Recruitment is a ‘people business’ in more ways than one.
If you own or run a recruitment business, you will know that staff salaries absorb 60% of your costs. That percentage can be even higher with under-performing businesses.
So obviously solving the ‘people-puzzle’ is critical. You will never grow a sustainable business without the right people in the right roles, doing the right things.
Indeed, this crucial topic is a key theme I will address during my upcoming Masterclass tour of South Africa and it’s so important that we made a ‘taster video’ where I share three massive ‘people-blunders’ I see owners and managers making all the time.
Watch this video on YouTube
- The business is severely hampered when the owner stays in a role he or she is no longer suitable for. This is a problem of epidemic proportions, and it has damaged and indeed derailed many businesses. For example, the founder insists on remaining in the ‘general management’ role, when in reality s/he is a very poor people-managers, and can contribute much more as a rainmaker, or an account manager, or in a strategic role. Or perhaps the owner insists on billing heavily, feels their worth is only proven if they ‘out-bill’ their team, when what the business needs from them is direction, or senior business development, or people management, or some deep attention to strategy. This is common; the high-billing owner, who unwittingly puts a cap on the growth and value of the business by trying to remain the recruiting rock-star. Owners staying in the wrong job have cost companies millions of dollars in value, and it happens everywhere.
- We have all seen it. The highest billing consultant is promoted into the manager role. This is not always a mistake, but it is often a disaster. Why? Because they are totally different jobs! They require different skills, competencies, and a different mindset. The assumption seems to be ‘well you can bill, so you can lead others to bill.” Oh dear! Often this leads to a ‘double disaster’. The promoted manager is unhappy, unsuccessful, bills less, earns less, and the company loses most of her billings. But on top of that, the team is in disarray, demotivated, and high staff turn-over results.
- I have spoken elsewhere of how poor recruitment agency managers are at recruiting their own staff. But perhaps an even more damaging failing is the fact that so many managers hold on to long term under-performing consultants. I am not advocating ‘hire and fire’, but living with serial mediocrity will send you bust. The misunderstanding here seems to be what the real cost of a consultant is, and the opportunity-cost of allowing a poor performing individual to occupy a seat, which otherwise would be filled by a consultant who can actually add to the profitability of the business.