That was the first point and that was the staple diet of we needed the financials to support the growth plan that we wanted to achieve. So I made a decision that it was going to be a growth business and I made a decision that I was going to take less money, I was going to take less profit out of the business and I was going to invest a lot more.

Okay.

And in order to do that, we had to get the numbers to where we needed to get them. So at that stage, so if I go 2019, our year to date was about 700K or something in that world, 750 in NFI, which is which is not great for a 3-year-old business. But since that, you know, we decided that last year we wanted to beat that, which we did. And then this year it's— we're on a financial business plan, which is 1.5 million NFI, 2 million NFI, then 2.5 million NFI that will end up landing us at £1 million net profit is the plan. Okay. And the reason for that was we realized to keep our staff happy and we broke into 3 key principles. Some are a bit corny, but like we worked out what does our business want to achieve? We want to be, do right by people, which we've always done. Small things, big things, everything. But if we're going to do right by our staff, what does that mean? Well, they've got to be paid well. The commission's got to be great, which always has been here. Got to give them training and development, progression plans and a roadmap to success. What their success looks like and We didn't have that because clearly a roadmap to success means we need growth because we can't afford people manager roles and director roles and all the other things if we don't grow. So we needed to do that. The second thing was around like quality, not quantity. Right clients, right people, right staff, right processes, right infrastructure. And so we built that out as a plan. And the third thing was like atomic habits or effective habits of just what the day-to-day processes look like and making sure that they're ingrained in our culture.

Standards. Yeah, I love that. That's awesome. I have to ask you, I'm going to ask you about you and non-exec. That's a common question I get. I know we've spoken about things like that in the past. Investment in like another common question I get, like in that decision of like, right, instead of taking, I'm going to be investing more, investing more to grow more. What, what like tools, tech and stuff have you invested in that has had a real impact on your business?

Well, the first thing that my non-exec said to me when we started on our first call was two things you don't change in this industry. One is the commission structure. Two is your technology system. So your CRM. So the first two things that I did was I changed my CRM system and I increased my commission structure. So, so obviously good at taking feedback. But we implemented Vincere right in the heat of lockdown. We decided that it was the right time. The old system that we used was clunky. I'm a real, real, real believer of Vincere as a system. And if I was, I must have recommended 20 people to Vincere over the years because I think they're going to change the game. And I can say that wholeheartedly, having used Bullhorn and another product I can say that Vincere is number one in that world for a growing recruitment business because it's intuitive, it's got intelligence suites, it's got everything that you probably need to scale.

It's a whole operating system, not just a CRM, is it? Is this the whole point?

Yeah, it's brilliant. And they're brilliant. Like, you know, Eloise and the team there, they're great and they're always there if you need them for anything.

So any other tools that you've invested in that are sort of non-negotiable for you, do you think?

Yeah, we got told by our clients that Oddraw would never work or video technology would never work. And I can wholeheartedly say that they all love video technology now in their recruitment process. It saved them time. So that's been good. We use SourceBreaker, which has been a game changer for our delivery function. So the outsourced part of our business because it just saves them hours and hours each day.

Yeah.

And the latest one that we've used, we're just about to launch New York. Well, we have launched New York, but soft launch at this stage. So by the time the podcast comes out, it should be out there. Zoom info, one of the best things I think I've ever seen.

In America. America. Yeah. So if anyone that doesn't know, it's like, yes, you can get obviously contact details and customer information and obviously UK versions that popular ones are like, yeah, Lush, you hear a lot. You've got things like LeadIQ, Seamless AI, a few things. Yeah. Absolute no-brainer if people aren't looking at these tools, by the way.

Yeah. Yeah. Well, the ZoomInfo thing as well, they've just bought a business in Europe, which means that they're downloading thousands and thousands of records. But in America, if you're going into America without ZoomInfo, yeah, they're struggling. I mean, well, it's just, I think it must level the playing field with any big global business that are out there already because it's for sure. There's not a contact on there that's not got mobile number, email address, contact details. It is insane.

Yeah. Okay. So before we finish, I just want to make sure we sort of made this crystal clear for people. So common question I get are, as I'm sure you'll be aware, most recruitment agencies in the UK are at the size of what you're at, right? Before, previously, in terms of like around 10 people, right? So let's just say I'm someone that owns that business and I do want to grow. But I am yo-yoing all the time. I'm not sure what the next step is. Obviously, as I said in the intro, you're at sort of 16 people now. And I know, as you said offline, like you're in a position to grow that even more. It's just obviously getting the people. Like if I'm listening to this right now, what, like what things do I need to sort of start immediately looking at and maybe taking action on that could give me, put me in good stead to like go from 10 to 15, 15 to 20? Yeah, that you've done?

I think the best thing I ever did from a structural point of view is write out where your prospective heads would go. So, okay, for example, when I was at 10 heads and I'm sure people are like this, I was like, I don't even know how these people get to 100 heads. Get an org chart and write down exactly what markets, what specialisms, what areas of the country you would put people into, or internationally if it's international. Because when I did that, I realized I didn't have enough divisions and enough niches in order to be able to create enough headcount. That was the number one thing that I did. And that just visually gives me something to— I'm a visual person— to look at a structure and go, wow, you could get to 50 heads here with all these different markets. That was one. The second thing, which I think was quite important, was build your infrastructure as if you're going to be a 100-person business. So at the minute, I've built our infrastructure as if we're going to be 50 heads and therefore you put yourself under a little bit of pressure when you start buying SourceBreaker and all these different tools. You think we are set up now to be able to be 50, 60, 70 heads. Everything's set up now. We've got an FD, we've got finance, we've got it, it, all of it set up. But I think what people do and I did is you start to hire people before you're ready and then nothing's in place. Your induction's not working, nothing's actually there. So I think for us it was about getting ready before we started to hire people. And then the third thing is you've just got to trust in yourself and have the confidence to do it because 10's a really comfy amount where you're making good numbers and you're making good money. As you start to break through 15 heads, your profit margin does erode slightly.

Yeah, I'm sure you expect that. Like you said, like what you've done, right? You've invested to grow more, right? Rather than make more money, to take more money for yourself and whatever you're doing with it.

But go back to that, that thing that we said about understand what you're trying to achieve, because if you're just trying to achieve a profit-based business, don't grow. Like, stay at 10, 12, 13. Yeah, yeah, you can make loads of money out of doing that. But if you do want to grow, you've got to sacrifice. It's the same as anything, and the sacrifice is typically the owner's profit. And like, if, if that's the case, then the money that I take home is a lot less than it was, but it's because I know what I'm aiming towards now.

Yeah. Brilliant. Before we finish then, I have to ask you, because you've been really open on this, I wanted to, I guess, just really ask a question or try and uncover it a bit. You said a few times, obviously early on, mentally it was stressful. You said obviously at that period where you had to reset, you invested in yourself as well as the business. Just, I guess, what, what things have helped you mentally, like, get through things? Because I know you said obviously before we started, like, obviously thinking about the dark days and stuff like that. So get just curious, like, again, like you said, like, as the owner, sometimes you put that pressure on yourself to show a brave face. Like, people wouldn't have known how James actually felt about the environment that he's, he's built, or that you weren't satisfied. Or fulfilled. Yeah, I guess just talk to us about that process of like coming to terms with that. And then I guess, yeah, maybe just talk a bit about— because people might be feeling like that and sort of there might be some things in there that could help people move forward or take a step in the right direction that could help them mentally.

Yeah, I mean, if you're a business owner out there and you've not had investment and you've got no non-executive director, the world can be quite a dark place at times. I mean, you're constantly thinking about next this month's bills, VAT, tax, these things. And it can weigh you down a little bit and just your thought processes can start getting slightly warped around. There's a lot of things to think about and a lot of moving parts. And I think the thing that really helped me recently and helped me at that period was having a business partner, great understanding guy. We talked a lot. He was really supportive and we were supportive of each other. So that was great. When I've lost the business partner, I've had to plug that in with some external help. So I've got a good network of people yourself, like everyone in the network that I have now. You could lean on people for advice, but having a personal coach has been the best thing that I could have ever done in terms of just— it's like having a sparring partner, right? You let your frustrations and you can vent about how you're feeling about stuff. And I think there's a bit of a stigma, especially with blokes and other business owners that I know. This macho, you've got to be looking like you're successful at all times is key, but it's not actually. And I think the more that people get in tune with how they're feeling, the better it becomes. And I'm the happiest version of myself that I've been in as long as I can remember for the last 2 years. And I'd, I'd say that's because I've built the business that I now want and the business is doing well and I'm enjoying the journey of building and the process of that.

I love that. What about, is it, has it been doing, going on that journey, has it helped you personally as well and your personal relationships out of interest?

Yeah, definitely. And your personal relationships are the ones that get hit the hardest when you grow a business, right? Because You know, my mates were like, is this guy even still around? Because I was just nowhere to be seen. I was working, working, working, working for the first 3 years and I've managed to get some balance now. And I think productivity now has become the key word for me is, you know, if I'm sat here just to show that I'm in the office for 12 hours, I'm doing something wrong. Like my hours are literally blocked out. I'm a master planner and I make sure that our team now aren't sitting in the office at 6, 7, 8 o'clock at night anymore.

How did you— before we finish, how did you go about finding a personal coach? Because that isn't something that maybe a lot of people have done.

To be honest, it was network. So someone recommended a guy to me that they used and I ended up having a first session and we just got on and it's— and it's snowballed from there really. But I've also started some business coaching recently, which they're very different processes. The personal coaching is just around mindset really, whereas the business coach, it's just around benchmarking ideas and making sure that you're not going to go down the wrong path. I think the biggest problem when growing a recruitment business is you go down a lot of rabbit warrens that don't come to anything, and then you have to reverse out of it and it might take you 6, 12 months to realize you've made a mistake.

So yeah, I love that. And then just, just find it curious, like, what do these sessions actually look like? Is it just like Are they asking you questions? I don't know, just, just to paint a picture for people.

The personal ones or the business?

Either.

Yeah.

Just to give us a bit of a snapshot.

So the personal ones are generally sort of talking about how your week's been like, I mean, to start off with, like, what are you trying to achieve? Like you would with any sort of session. And then when you transition into the day to day of it, it's just how's your week been? What's been the challenges? How have you overcome them? How have you felt about them? And it really just— the way I describe it is it untangles your brain.

Yeah.

If you've got 1,000 tabs open in your head, it allows you to close 900 of them.

I love that. And then the business coach, there's just more business context and a bit more business professional chat.

The thing with the business coach, and it sounds like overkill on coaching, it's not. It's an hour, sometimes an hour a month in some of these things. But it's someone to keep you accountable to do the things that you know you need to do that you don't want to do.

Yeah. And you haven't got a business partner who'd probably help you with that, right?

So it's like, what do you actually need to do? And we created these 3 key principles and it's sort of, right, what are the projects that are going to spin out of that? Well, we need to put an AJ playbook together on sales. Okay. That's not something that I'm going to sit there and do unless someone makes me accountable for it. I know it's, but I know it's important, but I'm just not, I'm not going to sit and do it unless. I know there's a benefit to me. And so it's just like, oh, that date's coming around again. I better get some of this work done. And it just keeps me accountable for what I'm doing.

I love that. And then final thing, I know we said I was going to ask you this. I know a lot of people will get value from it. Obviously I saw not too long ago you had multiple people become shareholders in AJ. That must have been a proud moment for you.

Yeah.

Could you just talk to us before we finish just a bit about, I guess, how you structured that? I don't know, just tell us a bit because I feel like a lot of conversation I had recently with agency leaders is like, for those that do want to grow and maybe achieve some sort of event or they are thinking like how they could sort of get in the position where they're like very much maybe become a chairman of their own business and other people are involved. Like, could you just tell us a bit about how that's structured and how these people could, yeah, how that all works?

Yeah. Yeah. So Effectively, I used to own 100% of the business. I've, I've dissolved some of my equity to give it out to our leadership team currently, but the plan is to give it out to the wider team. So I've put that equity in a pot for the leaders of our business and I've divvied that up and said, look, these are the divisions that you run. This is where we want to get to from a target perspective as a business. I'm going to give you this equity today and then you can grow that equity in our business over a course of 3 to 5 years.

Love that.

So that was the first thing. And that's not just for clarity, that's twofold. We've got an EMI scheme for staff so that they can own shares in our business. And this is equity. So I'm basically giving out—

Yeah, yeah, yeah.

It's different. So, and it's important for me that I bring people on the journey with me, that I'm not just this person that takes, takes, takes, takes, takes. And I've become less money motivated as the years go on. And it's all about building this sustainable business now. And so, you know, I brought obviously Steph, our first ever employee, started as a senior consultant, now runs her own business unit and she's got equity. Rick and Marcus. Rick I brought in from Oliver James 2 years ago. He now owns a good size of the business and runs our sales function. And Marcus, who came in recently, is going to be in charge of our exec search practice. And so I've got the 3 pillars of my business now that I'm going to build out people through. And then people like Alicia that you've met is on a trajectory now to get herself into a position to get some EMI shares. And over time, what I'd like to do is that the team own half the business.

I love that. Yeah. Anyone that's like thinking about that, I'm sure you'd be happy to get in touch with you.

Yeah.

I think I— and I guess to wrap this up, like how— what have been the positives that have come out of that so far? I feel like that would be such an uplifting optimistic thing to have given to you or the option. What's been the impact so far, do you think, from your point of view?

Yeah, the impact's been great. However, like to go back a step, I've not given that out as an incentive necessarily. It's twofold. I've given it out as a reward for real hard work and dedication, but I've also— it's incentivizing them for the future. But the thing is, there's nothing better, right, than feeling like you've got the ability to open part of a business. So there's no one sat out on our sales floor today that can't have that same situation happen to them. And that's important to me because I got given that opportunity early on and I've taken my opportunity, but I want to be able to share that success. I think the positive thing is, is that it's really, really glued our culture together. Yeah, if it needed doing. But it just feels like everyone's on the bus in our business.

Yeah. And everyone's like you said, you've nailed down what that purpose is. And yeah, people can really see that and they're all going in that same trajectory.

Yeah. And also it's given real accountability through the structure of our business now that I don't run any part of our business. I just help the guys with what they need. So if Steph needs me, I'm around and I do a lot around the podcast now for our client base, etc. But my role now is just to outwardly present AJ and I've become a recruiter, an internal recruiter. You know, I'm just recruiting people for our team though.

Love it. James, been an absolute pleasure. Thanks for being super open, honest.

No worries.

Really enjoyed that. Thanks a lot.

Cheers, mate. Thank you.