Sebastian Petitti - The systems and processes required to scale

I left uni when I was 21, and if you're then coming out, right, I've got to put the work in to get there. No one's going to give it to me. If you want to be successful at something, you have to work hard. You have to be prepared to do it. Expect to be a sponge for knowledge. You're not going to know it all, especially at 21.

Welcome back to another episode of the Recruitment Mentors Podcast. I'm your host, Hishem Azzouz, and on this week's episode, I was joined by Seb, who's the managing director and owner of Revorec Recruitment. You've been in the industry for over 10 years, so first year revenue was around £170,000. £45,000. Second year, the revenue was around £290,000. Third year, £350,000. Most recent year, £1.4 million. Now, in this conversation, Seb is a super honest and authentic guy, and we go into detail the challenges in growing this business, but most of all, how he's really approaching scaling his company, the infrastructure that he's going to have to invest in to help it continue to scale without breaking, the leadership team that he's going to have to develop. And we go into scaling and growing a recruitment company that's entirely self-funded. What do you believe are the characteristics and traits that make up a highly successful recruiter in today's market?

Um, well, I can go on the best people that I've ever seen, and I would use the word—

Enjoy this week's episode. Let's get into it. Seb, welcome to the podcast.

Thank you very much.

Thanks for making the trip.

It's all right, it was good.

Uh, enjoy your content. You strike me as someone that's, uh, you know, not afraid to share your opinion, and I've, uh, I always respect that, particularly in today's world. And I also put on here, which I'm going to speak to you about, I feel like you are like the king of polls. Like, you put out a lot of polls on LinkedIn.

I do like putting out polls. Yeah, they get good engagement though, and then it seems to be as if people then see my other posts. Yeah, it's probably more serious. So I like—

I've got a question around polls. I just— when I think of like, when I go on your profile and look at this, I was like You're just always asking interesting questions. Yeah, with polls, which I find really interesting. But so we're here to talk about your entrepreneurial journey, um, which over the last 5 years you've been building your own recruitment business. So yeah, I know you, you've been in the industry for over 10 years, um, so I just want to give everyone some immediate context and then we'll get into this and unpack this entrepreneurial journey that you, you've been on. So feel free to correct me if I've got any of this wrong, but started your business Revorec, uh, in May 2018. And some of the key sort of highlights and milestones here. So first year was just yourself. So yeah, first year was just yourself. So first year revenue was around £175,000. Second year there was about 3 of you and revenue was around £290,000. Third year £350,000, 3 people. Fourth year £780,000. And fifth year, most recent year, £1.4 million. And you're operating around, you shared with me, 20 to 30% profit. There's about 18 officially, uh, of you, and you have big aspirations to get up to 40 people now. Yeah, have no intention of selling this business, um, and you're really excited about some recent markets like Germany, East Coast, um. So yeah, there's some of the highlights.

Yeah, yeah, that's correct. Cool.

So let's start with the million pound question, which is— and, and I think I know I always say this, but you know, understanding your hiring model, which from what I understand is, you know, recruiters that have experience, uh, oftentimes, um, like, what, what do you believe are the characteristics and traits that make up a highly successful recruiter in, in today's market?

Um, well, I can go on the best people that I've ever seen, and I would use the word obsessive. They're kind of really obsessed with the detail of what they're doing. And it's not just the process of what they're doing, it's they have to be the best. So every aspect, if there's someone set a new level in, they still have to beat them. It doesn't matter what it is, they're just obsessive about all the detail of what they need to do to be the best. But that's the A-grade builders. So they know they have the knowledge, they've got all of that, but it's then the desire based on their obsession to be the best. And that's— they're the best people I've ever seen.

So how, how do you try and find that and see that in an interview process?

The reality is it's really difficult. Um, I think the challenge for us is when we kind of started, because I was on my own, I didn't really want to take in people that were quite junior and train them up, because then if I'm the main biller and I'm going to train someone at the same time is then really difficult. And obviously with trainees, the reality of it is there is a high turnover. They may not work out. So we looked for people that are relatively experienced when we started. We've moved probably in the last kind of 9 months. Our plan for, you know, moving forward is to look at graduates and people that are probably second jobbers who want to come into recruitment, because I think if you're looking at experienced people only, that's really difficult. Um, But trying to find people who are obsessive who are brilliant, if I'm being honest with you, really, really difficult. You have to more look at— they've got certain traits about them, i.e., they really want to be the best, they've got a desire there, but perhaps where they've been, they haven't had that nurtured or developed. You can see they're keen, they're enthusiastic, but maybe the company they've been at has held them back. They have a desire, their reason for leaving is because they want to be better than where they are. They've got a need to go and do it. And that's the best that you can probably look for, looking at the potential rather than the finished article. Because as a smaller startup business, I think the reality is it's really difficult to be able to just go, I want A-grade builders, let's go and get A-grade builders, unless you've got a massive cash pool of money. And we're self-financed, so the reality is you have to have some form of compromise, and you have to therefore look at the potential rather than look at the finished articles.

How— I know you shared with me that you always had intentions to grow this business.

Yeah.

How— if that was your intention, how difficult was that first year being on your own?

Um, it was difficult but not for the reason I expected, to be honest. Actually, I thought the difficult part would be because I had a restrictive covenant and I was a regional manager when I left I buy it strictly. I didn't go out and just start working with clients or try and push my luck. I had to build a new desk. My initial kind of thinking was, it's gonna be really difficult. And I backed myself as a very good BD person. That was always my strength. But I didn't think it would probably be— I thought that would be the hardest bit, getting the BD on. The actual part that I found really hard, and why I've got a lot of respect for people that work from home, I found it really difficult being on my own in the spare bedroom in my house, you know, people go, oh, it's great, I love it. Within 3 weeks I'm talking to myself in there. I was going climbing the walls. So if anything, I used that as a desire to go, right, I have to definitely get an office. This is the goal, this is what I want to do. So I knew I wanted to do that anyway, but that was the hardest bit, the kind of isolation, the loneliness, because you want to build something and you've got ideas and you want other people on board. And it was more or less that year was trying to get the cash flow together to kind of then go, right, let's bring some people in, hire 2, 3 people, bring them on board, and then start going from there.

Speak to a lot of founders that that is their biggest challenge. Is there anything that you did to help with that besides speaking to yourself in the, in the room, right? Was it— was your partner really important in supporting you? Was it like, what, what actually helped you?

Well, yeah, I mean, I, I've, I've always made an effort to make sure I had a lot of friends in good positions in recruitment anyway. So I'll regularly go, even now, for lunch with other directors of bigger firms than we are, and I'll sort of bounce ideas off them. I think some companies and some people are kind of guarded against doing that, having a chat with different directors, because they think, oh, I don't want to give them ideas. But the reality is most people like that kind of thing. So for me, a lot of it was trying to have a chat with people, trying to have an engagement things like that to bounce ideas off, see where you're going, people perhaps who'd been in the same position as I had been before, and went from there. And, um, my wife's really supportive. She co-owns a company, but she's a bookkeeper by trade. She's not a recruiter, so didn't understand the recruiter side of it. So I was— it was basically me doing it from there, and it was fine, and she was supportive and stuff. I just think the, the outlet, I guess, you, you want in that position, um— I'm glad to say you said you've seen other people in the same spot. Would you want a bit of social interaction? I am probably more an extrovert than an introvert, and I think that was probably the difficult part for me.

I really respect that you, you know, built relationships with other recruiters or recruitment directors, as you said, because I'm just a big believer that one, there's enough business out there for everyone, and two, I feel like the more knowledge sharing that we do— this is why we do this, this podcast— like, the more knowledge sharing that we do as an industry, the, the better chance we have of overall raising the levels of service, the standards in, in our industry, if we're all striving to just continue to improve, be better, and deliver better, better service, right? So how important have— if that was quite important at that stage, have you had mentors on this journey? Have you had people that you've sort of tapped into or lent on or spoke to at periods in this 5-year journey? Has that been quite important?

I wouldn't say, if I'm being honest, I've had like mentors where I've gone, you're gonna be my mentor to teach me how to do it. Um, but I would say I've taken a lot of advice off people. The position I was kind of in was I was a manager, I was, I was a regional manager. So I'd done the assistant manager, the team manager, the regional manager, and before I even got into recruitment— and I got in recruitment fairly late, even though I was a graduate, I was sort of 25. Um, Before that point, I'd been a manager in mobile phones, so I think I was fairly comfortable with the kind of management and the aspects. And whenever you're a manager of something like that, you always— there's a bit of a loneliness anyway because you're on your own. You have to be comfortable with that, and I think I was okay with that. But there wasn't specifically a mentor, it was more or less I sought advice, asked a lot of questions. Same as, same as when you're learning, when you want to come up in the, in the, in the ranks, whatever, in a— as a recruiter, you'll ask a lot of questions. So for me, it was you've done this before, can ask a bit of advice. And people, if you ask, are really happy to help. So that was, that was kind of— but I wouldn't say I was an individual mentor, no.

But yeah, but got advice when you— yeah, you're just curious about certain things. I guess I'd be silly not to ask, looking back, like, and now tapping into your own experience, because you've now gone on that journey, you've trodden the path.

Yeah.

What was the best advice that you got given, do you think? The early stages?

Um, I don't know. I guess it was— they could kind of continuously look to improve. No matter where you are, you're always looking to. And it was kind of a belief that I kind of had anyway, but a couple of people have sort of said to me, whatever happens as you go through it, the markets change, industry changes, you'll change, you'll evolve, your company circumstances will alter as you grow, but you're always looking to, to learn, but be proactive about trying to learn. So for me, off the back of that, um, I read even more. So I've got like a bit crazy and obsessive about sort of management and leadership books. I don't know why, I just love reading all this kind of stuff. I'm just a bit of a sponge for knowledge. But the more you kind of learn, the better you'll be. Like, knowledge— I know it's a bit of a corny line, but knowledge is power. So for me, I wanted to know as much as I could. I've And I think the best advice I've had was kind of never stop being a student of the job.

I love that. And I think recruiters that think they've completed recruitment because they've billed 300, 400, whatever the number is, that's a mindset they want. I'm sure you try and instill in people as well, right?

Well, yeah, there's, there's, there's never— I don't know, there's always, there's always more to do. I just, I find it really difficult to kind of If you have someone that goes, I know it all, then that's— and it's just from, from my end coming up in the ranks, and I was, I was probably more obsessed rather than— I was, I was never top biller, but I was always one of the top billers. But my main bit was Mr. Consistent, I'm going to overtake everyone and progress. So I broke the record to get from a trainee to a regional manager, and that was— I wanted to progress, I wanted to beat everyone. So my thinking was, anyone around me seems to think that they know it all, they're the daddy. What do I need to do to know more than them so I can overtake them? And I'm just— I don't know, that kind of competitiveness I think was something that I got from, from learning different stuff.

So yeah, yeah, no, I just really like that because when you do go out on your own, you— and you've been used to working in a team, you instantly lose the ability to learn from the people around you and learn from other people. So I can understand why that would be a really, you know, sound bit of advice. I guess if we could just hone in on a certain part of this journey over the last 5 years, because I think it's often when I speak to other recruitment founders, a really difficult period. So I know, you know, second year, third year, uh, there was around 3 of you. Um, is it— was it the fourth year that you then sort of entered? There's more like 10 of you and going—

yeah, we've— yeah, we probably expanded a lot more recently. I mean The main problem, I guess there were two problems that we had, which were we were in a market which was heavily challenged by COVID. So I know a lot of tech recruitment founders, obviously COVID happened, then all of a sudden boom, it's great for them. We weren't in, we weren't really in tech then. We sort of only are like our tech side of it's only really started going over the last kind of 9 months or so. It's a newer team. My background and what we built on was kind of engineering and manufacturing. Imagine going into COVID where I'd started for the first year, 2018, 2019, wanted to hire, then all of a sudden March 2020 lockdown. Yeah, 9 months in and we're doing— most of our desks were manufacturing, they shut all the factories immediately. You've all the cash you built up to try and hire people, then you're like, right, I've got to keep that in the bank. You can't go out hiring people at that moment. And we didn't have the knowledge just to change market completely, we had to adapt and be quite flexible at the point and get into things we probably hadn't done before. So at that point, it was probably playing it fairly safe. But then after that point, then we started getting better understanding the niches that work, looking at the data, started hiring in people from other companies who had experience of it, started bolting in things and folded it into what we did in the STEM markets. And then I think we've started accelerating. So now we're just kind of continuously hiring every sort of person, every, I don't know, 3 weeks probably. Um, it's some start this week, 3 people started sort of a month ago, someone started a month before that.

So it's been— yeah, it's recent. 12 months has been really—

yeah, more recent.

Yeah. So it seems like one of the, the lessons then was the importance of diversification then.

Yeah, yeah. The irony of it is a lot of people kind of say, um, when you start up, it is true, you kind of— and I think I've heard it on your podcast as well, but people said other places, it's mile deep, inch That's great if you want to get in. The problem is if that mile wide, um, or mile deep sort of niche, um, or mile deep kind of niche, um, collapses, your eggs are all in one basket. So I think if anything from COVID it was then kind of a wake-up call. Yes, be an expert in your field, but also have enough flex as a business that you can ride when you're in the downtime, when you're in a bit of a difficult period. Otherwise, just go out of business. And I think that, you know, you see the statistics on new companies starting up that fail, um, and you hear the success stories as well, but most companies fail for a reason, uh, or for a few reasons. One of them is that they were kind of caught in a niche that then collapsed, and then they don't have any flex. So I, I do believe you need some flex as a business to be able to deal with the ups and downs of the market.

So with that lesson then, would you mind sharing how you've now got it set up? What You said obviously the STEM market, so what does that actually look like? So your bread and butter was manufacturing, so what would be the typical client at that stage before you did diversify? What was like the typical type of—

yeah, so company, we would have had a lot of aerospace, um, and automotive and stuff like that.

Um, and you would hire what, the people?

Well, yeah, you'd have— so you'd have maintenance engineers, um, design engineers, um, you might have electrical engineers, mechanical, project managers, all this kind of stuff. But obviously if they're working in factories and they just close the factories down and they're non-essential, the production just stops. They don't need to hire anyone. And still to this day we're mainly perm. Yeah. So the problem is it's not as if you can have a contract to run in the background. And the contracts we did have running at the time, they just shut them off as soon as, as soon as kind of March 2020, because they don't need them. So that was where we were in. But the setup now is where we have an engineering team, which is a general engineering team, which will deal with the kind of stuff that you would look at as necessity.

Okay.

So stuff needs to be fixed, stuff needs to be improved. There needs to be quality checks in place for regulations across manufacturing, across engineering. That's a core part of it. And that tends to be a fairly safe, predictable kind of basis.

It's essential.

It's essential. Yeah. Which was a market that we wanted to make sure they've got a safety net. So if you look at it generally, depending on what, regardless of what happens in the market around it, you'll still need those kind of roles filled. There'll always be a demand for them. So that's one part of it. The other part we've got is an advanced engineering kind of thing, which is more someone's coming in, they want a £20,000 sort of fee roll, £30,000 fee roll, something like that. A real specialist, high-level engineering director, project director, that kind of stuff. They need an expert in it. We will go out. It's much more the kind of— I wouldn't say— I wouldn't describe it as headhunting, but the kind of roles they're giving us are going to be a lot harder, where you come in and the volume will be slightly lower, the fees are much higher. And then the other part of it is a tech team. Which is broken into at the moment software, data, um, and then Germany. So we'll do software and data in the UK and software and data in Germany, but that's a much smaller part of what we want. But those are good, again, core area of, um, of tech that we can then establish ourselves on it and then bolt on product and bolt on different areas of it as we expand. So what we've kind of done is got 3 separate parts of the business, 3 different revenue streams if you like, which then balance out in a fairly— the tech probably is a little bit harder on the market at the moment, but certainly from an engineering perspective, that's booming. So that's doing really well. So we've got flex is the point of it.

And then do those, do they overlap at all in terms of like the, the tech side? Are you targeting manufacturing companies that are, you know, implementing certain— I don't know, you know, the— I think when I spoke to some engineering recruiters, it's like you have these like robots in manufacturing, digital transformation, stuff like that. So like, are you trying to be intentional around that?

Yeah, what you want to do is you want to kind of— you don't want to be like there's one arm of the business over there, one arm, and they're not connected. You want it to be folds within it. So therefore, for some of the accounts we've got on, we've got some big multi-billion sort of PLC companies, we've also got some SMEs. But what you'll find is there's a bit of a pattern in there. The multi-billion companies will have a requirement for all of the types of roles we can support them with. So therefore, that same client, we can get in there and then be able to land and expand kind of with them by having a kind of a lot of crossover on what we can offer, our offering, which gives us a lot more benefit to be able to get in there and maximize getting on that asset account, if you like. But with the SMEs, a lot of the SMEs that we get on fit within the supply chain of those businesses. So therefore, if you can help one SME within the supply chain to that en company, you can also help other ones. And we end up kind of using it as folding the expertise we've got in there to really maximize the client base that we have, our offering of what we can do for them, and then get a lot of repeat business out of it as well as trying to BD other companies in there. And that's how we're kind of scaling.

Yeah, it makes sense. That's super, super smart. And kudos to you to taking that lesson and really making sure that you're set up moving forward so you aren't as vulnerable as— yeah, as you said, right? So just curious on that, you said what your background was. How difficult have you found it to manage people in a market you've never done?

I'd say there's two ways you can look at it. I think when I started, I would have— not here, but when I started, probably in— when I first got sort of a team manager at my previous company it was just within the markets that you dealt with. But there were— we had different kind of— I would say it's more generalists rather than verticals, but I wanted the team to kind of have vertical specialisms within it. And the reality of it is developing people who then get a knowledge for a field that you don't know, you can't necessarily give them the direct advice. So you more or less— your, your measures of whether they're doing well or not really come down to are they meeting their targets? Are they improving year on year? Are the numbers in terms of efficiencies and productivity going up? And you have to kind of have kind of a— I'd say more of a pragmatic viewpoint on it. So for example, now I, I'll be honest with you, I don't know anything about the data markets directly, but I think if you want to manage a company and you want to scale your company, if you're limited to I can only manage people, or I'm only confident to manage people that I know the markets they're in, you're going to be really difficult. So it's more about trying to manage people and then trying to hire in. This is what we got in terms of the people who are in the tech sector, tech market we've hired. The core ones are very knowledgeable on those markets there, and I have to trust them. So I'm basically trying to hire— look, it's not unique to us, but when I try to hire heads of something, I'll deliberately try and get people that know a lot more about it than I do. And again, I'm seeking advice from other people who are in those markets that are other directors of other companies that will give me fair advice, um, to go, actually, yeah, they're credible, they know what they're talking about, go with that person, and that person can teach me things as well. Otherwise, you're just— you're never going to scale. If I'm only going to go, am I going to hire people that I know what they're talking about, it's really difficult. It does offer a challenge, don't get me wrong, but you have to— you have to come to a point where you're like, right, there is a level of trust that you have to go in there. And as long as the numbers, the credibility is there, and you can— you can formulate and understand this person knows what they're talking about, you can— you can kind of work with that. But it's much more people management rather than teaching them how to do their job, because you don't know what they do as well as they do.

Yeah, sure. I guess what would be helpful for people, if you don't mind sharing— so like, I understand that the people management piece makes complete sense. Like you said, you've got to trust these people, you've got to really try and get people that are obviously smarter than you in these certain areas. So would you mind sharing, like, what would those dashboards look like that give you confidence that they're on the right track? And, you know, what are some of the key things that you're looking at to go, right, I'm investing in this person, I'm investing in this data team. From what they're sharing with me, they're telling me about the market at the moment, these things. What are the things that you're keeping close eye on to make you feel confident that they're going in the right direction? Is it, are you mainly looking at the number of new client meetings they're booking on a quarterly basis? Is it the, you know, the ratios that you're keeping close eye to? What, what does like, you know, Seb's dashboard look like on the people management side?

You look at two factors, okay? If in terms of, I guess, kind of inputs, if you like. One of them is the productivity, one of them is the efficiency. Okay, so you set a benchmark of where they are in the first place in terms of what productivity they have, what efficiency they have, and then you've got an initial benchmark. And then you'll ask other— you take advice from other people in the marketplace about that particular sector or whatever. What should they be doing? What's good? What's bad? What billing should they be doing? This kind of thing. And again, that's utilizing your network of people that I kind of know. and then you see that trajectory, trajectory even, of where they're going. So you're looking for productivity increase, efficiency increase. That's what you can gauge from the numbers there. But the reality of it is what you're looking for, are they billing more? That, that's the outcome is, are they billing more than what they were? Are you getting an accurate return on investment? Are you in a position where you can see it where there's maximising, they're going in an upward trajectory on the two areas that you want. And are you in a position where financially it's generating you a profit to continue to invest in that team and expand it? I know some people kind of want to look into it more complicated than that, but it's literally you're looking at productivity and efficiencies, understanding what benchmarks you need to aim for, and is it an upward trajectory? That, that's, that's what I would look at.

What would be helpful for people is give us an example of what would fall under productivity.

Okay, so productivity for us is more in terms of we would look at the front-end vacancies and probably CV sent and seeing if it's, it's a good kind of market. Some markets, if you're doing more, let's say, advanced engineering, um, you'd be in a position where you'd expect a lot less CV sent because it's more headhunting because they're more niche roles than general engineering. So we'll know the benchmarks of what you should be sending. So if you're doing an engineering director, you're probably not looking at sending 5 CVs in the first week or something like that. But if you're doing a maintenance engineer, we'll know all the maintenance engineers and all the companies that require maintenance engineers in, let's say, Birmingham, would have mapped out that market. You'll know that you could probably get 4 or 5 across to each that meet the spec, that meet the motivational standards of what that particular client wants, and that client you know is probably going to go, I want to see at least 4 of them. So you can go, that's a good productivity there. Your productivity is really what you're looking at in terms of CV sent and vacancies. But then again, if you're doing German Ruby developers, for example, that's going to be quite niche. You're never going to get that many people out there. So you know your benchmarks on that. So really it's against understanding what your benchmark should be for vacancies and CV sent compared to that market that you're working in, that vertical.

And then what about efficiency?

So efficiencies, we measure a few things that are probably different to a lot of companies. So I'm one of those people who likes my spreadsheets. I geek out on this kind of stuff. So I want to know the amount of average, how much we've covered in terms of vacancies. So we want to above sort of 50% coverage. So for every vacancy you raise, um, you want at least 50% coverage on that. Again, certain markets you'll know—

sorry, what does coverage mean? Sorry.

So coverage, if you have 2 vacancies, you would at least have one of them that you would get interviews for, right? So that's certain jobs which are going to be— that's a general kind of minimum you might have in engineering. Okay, maybe it's a new client, and you're talking about averages across the field. So if there's a new client, you might have commitment issues or anything like that. But if it's an experienced client, you're probably looking at about 75-80% coverage. So for every 5 roles, 4 of them you've managed to get past the interview stage. Then you're also looking at efficiencies of how many people you've got in for each of those interviews. You want at least 2.5 to 3 people in for each interview. Therefore, the client's in a position where they're going to have— they can be satisfied that they've seen a variety of people, and they're more likely to pick one sooner. Then you've got turnaround time in terms of CVs, turnaround time in terms of decisions, turnaround time in, in terms of getting feedback, prep work, all of these things. If you're really tight on those factors, you maximize your chances of placing and being really efficient at placing people. And it all comes down to that efficiency is if you're doing work, you're maximizing, certainly from a contingency recruitment perspective, how efficient you're going to place everything. And obviously it's a retainer, or if it's exclusive, then you still want to make sure you deliver on it. Otherwise you're going to lose exclusivity, or you have to give back some of the retainer. So you still need to be efficient. It's a big thing that we're kind of obsessive about.

I love that. Oh yeah, that's, that's why I asked the question. I wanted to know what was on your spreadsheet.

That's what I work with.

Yeah. So, so just, just to recap on that for people, because this is— because look, I understand what you're saying about obviously, that keeping it simple, the outcome should be going in the upward trajectory.

Yeah.

But for you to feel confident, you know, in terms of the cost that you're adding to your business and supporting them and adding, um, the cost to your business, you've got to see these things on this spreadsheet going in the upward trajectory, right? You've got to see those inputs.

Yeah.

Because, you know, if they keep going in the right direction, then the outcomes will come.

Yeah.

So as you were saying, so from a productivity standpoint and things like vacancies on number of CVs out. And then efficiency, you're saying— so coverage is if I've got 2 jobs on and one of those jobs I was able to get 1 to 3 interviews for, that's me covering that job.

Yeah, right.

And then you're saying then the turnaround time from interview to what feedback on, and like the turnaround times on those things.

Yeah, you're looking at— because you've got to bear in mind you want to work with clients that are willing to work with you a little bit here. If you, you'll have— certainly when you do new business development, you'll work with clients where there's a an issue with commitment, let's say. You might have that risk where they'll say to you the right things— we will want to see these candidates, if you send us these candidates that meet this grade, that are this motivational match for us, we will see them in X period. However, then you often find they don't hold their word, there's problems, there's a commitment issue. Okay, so you have to have some flex for that because you have to go on a bit of a goodwill word. But when you start dealing with repeat clients, obviously the ones that are efficient, then you, by working with the client, and they understand that if we meet this criteria in terms of turnaround time, we'll be able to deliver this for you, this will be the outcome for you, and we'll be nice and efficient. So you end up having clients coming back to us time and time again going, I know if I ask Revorec for this, I'll get this in this period. And it's like a productivity straightaway. It's a very efficient kind of machine. That is what we're trying to replicate across our markets. And continue so we can scale.

Makes sense. This podcast is proudly partnered with Vincere, the all-in-one recruitment agency software that over 20,000 recruiters trust daily. We're also partnered with the award-winning 1UP Sales, the sales and motivation platform that enables you to maximize the potential of your teams. We love partnering with both of these organizations because they share our mission in helping you get the most out of your people and your business. You can get exclusive offers because you listen to this podcast and get up to 10% off the usage price forever. Use the link in the show notes to get your hands on that. Let's get back to the episode. So a lot of founders that I, uh, speak to, uh, in the recruitment industry can often find the period from going from 10 to 20 often quite difficult.

Yeah.

So let's just focus on that for a sec because you're like in the thick of this right now. Are there any, you know, obstacles, barriers that you are finding yourself run into that maybe you didn't expect in this, you know, growth period? What have you found maybe more difficult than you anticipated?

I don't think there's anything that I didn't expect. The bit, the challenge, the main challenge that's there that all people, all founders will find when they get to sort of the 10-20 period, because that's the bit where loads of companies get stuck. Yeah, like you say. And the reality of it is you need some form of infrastructure in there to scale. So for example, yes, I've got 3 teams across the business, but it's all very well saying, right, gonna hire 10 people for that team. If you've got one manager on that team, managers direct people you can actually manage. The magic number is kind of 7.

Okay, you found it to be 7? 7 recruiters to one manager. That's why it's not the magic number.

I don't know, it's not just, it's not just in recruitment, it tends to be across the park. What you want is if it's more than that, can you manage more? Yes, you can. How efficient are you going to be at doing that? How much time are you going to have to give them? That— it— the efficiency starts to get damaged after that. Before that, you're not maximizing on what you can get. So that's the magic number that, that I found that works. But it's not unique to recruitment. There are many books written about it in different industries.

Yeah, so 7— just to be clear, 7 to 1, because I think that's an interesting insight. We found when we surveyed our customers, yeah, it was around like between 5 and 7 was the typical average number of recruiters to one manager.

Yeah.

And just to be clear, you viewing that as those managers also contribute, also have a number, and also billing, as well as manage it being like player coaches?

Yeah. So the structure we've got and what we're working towards is with those managers, they are developing up to 7 people themselves, with the idea— and my role is I'm hands-off, so my role is to try and beyond the business to go in and try and develop the managers that meet the criteria of being able to build, but also meet the criteria of being able to be accountable for certain areas of management in terms of behaviours, with the idea being we develop a second line of management. So you've got two other guys coming on our most, our longest serving team, it's the general engineering team, that should be coming through before the end of the year. Main manager, two sub-managers, you build teams under them, you get a team of 21. We develop within that another manager, and that's how you manage to scale. Okay, and going back to your earlier question, what's the challenge with a lot of companies come between 10 to 20? Is the infrastructure is the, is the challenge. Realistically, if you can get people that are effective managers that you can trust, you can delegate to, and you have them time after time, you can escalate it. And the senior manager on that team, that's how you get them to be able to be a hands-off director. So yes, they're hands-on, hands-on billing managers now, but the viewpoint and the structure is when you end up getting to this their role moves more to people management. Me, I then move back more to a macro level, open up other offices or whatever, and you've got an operation that theoretically I don't even need to be involved in that manages itself and grows itself because you have that infrastructure. But the main challenge, going back to it, between 10 to 20, getting that core infrastructure, because it is hard.

So let's break this down a bit because I think this would be useful. So yeah, I'm assuming then the core part of that infrastructure is the leadership team and having people that you feel confident that you can put up to 7 people underneath and then you can grow from there. So we've got leadership. What else are you investing in infrastructure-wise to be ready for this growth? Because I think this is where sometimes a lot of founders I speak to, um, run into challenges. I don't know what you found. It sounds like you investing in it now and getting it all ready. But I speak to a lot of founders who think, right, when I get to 15 people, we'll worry about that. Or like, rather like, let's worry about when we get to that. Whereas a lot of, you know, successful recruitment entrepreneurs I've sat down with, it's like, you have to have that infrastructure in place now to grow into.

Yeah, you can't— if you go, I'll cross that bridge when I get there, that's where the problems come in. Because the larger a company gets, the more difficult it gets to be able to change the direction that you're heading in. If you're heading in the wrong direction, you know, when there's one of you or two of you, you can pivot pretty quickly.

Yeah.

Pivoting a larger company— I'm gonna say larger company, but even past 10 people, all of those people you've got to get buy-in from, it becomes difficult. So the structure we have is to try and deliberately set ourselves up and invest in what we need before a company that is a 40-person company. So as we scale into it, we don't have to make as many amendments. What you don't want is if you If you scale, I mean, the kind of thinking of we'll change that when it gets to it, you have to make a lot of change. Loads of change disrupts things. You want to have it proactively put in place before it gets there, so your actual change and involvement just looks linear. Nobody notices it because it's a nice smooth process. Everything works, seems to work out well. If you try and do it all in one go, that's where you have problems.

Yeah, I love it. So let's break it down. So you've got leadership part of that. What else are you doing right now? What else are you investing in, getting ready to be ready to be a 40-person company? Are we doing anything? Are we bringing finance in-house? Are you making sure you've got documented processes for, yeah, you know, how we do things? Like, what, what else?

So a lot of it is having the documented process of what we got. So we have— we've got us— we've revised our training program a lot. We spend an awful lot of time trying to train people. So when someone, let's say they're an experienced recruiter that comes in from another company even if they're a lot bigger than us, they come in and they go, oh my God, they're training properly good. So we'll put in— a lot of companies just offer practical training. We'll offer psych training. So for example, you get a lot of recruiters that will go, of course, a bit difficult doing that, or a new market, they really challenge with it. We can teach them through that. We deliver our training based on learning cycles, so audio, audiovisual, kinesthetic, all this kind of stuff. So we'll have documented processes for that as well. But also we're trying now, this stage of where we are, is trying to put people in place that almost— we spoke about it in a sort of pre-thing, but to sack myself. So at the moment, um, at the moment, we— I do a lot of the marketing. And don't be wrong, I love doing like— I love sitting there and doing the videos and putting content out and things like that. Love the posts, love the posts. But it's as in, then you want to bring in a marketer and develop that person on it, but again, try and bring someone who's better than I am. And then the administration, we've got that functioning there already.

What does that work? So let me— wait, sorry, sorry, just— so first you said psych training. Tell me about that. What do you mean by that?

So psychological training.

What is that?

So basically you'll have it where goal management, proper understanding, short, medium, and long-term goals.

Okay.

So you're not just trying living for the moment, you're kind of understanding if you're putting the work in now, which is unpleasant, this is why it's worth it, this is what you're working towards.

Okay.

Um, then you'll have kind of the psychological bits. So a lot of trainees, when they come in, they come across a period which we call kind of S2 or whatever, which is where they— I don't know if you ever come across a model called, um, it starts off with like, it sounds a bit strange, but, uh, unconsciously incompetent. If you ever come across this term.

Yeah, no, I do know what you mean. It's, um, what's the cycle? Unconsciously incompetent, competently, uh, competent, consciously, consciously incompetent.

Yeah, it's a bit of a weird thing.

Yeah.

So we'll teach them through that, which isn't— it's not unique to recruitment, it's just general kind of psych stuff that we've built up even ever from my own knowledge or that we've read or that other companies have implemented to try and build it up so we can develop those people. But going back, because I mean, I promise I'd be, it'd be a massive long answer if I said all of the infrastructure we do on it. But the idea being we have documented processes and then training and benchmarks of where people should be. So the idea that when we have marketing in place, administration in place, sales teams, BD, um, look, account management. We are in a position where all of those functions work better than I could manage them, and therefore I could sit there and go, I'm— these people are better than me, I don't need to do anything. That puts you— the idea isn't to sell, but if you're an investor, that's what you want to see. You haven't got to do anything, but that means it's also a very, very well-run, slick ship. That's what we're working towards.

Okay, love that. So We've got the, um, leadership team, the training, which is absolutely crucial. So, and also your, um, processes, documenting how you do things, benchmarks where people should be, these things. You've got, um, as you said, the, the marketing piece.

Yeah.

Talk to me about admin. Like, what does that mean? Like, are we talking about someone that's always cleaning your, your database? Are we talking about people that— what does that look like in terms of admin?

With the administrative stuff, we always have one of our philosophies is kind of simplify. So if you make loads of admin— administration and paperwork or anything like that can get really, really complicated. So you've got— we work it out as in, if you've got GDPR compliance checks, and I'll oversee the compliance checks, and administration will then do the compliance checks, we can make sure we've got a double kind of red flag in place to make sure we're doing data cleansing or anything like that. But in terms of actual set processes, we will have set processes in terms of For example, let's say we're sending, um, invoices out. A lot of companies that I, you know, I speak to that are smaller than us, or people have reached out to me and go, can I have some advice on— because we struggle to get paid— we will have it. And I don't know why most companies don't do this. We'll have it where if we've placed some with a company, we'll have our administration team send out, by the way, we just placed someone with you, can you give us whether we need to fill in a any forms or anything to have us onboarded for a new client. The invoice is going to be on this date, it's for this person, this is it. Do we need to complete anything beforehand? Therefore, when it comes to the date they're expecting the invoice, you've got the invoice out, this is the payment days, then you've got your set reminders in place. And it's just, it's just a set process, and we generally get most of our stuff paid on time. We don't have loads of issues. That's a big problem that a lot of recruitment companies had, and to be honest, it's probably something we've refined a lot over the last 18 months, 2 years, because we did have that issue in the pandemic and we didn't want to get back in that position again.

Okay, really interesting. So just on that, because you said a lot of people reach out, and then I just want to ask you how you see this business looking and structured at 40 people, because I think that would be interesting in terms of how you see it with those different parts. Um, but where, where do— like, how on average, how long does it take to get paid then right now?

So for us, we generally do 14 days. So most of the reality is most clients will pay about a week late. A week.

So on average, people paying around 20 days?

Yeah, probably people have about 20 days. We'll do 14 days for standard. A lot of companies will say to us, look, we need to do 30 days. Not a problem. Okay, so that's generally— but I would say the average for us, from someone starting to us getting paid, is 20 days.

Where do people go wrong then, if you've had a lot of these conversations? One, they don't have even any sort of process. They're just sort of like Oh, we've placed someone in Seb's company, so let's chase up. Hey Seb, you now need to pay us an invoice. I'll put a calendar invite in there for a week. If I don't hear anything, then I'll call.

Got it.

Yeah. So what you've done is you've built like a cadence basically of like, when we play someone, we are proactive and said, hey, to prevent any sort of you saying to us, well, you need to complete this, or we need to do that, or you need to be in our system. You're saying, hey, we've placed someone, amazing. What infrastructure do you have internally that we need to be on? If any, for us to get payment. So you've basically just documented like when someone gets paid, this is what happens, and you've got someone responsible for that in your business.

Accountable. Yeah.

So just, is your advice then, if you're struggling to get paid in 30 days and on average you're getting paid 90 days later or 60 days later, which is obviously going to impact your cash flow, yeah, is like make sure that whoever it is in your business, there's one person that falls under responsibilities and you document how we chase to get paid. Yeah.

That's the key thing. What happens is, your question was kind of what advice would you give, like as in what's a typical mistake that people make? What a lot of recruiters do is when they start a company, they kind of go, well, I recruit really well, I'll be able to go and, you know, I'll be able to do this myself. The reality of running a business, there's books written on this as well, there's 3 pillars you kind of have to look after. One of them is the task, i.e., being a good recruiter. One of them is day-to-day operations, which is that kind of stuff to make sure everything's done. And one is the vision of the platform of where you're going, how you're going to build it so you know what to meet each grade. But the operational part is the bit where a lot of companies really fail on, because if you end up behind, if you end up with cash flow issues, you've got no money, you're in trouble. And if you're unorganised, it becomes really, really stressful really quickly. You don't want to be in that position. So the bit of advice that I would give is make sure you're really tight on your day-to-day operations. And set it up again as if it's— if you had 20 people and you have to look at it, right, I need to get paid, what infrastructure do you put in place and what process do you put in place so you make sure you get paid? Because if you don't, you could be out of business.

Yeah. So let's just wrap this part up then. So Revorec, if you get to 40 people, how do you see— like, what's the org chart? Because I think that'd be helpful and this sort of ties it all together. So how do you see that from a leadership standpoint, from the admin department, from the marketing department? What org structure are you working towards and when that's a 40-person company?

So the simple bit of it for me, if we kept it as the kind of 3 divisions we've got now, the 3 resource, 3, um, revenue streams if you like, you've got a senior level of management, you've got a second line of management, that gives you the growth structure you need for the people.

How many salespeople do you reckon if you're at 40?

Well, if you're looking at that, apart from the main manager, maybe if they're coming slightly hands-off, they're a larger team, but they've got 20 people or so, you might go, okay, they'll spend only a minimal amount of their time, maybe key accounts But generally speaking, all of the, all of the people who, um, are on those teams will be effectively billing, apart from maybe you'll have, you know, if a key role, certainly on our advanced stuff or it, you might have resource or non-billing. Okay. Non-staff. So I think that's probably the easier way of doing it. Um, myself, my wife, who does the, who's bookkeeping, then the admin team, probably a couple of those people, 2, 3 at that, that size.

And what would those job titles be?

We'd just be looking at administration. Okay, you're looking at administration.

I want to show if you'd be like ops manager or anything like that.

You can, you can give job titles. It's— you might have the operational side of it in terms of an operations manager or something like that. I would— I don't think even at 40 people you necessarily need someone who's just going, right, you just do operations management. If you've got the right infrastructure in there, you have a lot of it can operate itself through either the admin team, the marketing team. Yeah. Um, the, the, you know, me, a director, in terms of— although really you don't really want to be doing any operating. That's the danger. If you— if I'm operating a business rather than overseeing it, that's where you can get caught.

Yeah, sorry. Yeah, so 2, 3 people in admin team. Sorry.

Yeah, 2, 3 people in admin team. Um, you probably have 1 or 2 people— well, 1 person marketing or whatever who can head up that bit. You'll probably be looking at an internal recruiter, 2 or 3 directors, 1 probably sales focused, 1 probably more ops focused, 1 general overview and everything, which would be me.

No trainer.

What, L&D? Yeah, I like training. I do want— I do want to.

And then, sorry, sorry, so then what would your role look like? Because like you said, I love the way that you're— because I think a lot of founders don't think like the way that you're thinking, right? You're very mindful of— if I sit down, you know, why would you not try and build a business that you're clear that, you know, I don't really have any intention of selling it, but why would I not build a business that if I were to— if someone was to knock on my door and said, hey Seb, like, would you ever consider you know, someone buying your business. Why would you not build a business where you can go in, I mean, and go, yeah, so if I was to leave this business, this is how it would work, this is my leadership team, etc., etc. So what would your role look like? Because that might— that would be quite a nice thing to add as well.

So I kind of— it would probably be— I don't know, you could do it, you could probably do it at 50 or whatever. And going back to the L&D part, I, I would want an internal L&D, but it wouldn't— I mapped it out a while back in terms of what you want. It will probably be more slightly larger. I don't think You might need it, but I'd probably get a good external sort of trainer or something like that, that kind of stuff. Um, going back to your question in terms of if someone sort of knocked— was that the kind of bit?

Well, so like, so you mapped out what the company might look like, so then what would you— what would be the high leverage activities that you would be doing? Because, because like you said, like, so what would you— what would the pipeline—

once you get to kind of 40 or 50, my main focus would need to be focused on the big ticket things that can impact the business. Developing the senior leadership team. Yeah, so they can replace me, basically. That's your key part of it. Um, so the areas that they don't know that they're weakest on, either that I can develop them on or I can go externally to be able to offer that development on. That part of it, working a lot with the management team and working probably to support people with big ticket accounts. So I know probably my best strength in the business in an active role is probably trying to win business. I've always been good at winning business. That's probably what I'm what I'd be best in. However, I know if it's— if I'm the only salesperson, that would be a problem.

Yeah.

So it'll be developing people to be effective at that. But what, what I'm really working towards, going back to my earlier point, I'm— you try to build an infrastructure to sack yourself. So effectively, at that point, you're on the business and then look at it like a helicopter viewpoint. What is probably best? And it'll probably be at that point more strategic role right, let's look at opening up a separate division. What infrastructure would need for that division to start that? Or we go into, let's have a look at the investment arm. We want to go and buy a smaller company, one of those founders who's got 10-person outfit that we know runs well but probably is missing the infrastructure that we need, right? Let's get our management team, fold them into what we're doing, and then come under there. So it'll probably be more at that point, really my role working towards it would be strategic, non-operational. The business operates itself. Strategic to see about, uh, growth of the, the wider business. Love it.

You've clearly read a lot. We all read— well, not everyone reads, but like, you know, we consume a lot of information. There's only normally a couple of books that you read that really have an impact. What have been the books that have had a real impact on you? Because clearly you, you know, love delving into things. Any 1, 2 books that really stand out with this particular type of you know, with this type of thing being of interest? I want to grow my business, I want to make myself redundant, I want to grow my business in the right way. Any, any books that have had a big impact on you?

There's a few. There's— I've read, I don't know, my bookshelf's like hundreds and hundreds of books, but I'd probably go through ones that come to mind. One would be Good to Great, which is the, the most ins— that was the first sort of— I've read it when I was like 23, I think. I was— I just got my first management job, I was just assistant manager in mobile phones, and the branch manager said to me, read this, read that. And I just— that was, wow, I get this, right? Um, and then after that, um, a book that I guess would be, what, say, The E-Myth Revisited, which is—

yes, unreal.

That's the one which is— that goes through the— you need the operations. Yeah, you need the different hats. Um, Lean— The Lean Startup is pretty good. That's more recent. That's pretty good.

That's, that's very much like build things that customers want rather than—

yeah, it's about minimum viable products, what it talks about. It's more product, but in terms of— I know it's like California kind of—

you can take principles from that.

The principles are really good. So yeah, I'd say the ones that come to mind, probably those three. I mean, I could list loads, but no.

Yeah, but I just, I just thought it was interesting because you spoke a lot about— yeah, you know, reading these things. So, uh, as we come to towards the end here then, you said one of your strengths, uh, is, is BD. What, what are the sort of principles that you, um, really live by when it comes to being world-class at BD?

It sounds really strange, but make him your friend and then your business partner. Sounds really strange. A lot of people— the, the bit that I— when people first get into sales, the first thing they try to do is sell to people. Doesn't work. Doesn't work. Nobody wants to be sold to, do they? So if you can make someone like you and they realize as a person there then the next thing you know, they're kind of doing you a favor. I mean, I'm very— I'm probably good at just relationship building. And really, if you want to get anywhere, and if you want to do a quick sale, like when it was mobile phones, for example, it was transactional. Transactional. If you want to actually do— if you— transactional recruitment, that's dangerous because you can be up and down. What you want to do is try and build relationships with people where they come to you because they like you. You'll have it where you don't want to be like this, but you will have it. Let's say you do some new BD right, and you'd finally win them. What other agencies do you work with? Oh, this other agency. Okay, how, how do you get on with them? How many roles? I don't really fill anything, but our HR director really likes them, so keep going back to me. They never fill anything, just because they've got a relationship. But if you can have that relationship and you can deliver stuff, that's it. So for me, a lot of it is you can have a chat with them, find common ground. And I'm probably someone who's fairly good at finding common ground and interest with different people from different walks of life. Um, and I think that for me, I've always found pretty, pretty good in terms of it. And that's the base marker, I would say, you know, looking at it. If you can make them like you and they can have a chat with you and then they relax and they realize you're okay, then you start making the ground and putting in the groundwork for it. But as long as it's got to be mutual benefit— I mean, ultimately business is mutual benefit, is the exchange of goods and services, whatever— but it's— you want to work together because you like working with one another, you just like each other, that kind of stuff. And that's how I look at sales. PD.

So I said I wanted to ask you about, uh, your polls. Okay, this might be a hard one. Most interesting poll that had the most surprising result.

Do you know what, I don't even know what I've ever asked. Um, I do them because, I don't know, I like the polls I like the most. There's none that stand out specifically. The polls I like the most are the ones which someone asks a question which, you know, if you made— you know, someone does like a LinkedIn post. Yeah. And then it's really controversial and then it's, right, I'm nailing my colors to this flagpole, this is how I feel about it. And then they'll just try and be divisive for divisive sake. I never quite feel comfortable with that because then it could bring company and disrepute, make me look bad, and I don't feel comfortable doing that. Even if you've got certain opinions on certain things, you kind of look at it and go, you want to be reasonable, you don't want to be interpreted the wrong way. The beauty of a poll is you can put a poll out asking that question and people then are able to answer honestly and anonymously so you actually get a thing of it. There's no poll that— I can't even remember what poll I put out yesterday.

Okay, I just thought I'd ask. Yeah, yeah, why didn't we— I really liked— I think I obviously— we've exchanged a few messages anyway, but really liked your honest advice for graduates. We're getting into that part of the year now. Yeah. Anything you want to leave people with? That, because I think a lot of people resonated with with what you said.

Yeah, it was quite a big— I think that's a big one. You invited me off. Yeah, I saw it.

I was like, mate, obviously it's overdue. I was, you know, sitting down, um, doing a podcast.

Like, we spoke before, haven't we?

Um, because, you know, you said a career in recruitment will test you mentally if you want to be good at it. Work in the office when you're learning. Nobody owes you a living. The crew will have highs and lows. Like, why, why, why, what made you share all that? Are you seeing the opposite of these things when you're sitting down with people?

I guess I'm speaking from my own perspective of where I would have been. You know, there's things where people go, message to your 21-year-old self or whatever. Yeah, I left uni when I was 21, so that's how I would look at it. When you come out of uni, kind of, I've got a degree, gonna make it, whatever. And it is literally the cold hard reality of the, the working world, or if you want to be successful at something, you have to work hard, you have to be prepared to do it. But If you wanted one kind of advice that I would look at is a career, and I kind of, I think you put this out yesterday, um, a career, start with the end in mind. So where is it you want to be, like long-term goal or whatever, if you think of that. And if you're then coming out, right, I've got to put the work in to get there. No one's going to give it to me. And it's the same in recruitment. And you do, you do have different people. I'm not a big goer on this kind of just because it's a generational thing. I just look at it as in a personal personality thing. You will have people that will learn that, that expect things. They'll expect things and they learn, end up learning the hard way rather than, right, this is how it works. You kind of, you've got to go out there and put yourself out there. Expect to be a sponge for knowledge. You're not going to know it all, especially at 21, not 41, not 51, whatever. So go out there and do what you need to do with the end in mind of what, what it, where it is you want to go. That's the advice I would give. Start with the end in mind.

So thank you.

Thank you very much.