Is your next Recruitment Director currently a One-Man-Band?

I think Bonnie Tyler must have once worked in my market. I feel her pain when she sings; “Where have all the good men gone (editor note: and the women Bonnie, tsk tsk…) and where are all the Gods….?”.  Well you know what, they all went and set up their own recruitment businesses, that’s where they have gone.

Every month I must speak to a recruiter who is thinking of setting up on their own. Nothing wrong with that. I did it, most of my peers and friends in the industry have done it, and the vast majority have been highly successful at it. The resulting effect on the rest of the industry has been a marked one, and a consistent decline in the numbers of capable leaders working in large recruitment firms.

When we launched Hemisphere in 2003, the pool of experienced recruitment managers and directors in our market was outstanding. There isn’t enough room to name all those individuals here (and I certainly don’t want anyone to feel disgruntled that they aren’t on the ‘A’ list, lest they put a disparaging comment in the comments section of this article – but read previous blog as to why that’s a bad idea!) and many of these people were working in the large international recruitment businesses such as Michael Page, Robert Walters, Hudson, Robert Half, and Hays. The domestically owned organisations such as Chandler Macleod, Hamilton James & Bruce and Tanner Menzies also had some highly credible leaders and ‘market shakers’ within their walls.

So what happened? 

The mid 2000’s saw Talent2 start the exodus of senior leaders from the old Morgan & Banks/TMP business, Ambition brought about a level of senior departures from Michael Page and the Dunhill/Robert Walters merger certainly shook things up within that organization – with three founders of GOW Recruitment and two founders of T+O+M being borne out of that firm. BlueFin was launched by a senior recruiter from Hays, Charterhouse was formed out of HJ&B around the same time and many others followed soon after.

All of those firms still exist today and are highly successful businesses, however, with the odd exception (Andersen Partnership is one example) there hasn’t been much in the way of similar national/international high growth stories since then.

What has been much more common is the ‘one-man band (OMB)’. Having spent many hours in dialogue with senior recruitment managers/directors I can say with a high level of conviction that those individuals who are going to stay ‘vendor side’ are much more inclined to set up on their own, as opposed to finding another senior management or ‘C’ level role in a large international recruitment firm. The changes in the industry over the last 10 years has meant that there is a high level of perception that a senior management gig in one firm is very much like the same in another firm… and frankly its not far from the truth.

If you factor in the vastly decreased size of consulting teams in the larger recruitment firms with the view that it’s the ‘same old same old’, then one can see why so many executives decide to hang up their own shingle. After all, the barriers to entry are still ridiculously low, you are likely to have a handful of good contacts who are all but guaranteed to give you access to assignments to work on, you can have work/life balance, and provided the stars and planets align, you should be able to earn the same amount of money as you would in a senior management role. What’s not to like about that?!

The main drawback we encounter is when people have been a OMB for (generally speaking) around five years and they reach that point of “what next?”. They find that they miss the daily collaboration with others, the ability to celebrate wins and losses and in many cases, they miss having to be accountable to someone other than themselves. In some circumstances, personal situations may have changed and hence the need to be more present at home has diminished, meaning “I have more time on my hands now”.

Our clients are always thinking of new ways to attract recruiters to their platform, and I have written before about the more innovative ways firms are trying to do that. An increasing number of our specialist search/executive selection clients are very interested in talking to the OMB operator these days. If the OMB has managed to prove that they are able to generate a consistent revenue stream from a small but loyal client base, if they have a niche in a particular market but there is no obvious avenue to sell their business, then a case can certainly be made to incentivize the OMB to merge their business into the broader platform and benefit from having a ‘smaller slice of a bigger pie’.

We are managing two searches at the moment where our clients have asked us to proactively approach individuals running their own business (where there is no more than a couple of staff) to gauge levels of interest in joining forces. So far there appears to be genuine interest from some of those people in what that future could look like.

It is unlikely that the trend of setting up one’s own recruitment business is going to decline. Fortunately for those who aren’t interested in building a firm valued at $20 million, there are now more options than simply throwing the key away in 20 years’ time.

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