How To Introduce a Retained Service -Guest Podcast Interview With Howard Greenwood

Episode #186 How To Add A Retained Service Guest Interview With Howard Greenwood

Recurring revenue is the business model every organisation wants to add to their product offering; and recruitment is no exception.

Back in the day retained was THE service offering  however the recession changed all that.

Today retained is coming back and is a recruiting service that works for recruitment companies and their candidates and clients. 

So if this is the case why don’t more companies offer a retained recruiting service? It’s a question we asked Howard Greenwood, industry veteran and recognised expert on retained recruiting.

Howard gave us the step by step process that works and the exact strategy he used to change the Larsen Group from a contingency to a retained recruiting firm.

What you will discover
  • Why a retained service offer should be considered in all recruiting companies
  • How smaller £20k roles can also be offered on a retained basis
  • Why digital marketing can no longer be ignored
  • Retained is about a mindset shift
Resources from the episode

Sharon: So, welcome to our special guest, Howard Greenwood. Welcome, Howard. Now, Howard is the co-founder and one of the directors of LoveWorkLife. I’m going to let Howard tell you a little bit more about that, and his background, before we dive into today’s topic of conversation, which is around retained business and introducing retained service into a recruitment business. And we’ve got an excellent, meaty conversation to have with some great questions, and as Howard and I have just been having a quick chat, this is going to be really valuable if you are a recruitment business who have been thinking about, do you add in a retained service, how can you develop the retained service that you introduced some time ago but maybe not really developed. Here is a gentleman who has got much experience of taking a business and completely flipping it, in terms of the balance of contingency to retain. I’ll let Howard tell you a bit more about that.

So, Howard, should we start by just getting you to introduce yourself and just say a bit more about your lengthy background in the recruitment business?

Howard: Thanks for that introduction. A long background, yes. It’s been a long background. Indeed, it’s 25 years plus, in terms of the recruitment market and I would say when I entered the recruitment market, there wasn’t a computer on my desk, it was a Rolodex, a pen, a paper. The fax then came in, and it was such a joyous thing and now look at where we are now today.

Sharon: Oh.

Howard: I’ve been through much change. However, like most people, I sort of fell into recruitment. I did my time on the desks. I was a contract consultant, at Lorien, and there I worked very hard for nearly ten years at Lorien and got an opportunity to move up to Computer People and started to manage. Moreover, that’s where my real love of managing the process, the management recruitment process, really came from, and I was… I think my manager described me at the time was, “If it’s not shiny Greenwood, well we’re going to stick you in there, you can make it shine.”

I developed a powerful process of how to build businesses and how to establish offices to make them more collaborative, make them more productive, and I took on at that stage some of the worst-performing offices in CP, in the Computer People brand, to some of the best performing offices in the whole Adecco brand in the UK. I got an opportunity then to be promoted to be a director, and then suddenly I was directing the London and Southwest divisions of the Computer People, then took over Spring and Computer People and spreading across the UK, the north of England, Ireland, et cetera.

So much experience from that, in the big corporate world.

 I stepped out of the corporate world and went to work with some mid-sized agencies. I worked as a director for Evolution. I worked as a director for Robert Half, who are a very large financial organisation but were looking to bring a technology business in, so helped to develop their technology division, then, I started freelancing. 

I did some freelance work for 18 months for an ex-employee of mine who had started her business and became pregnant.

She wanted someone to come in and help her run her business. So I spent 18 months with her on a contract, running the business, developing the business and building her strategy.

I then became an MD of my own business and was running a company that was basically in a lot of turmoil.

I worked on the infrastructure and systems, including what we’re going to talk about putting a retained recruiting strategy together.

Then, I met my business partner, Paul Jacobs he was the head of Office Angels while at Adecco. Paul has got 40 years plus of recruiting experience so, a little bit older than me, I’d say. However, we both had the same style of management and the same style of leadership: In that, it’s not about us, it’s about the people, it’s about investing our time in the people, the reason why we get into the business is we love to see people achieve their goals.

We love to see people reach their limits and then go beyond their limits. And that’s what LoveWorkLife really champions, so we’re very different from most mentors and coaches; we are very invested in our people.

We love to see our people achieve things, and that’s how we build our business from there. We were very different from a normal Non-Exec Director, and we always say that a normal NED comes in and drink coffee in your board meetings, take notes and then comes back a bit later.

We want to be very vested in that business, drive the business, and we’re delighted about the way that we work with our clients and the way that we invest in our clients. I think one of the best ways to describe it, I had a client, one of my first clients, as I’ve been doing the consultancy on and off for several years before working with Paul and doing it officially.

One of my first clients the comment was; “we’d been on many courses, with a lot of different recruitment ‘gurus’. You guys seem to have been in there, you’ve done it. You’ve seen it. You’ve been in big business. You’ve been at the coal face of small companies too.

And you’ve been the MD, the tea boy, the account person, the admin person, the marketing; you understand every part of our business.

The other companies were very good at telling us things that we already knew, what they couldn’t tell us was what we didn’t know. I challenge you to tell us what we didn’t know. I was a bit sort of like are these guys going to do this and said “You give us insight and tell us things we don’t already know.”

“In fact after four months, we’ve billed more in the 4 months you’ve been working with us than we have in the eight months previously and you’ve opened up a whole different recruitment world to us that we didn’t even know existed with regards to management and how it worked from the cradle to the grave of the recruitment process from a business point of view.”

We even say to clients that we don’t want to sign you up on long term contracts, we want to sign you up on a month-long contract because we believe every time we come into your office, we need to be earning our money, we need to deliver quality and value to you.

Though we work in that manner with all our clients on a month rolling contract, that’s how we are, and we’re very proud of the clients that we work with and their achievements, and it’s their achievements, and that’s what we want.


Them to achieve the LoveWorkLife that they want and then we can move away from there.

So that’s a chequered history of my background.

 

Sharon: I think in terms of how you and I met, it was probably at this time last year as the chair of APSCO Yorkshire and I heard you do a talk around the subject of retained recruitment that we are talking about today.

Over the last 12 months working with our client base, going out to a whole variety of different events I am having more conversations with people who have got Retained on their mind. So, they’re exploring it, they’ve dabbled in it, thinking we need to do more, but having the time within the business to develop that service has proved a challenge for them.

As companies start to think about the retained business model within recruitment, from your experience of working with it, taking a business through the change process, what do you see as some of the pros and cons of the Retained model for a business in today’s recruitment market?

Howard: It’s very interesting first question. You’re right in what you’re saying, there’s a lot of companies out there that have got Retained on their mind and who can get Retained business. And I would say look at the pros of Retained, you look at that, you get your client on an exclusive basis, you’re getting higher fees, you’ll get part payment for your work, you’re getting actually paid for your work before you do your work from there.

You almost then create a formulaic process rather than just a contingency process, you create another process on top that can be repeated constantly, it’s how you sell that process, this is what we’ll get to, in terms of how recruiters fear the sell of that process.  Then you start to thinking about the candidate generation that goes on as a pro

Candidate generation that goes on in retained is different, from the candidate generation that goes on with normal continuous recruitment.: And the residual value of those candidates is huge.

The thing is a lot of contingency recruiters use a candidate generation process. Put the candidates through a recruitment process? And then never touch base with those candidates again!

… and we wonder why recruitment companies get a bad name.

If you’re a true Retained person, the quality of the candidates you get through that Retained process, are a genuine fee that you can use. The residual value of your output is huge, it’s not just one fee, it’s one, two, possibly three fees out of that; because candidates are experiencing a different relationship with you.

You’ve all seen massive amounts of candidate loyalty in this marketplace, and candidate loyalty adds a huge economic value to your business. If you do Retained properly, you will generate true candidate loyalty because candidates understand that you’re not fishing, you’re not just out there casting a net and hoping that the amount of fish that they can place is just enough.

They know that you’re working and I think sometimes just simply saying that you are a recruitment partner, you are head hunting on behalf of this business, and I challenge any recruitment company out there to go up to a client, or land a candidate and say, “I’m a recruiter, I’m looking for this type of person, et cetera, et cetera.”

And look at the response they get from a candidate. If they go up to a candidate and say, “I’ve been engaged by a client to head hunt you as a person.” And look at the difference in response that you get.

Calling saying that you are a head hunter. You are doing same process virtually that you would do as a contingency recruiter but you’re now head hunting the person, almost immediately the engagement from the candidate becomes huge because they feel, “Whoa! Someone’s headhunting me! Someone actually knows me.”

Yeah and it’s that little bit of spark, not just about that there, so that prestige is really important.

There’s lots of pros when it comes to a retained service.

The con signs are very few really.

Something that gets raised is pressure and how you deal with that. I go into lots of companies who are starting to take retainers.

They stay Retained on everything, and yet they can’t deliver. They should be delivering.

So, we’ll talk about that later in this talk with regards to the pressure on delivery and why that pressure is important.

So how you take on Retained is important. There’s a lack of trust from clients when we start to talk about Retained. And that lack of trust comes from the way you pitch to a client because you can’t pitch a contingency model and then you expect them to pay a Retained fee.

They have that leap of faith that I’m going to step across the bridge and pay a third, half, or whatever it’s going to be and that’s a lot of clients is a bit of a lead of faith,  considering the last 30 years, we’ve been doing it for free.

Sharon: Yes, I totally understand that.

Howard: The recruiting market have been charging 30, 40, 50% for their services and taking a third, 50% upfront, so clients do know about this, it’s how you sell it.

So, the lack of trust from clients is always there, but that is down to a lack of that track record of how you’re delivering the service to clients.

So, it’s critical to differentiate between your different recruiting products.

And the final thing I think it always needs is a bit of a con when people look at that, is take their terms and conditions and they bastardise it a little bit to put contingency at one end and then exclusivity and Retained at another. The terms and conditions usually aren’t concrete enough if ever they were challenged to go to court so it’s how you make the terms and conditions work for you that differentiate yourself from the normal contingency process.

There was a huge upside and once you get the upside of recruitment going and I’ve seen this for myself, that consultants average fee of, chalks up 6K on the board and the office is going, “Yay! 6K! 6K!” And the consultant comes over and says, “No, that’s a third of the fee, that’s just the Retained part.” And you can hear that sort of deathly quiet as people go, “That’s a third of the fee?”.  And so the upside if you start to get that manifesting through your business constantly, and some people see them placing a large deals on boards, and then the other consultants want a part of that.

So, the pros and cons are almost immaterial, okay? It’s all a pro if you get it right and it’s driving to get that service right and that is really about the belief system.

Sharon: It is interesting that you’ve commented that you’ve noticed that building and introducing a Retained service into a contingency business is on more and more peoples’ minds. I think that’s coming from a place of the market’s just expanded so much in recent years, there’s so much more competition, so people are thinking, “How do we stand out? How do we stay ahead of our competition?” Do you think that there’s an element of trend around a Retained model or it’s just getting Retained back on to business owners radars?

Howard: There’s a couple of ways of answering that. Is it a trend? No it’s not a trend.

As I said, it’s been around a long time. Head hunters are proud of their business and proud to charge high fees for their services. I think it’s out of necessity. The market’s changing and I was at the APSCO meeting just before Christmas and I think the stat, don’t quote me, it’s not exactly the stat was something around 30% every place that was made in the UK last year was made by an RPO.

Wow, that’s a lot of low hanging fruit that’s just disappeared out the SME marketplace.

And start to put on top of that the in-house recruitment model. So the market place that was 10 years ago, 15 years ago were, you created your own agency, you’d have a number of clients where you’re picking the low hanging fruit and you made a great living out of that and then expanded, expanded, expanded.

But that low hanging fruit is now getting smaller and smaller because the RPOs are picking that up and, obviously the in-house businesses are also picking that up.

So, the market’s changing from being quite a generalist market where lots of the major clients will still use agencies, but they want to still use agencies on the very niche level. They want to use them on the specialised level, so if you use agencies on a specialised level, then you should be paying for that agency, you should be paying for the service that you’re going after. After all, all these big clients are paying for all their other services, why are we a free service until we make a placement?

If you think about what’s happening in the recruitment market, if you don’t change with the marketplace in the next five years, then you could be facing a very, very difficult time. So, you have to start adding tools to your recruitment kit and one of the big tools that people want to add to it is the Retained service and I’m absolutely 100% behind that because everyone should have a Retained service.

It’s how you do that so, if you’re a specialised and become more niche, then having a Retained service is critical because what you’re talking about is really owning the candidate marketplace. If you can own the candidate marketplace and you have the product that people want to buy, then they should be purchasing that product upfront. They shouldn’t be waiting for you to be in competition with three or four other people.

It’s like walking up to an airport and saying you want a flight to Spain. Okay. Right. Jet2, Easy Jet, BA, et cetera, have all got flights going out today? Who’s going to offer the cheapest price?

Sharon: Yes.

Howard: You wouldn’t do that.

Sharon: No. No.

Howard: People expect the recruiters to do that, so we have to change the mindset of our clients and we have to change the mindset of our candidates and the mindset of our consultants in our businesses to really make that leap.

Now the headhunting market’s been doing that for forever and a day.

There is no difference from what we do to what they do, though they get paid upfront for what they do. They seem to be better, let’s be honest about that.

Look, we need to be better. There’s no difference really in what they do regarding recruitment functionality. So, is it a trend? No. It is necessity and I think the wise businesses owners need to make that change and need to add that into their recruitment portfolio, then it’s how you add it and what you get from that.

Sharon: So I guess that leads us quite naturally then onto this next conversation. So let’s say there’s a drive from a necessity point of view, things are continuing to evolve in the market as you say. So what do you think are some of the key things a business needs to consider if they are want to introduce a Retained service? Let’s say the minute they’re 100% contingency and they’re looking to introduce a Retained service, what’s the starting point for them?

Howard: I think the starting point has to be, I always talk about the three C’s of recruitment: Clients, Candidates, and Consultants. It has to start with consultants. The consultants must have the buy in to what’s actually happening, to what’s going on. They must have the belief that they can sell Retainers. And they have to understand what is involved in selling of that Retainer. And if you’ve got the buy in from the consultants then it becomes momentum.

So, you might have the buy in from 10, 15, 20% of your consultants. Once other consultants start selling then it becomes infectious. Why am I writing up a three-grand deal on the board here and getting really excited? When my mate just chalked up a seven grand Retainer and that’s 30% of the deal. Whoa! What am I doing? So it becomes infectious when people start to see that and they start to see why that’s happening.

You must start with your consultants. You must get that right- they must believe that they can sell a retained service.

Which leads to the second part, that you then need to provide training, and you need to have a strategy and I always talk about if you look at a business, a business will have some sort of mission statement. From that mission statement will come the strategy and the tactics so as part of your strategy and tactics is Retainer. You’ve got to think about your pricing strategy and your actual delivery strategy.

You can’t sell contingency and ask for a Retained fee because clients will look at you and say, “A week ago, you did that for free. Now you’re asking me to do it for more.” So you need to train your consultants on how to pitch and they need to be pitching it every single time they speak to a client about a role your Retained service.

Your pitching a different service. Let’s use buying a CRM service as an example.

Your CRM provider will ring you up and say, “For the vanilla version, you get this, and this will cost you x.”

The vanilla version plus this, this, and this which means you can do A, B, and C as well cost Y.

Y is always higher.

But what they do is start with a basic selling, start with the vanilla version so you understand the vanilla version.

So they need to pitch the contingency business constantly.

And then say, “However, if you want this as well, this is our Retained version, this is what you’d get.” And you can get two things. There’s where we separate that so there needs to be some training and development from all clients on the difference between contingency and Retained and then train your consultants to sell that every time they pitch to clients.

That’s the key. Every time. There’s no point, differentiating and say, “Oh only pitch on that one over there, not that one over there.”

Because consultants will never pitch that because they’re not used pitching, it must become part of that recruitment DNA it has to be part of the sell.

The other thing that we talked about early on is this is part of the cons was the terms and conditions not being fit for purpose. And what I mean by this, a lot of people will just say, “Well, you’ve engaged my services for recruitment that’s 33%, for CV production 33%. Finished product, 33%.” If they don’t get the finished product, a lot of clients, because of that lack of trust will push back and say, “I want my retained money back.”

And if they took that to a court, I’ve put lots of terms in front of solicitors, they say, “Well, because you haven’t provided a product, this looks like all of it’s linked together the end goal then you owe them the money back.” And you end up paying the Retainer back which has the knock-on effect on the business, but “oh if I’m going to do that, I’m going to have to give the money back, what’s the point of doing it?”

You must make each individual part divisible so on its own, you are engaging in purely for our recruitment services, nothing else. You are engaging purely for CV delivery, nothing else. You’re engaging me for delivery of a person into your desk, nothing else. And make it very strict. The client also needs to understand that, and I also think that when you sell to a client, you need to make it clear why it is a Retained service and what’s going on. Which goes back to your training pitch from there.

When then talk about candidate generation and the difference between a headhunters and a recruiter. And it’s the level of service they provide to the candidates and to the clients. The fact that they know their product so well, every recruiter goes and say, “Well I interview all my candidates face to face.” No, they interview them over the phone in general. Look at what happens when you get head hunted.

You get a researcher on the phone; “I am the searcher for the key Headhunters and I’ve identified you as a key prospect”, blah, blah, blah, et cetera, you get excited.

And you get through that researcher. Then the head-hunter calls you and talks to you about the role; Then they come and meet you.

So, the level of service is massively creeped up, okay? Well, hang on a minute, that’s expensive. Well it is expensive, but if you’re charging a higher fee for that, it should be expensive. You should get a far better level of service.

Sharon: Absolutely

Howard: When you provide your shortlist to your clients, your shortlist is far more dynamic. So when the client’s sat there and having to choose between two or three candidates that are brilliant rather I’ve four candidates, three interviewed that are actually atrocious and one is vaguely OK, no wonder you get your fees dropped down so much. Your actual performance and how you perform through the recruitment process has to increase and your level of service must be a high touch point service.

So, you need to differentiate the Retained service from contingency service and, I say, you need to sell that. The other side is that a lot of business owners expect this transition to happen overnight. It doesn’t happen overnight. With your consultants, you must consider the leap of faith from your clients, you must consider the amount of time it takes to get that sell into the business and that’s where I specialise in perfecting that sell.

It’s not going to happen overnight, there has to be a transition period where it swings, but it all starts with making sure that every time a consultant pitches for a job, they pitch contingency and Retained services at the same time. I work hard on that.

The next thing I sort of start to think about is, what do we do differently to the headhunters. As I said, they don’t do a 360 model. The 360 model in recruitment, if you look at the attrition in recruitment, you, if you told me a company that says, “Oh the 360 model works”, I’ll go “Show me your attrition rate” and they’ll go “Oh, well, I took six people on in the last quarter, so far, I’ve got rid of two, one’s on the runway to go, one’s not performing, I might get two out of that.” The attrition is high in that first three to six months of that concept and model.

However, if you develop that model where you’ve got a researcher, just dealing with candidates, you’ve got a resourcer of dealing with jobs and dealing with the client and you’ve got a salesperson. All of the sudden, it’s a different marketplace. Again, people think about the cost of that. That’s three people now dealing with a placement. However, if this research is bringing in candidates constantly, there’s a massive value in those candidates that should be placed so you get to increase your number of placements.

A salesperson selling the products as the resources that’s servicing the product to the clients. Therefore, the client’s getting two or three people involved in that service. Suddenly, your stickiness into that client increases.

Also, you’re at risk, if your 360 consultant walks out the door and you don’t know that client, the client’s is walking with them. Then you’re lowering your risk, you’re increasing your level of service, you become a genuine high touch point service. Now you could have a blended approach, a mix and match of those type of people, that is what the high-end headhunters do.

They charge a lot of money for that and they get paid a lot of money for that, but I think sometimes that belief system is, get the candidates and consultants believing in what you’re doing then the camera lights will come on, move away from the 360 model, put a process in place that actually works, and then deliver it in that way. I think there’s lots of things you can do when you start moving from contingency to Retain. It’s not just selling a contingency, and then trying to put a label on it and say, “Now pay for that.”

A client is not going to buy that so it’s a different type of service and sell, and there must be some proper planning in place and I always say proper planning prevents poor performance in these types of scenario.

Typical recruitment mumbo jumbo, but in this case, it is genuinely true. If you put the proper planning in place and you prepare properly then you will get the performance out of it that you want.

Sharon: You’ve used a word several times and I want to explore it more because you’ve mentioned that it’s the importance of getting consultants to believe in what they’re selling.

Howard: Actually whenever I work with companies and when I was working with my own teams and my businesses, one of the first things I always did a training session on mindset and working on the belief systems. And I tested it on lots of companies that I got into and try and challenge people and their mindset. I think mindset is very interesting, the mind is the most powerful muscle if you want to call it, in the body, and it can make you do lots and lots of different things.

And I always believed that there are two people inside you okay? There’s the good, perfect you and there is the imperfect you and these two people are balling constantly at each other.

What I mean by that and this is you know, I’m a prime example of that and I’m a prime example of how this will work. Last night, I came home, and I had gone to the gym and I got in, answered your e-mail first, and I’m getting dressed and I thought, “Still look a bit porky really. Should do something about that. Tell you what, tomorrow morning, I’m going to get up, 6:00am and I’m going to go for a run at 6 in the morning, I’ll be nice and fresh when I go to the meeting here.

The alarm went at 6:00 so the perfect me at midnight last night was up for a run and absolutely wants to do it. The imperfect me went Snooze. Snooze. Because that’s how people work. Now if that’s my mindset, that’s my belief system. I also believe that when people start to think that they can’t, what they do is they build pillars around them that lock them into the reasons why they can’t. Anything they look at says, “Oh I can’t do that, that proves I can’t do that, can’t do that, can’t do that.”

However, the perfect people that believe they can do it have the same belief system. They build pillars around them that demonstrates “I can do that, I can do that, that demonstrates I can do that.”

So it’s having the gumption that you have got these two people inside you and the imperfect person is building pillars around you that say, “You can’t do that.” And the perfect person is putting pillars around you that say you can.

Who’s going to win? So you’ve got to shut one up and make one dominant and if you make the perfect person inside you more dominant than the imperfect person, then you always start to achieve more and it’s about having that positive language inside your head, that “I can, I will, I will do this.” Rather than that imperfect language, “I can’t do this.”

One thing I will say to you and anyone who listens to my sessions and stuff like that, any consultant that walks into any meeting and says, “Oh I tried to do that.” I want to lean over the desk and grab them by the throat and shake them and say, “You tried?” Instantly, by using the word try, you’ve instantly said that you’re not going to deliver.  You meet me in a months’ time “I tried to do that, but it just didn’t happen.” These are the reasons why.

You’ve already built that belief system in your head that you’re going to try to do it rather than committing to something, so I work a lot on the belief system, getting people to understand difference between the two people inside them who are like, talking constantly and how you can control those people and how you can then build on that. It’s not just about individuals, it’s about the managers, it’s about the owners of the businesses having the belief that they can change their business and do that.

So it comes all the way down the line, then it bounces at the bottom and it goes up all the way up the line and if you create a belief system of “We can do this we can achieve this.”  And if you think about anybody else coming into that business that belief system becomes infectious and they start to believe they can do that and join in.

Look at Man United in the Ferguson years, they believe they can win, and they believe they can do it all the way through and Ferguson ran that all the way through the team, top to bottom and all the way back.

If Ferguson thought someone didn’t believe that, he got rid of them straight away. The whole team and supporters and everything was so in awe of Ferguson that when he left, they believed they would never be able to replace them and look what’s happened since then.

Sharon: Yes I love a good football analogy!

Howard: Yeah? And that is all about the belief system that anyone walking into Man United has still got this massive cloud of Alex Ferguson over them, believing “I can’t be as good as him, I can’t be as good as him.” Think, actually, “I’ve got to be as good as myself, and drive me.”

So a lot about belief system is about looking at other people and going, “I’ll never be as good as that person, therefore I won’t try, or I’ll try, but I know I’m going to fail so I can never be as good as that person.” But I always look at it and say, there’s always people who are above you who are better than you, there’s are always people below you, so if you try to reach to that person above you you’re never going to be that because all you’re thinking about is “I’m failing, I’m failing, I’m failing.”

If you always think about the person below you and think, “I can beat that person below me”, you’ll always beat them and therefore you’ll always have that false sense of winning so the person you’ve got to beat is yourself and you’ve got to really control yourself properly throughout  so the real change in mindset of, and again I’ll use another thing I use quite a lot in training is that black box thinking. If things go wrong, what people tend to do is to look at their crash site and go, “Right. It’s gone wrong here. We haven’t made enough Retainers this month. Here.” And they’re looking at the number of Retainers and go, “Hang on, that’s the crash site.”

If this were an aviation crash, an air crash, they’d go inside the plane, they’d find the black box, they’d open the black box and they’d go, “Right. The crash actually started way back here because it hasn’t crashed at the end of the month because we haven’t got Retainers. It crashed at the start of the month because we weren’t pitching to clients, we weren’t pitching Retainers. We didn’t sell it with conviction. I’ve listened to all those calls so there needs to be some training on this part here.”

So we’ve got to start thinking about black box thinking. It shouldn’t be a blame culture, it should be a culture of collaboration, a culture where people feel free to say, “I’m failing. Help me.” while I’m failing.

Let’s open up the little black box, look inside it. Right. This is what’s going wrong, let’s do that. Rather than looking at the end of the month, you’ve not hit your figures, why haven’t you hit your figures? And there’s instantly always, you haven’t been on the phone enough. It’s nothing to do with that, it’s to do with what’s going on in the process.

It’s all about that belief system creating an atmosphere of collaboration, a freedom of speech type atmosphere where you can really get where they feel that their thoughts count, they feel what they do counts toward the business, which means if they feel that their input counts with this business, then their belief system goes up and they’re adding value to the business.

Where a lot of managers and owners push people down because of the pressure of, I’ve got to get an ROI from this person.

I’m not getting an ROI so I’m going to put a lot of pressure on them to get that and that pressure has the reverse affect and makes that imperfect person go, “Told you. Told you. Told you.”

Sharon: Yes. And sometimes they are in such a rut, and it’s very difficult for them to climb back out of that. And I think as you were talking there, you mentioned about this thread coming all the way through the business , from the top, coming all the way down to the teams which kind of made me wonder when I think about some of the conversations I’ve had around introducing retained.

Is there an ideal way to do this or are there different options in terms of, do you just introduce it and train everybody in the business or can it be a case of start with the team, getting it embedded there, and then as you say the infection of the results can spread?

Is there a right or wrong way of introducing a retained service?

Howard: Yeah, it’s a really interesting question and when I got the question through, I read the question and I was thinking, “Okay that’s a good way of looking at it.”

Recruitment is full of people daily in every recruitment agency trying to reinvent the wheel. They constantly try to reinvent the wheel.

And having consultants fight the system. As a manager or leader, you have a system that works- “If you follow this process, you will be successful.” And they fight against that process and they’re never successful!

So, I think if you’re going to introduce Retained services, then take a leaf out of the headhunters book. Look at what the headhunters actually truly do and think about it “Right. I don’t have to reinvent the wheel when someone’s already got the wheel working? I’ve just got to look at how that wheel actually works and implement that wheel into my business.”

So, if you go into a headhunters operation and you look at what they do, their CRM is humming with money because they’ve spoken to so many candidates, they’ve treated their candidates in such a perfect way that when you speak and pick up the phone, that candidate will engage with you.

Sharon: Right.

Howard: That candidate will not only engage with you, they’ll probably give you someone else to engage with so CRM first is really important. Head hunting them becomes an art. It’s the art of actually capturing the hearts and minds of the candidates so they actually come to you constantly when they need something. Whether they come into you as a candidate or they come to you as a client, they’ll come to you.

Sharon: Right.

Howard: As I alluded to, when we talked about going from contingency to Retained, you didn’t have to change your model to a 360 model, too. Here are researchers, here are resources, here are salespeople, or here’s a blend. Could you have a researcher? Could you have someone doing the resourcing and the selling at the same time? Et cetera, et cetera. And how that works. It could be that you may have four or five people who are selling, two or three who are doing the researching so they’re flooding you with candidates constantly, all the way through that.

So the candidate generation becomes the real key difference. You could have lots of AI you can use, you’ve got lots of different elements to use, I-intro, SourceBreaker, et cetera. You’ve got all these tools that you can use, but it doesn’t get away from the human element and the human element is always going to be the priority element when it comes to head hunting because what the client is going to do when that candidate gets on site, they’re going to find out how much bang have I got for my buck?

So have I got a candidate who is absolutely brilliant?

If they have a skill set and the behavioural set and they are brilliant, the next thing they’re going to try to discover from the candidate is, what was the recruitment service like? What did I pay for? What did I get?

Sharon: Right.

Howard: And if you haven’t got a brilliant service, then they say Well, that’s no different from what our contingency recruiter does. They basically realise, I have a phone call with this person, I had a minute screen call with this person, I met with this person, they met before the interview, they’re getting all this information, they do this. They do that. They do this. Etc cetera, etc cetera. All of a sudden, he goes, “Ah! I now see what I paid for.”

But once you see a candidate that’s better than what I see coming through the contingency recruitment and the quality of service they’ve provided has been absolutely hugely different. So there seems to be a blended approach when we started, resourcing, getting the process right, we don’t have to reinvent the wheel. We can put what’s already in process in place and then tailor that to each, individual business, and then add the appropriate AI to that that will help generate candidates or increase your service to your client that differentiates you from your market competitors and that’s the thing, the market swings.

How you differentiate yourself is important so thinking new ways to resource and new ways to bring Retained business in, to me is a bit of a strange thing because it’s already here.

Yes, we could improve on what we’ve got, but trying to reinvent the wheel is just a bit of a strange situation so the wheel is already running whether you’re running on that wheel or not and if you’re not running on that wheel then it’s how to get on to that wheel, how to make that wheel run for you in a perfect way in what you do. And that to me is sort of the way that I’ve been looking at it from that it needs to be a blended approach or higher touch point to human interaction and AI to help expediate the resourcing power and the client’s perception of your service.

Sharon: And I think you’ve, in different parts of our conversation so far, you’ve probably answered the next question that’s on my mind in terms of, if a business owner, I’ve had people say this that they’re not, they’re choosing right now, not to pursue a Retained model because they have, they’re not sure that they’ve got the right talent in the business to sell Retained because it is a different product, it’s a different sell, but I guess when you think about what you’ve shared with us so far about belief, around mindsets, around training, but then also around the model, the 360 model versus the 180 model and the different examples you’ve given us, it might be more than 180.

Actually what I’m hearing you say is that, okay there will be a significant piece of change, the business to introduce and lead and manage, resulting in, probably, shifting in model and the roles that you have in the business away from 360. But getting those roles in place, training people, making sure people got the belief and have go the right mindset, have got the actually, it is more than achievable, not having, or believing you haven’t got the right talent shouldn’t be a blocker because actually you need to look at the talent that you’ve got, you need to look at the model, you need to consider people’s mindset and you need to train.

So would you agree with that? Because I’m trying to put all the pieces together to answer that question for myself. What do you think?

Howard: I think in this competitive marketplace, there is no harm in upscaling your staff. There is no harm in improving the service to both candidate and clients, because you improve the service of candidate and client, you’ll improve the longevity of your consultant in your business. The return investment for yourself as the custodian of the business.

Howard: So there’s nothing wrong with training and keeping on developing your staff where a lot of agencies go on that first three to six months of heavy training and putting that training in place and very seldom do anymore training after that.

They expect just to learn as you’re on the job and I think that there needs to be improvement of recruitment skills all around. And if you look across the whole marketplace from, if you go away and speak to clients and I do this with a lot of agencies, they fear having a genuinely open conversation with a clients about the recruitment marketplace because they’re afraid of being labelled as car salesmen or estate agent, et cetera.

A true story, I was camping in Yorkshire Dales and in a pub, I come upon two different people whilst queuing for a drink. Both did the same job. First guy says, “Oh what are you doing camping, et cetera, oh what do you do for a living.” A Car salesman. he said, “Oh! Car salesman.” And he was quite proud of that, being a car salesman.

A couple of hours later, at the bar again and another guy’s was there. Chatting away, he asked me what I did, told him what I did, asked him what he did. “I sell Ferraris.” There was a marked difference in the pride that he sells Ferraris. Now you go in asking a recruiter what they do, “I’m a a a a a recruiter.”

Nobody’s likes to say “Recruiter” if I’m a headhunter.

So the passion in what people do is very different so upscaling peoples’ skills and giving them the commitment and pride in what they’re doing will, emanate that throughout their life constantly and so there’s nothing wrong with a shift in skillset, there’s nothing wrong with improving the skillset in your company.

So it’s all about that and how we can drive that improvement of skillsets.

What we’ve got to improve is the high-quality touch point that we engage with our candidates and our clients and keeping that touch point really high. That is when we’ve taken contingency work on, we’ll take four, five, seven, eight, ten jobs on and we only actually service two, I think the national stat is for every 10 jobs we take on, we place two. Head Hunting, they’re almost on one on one. Their high touch point is huge.

People say, “Well, yeah”, but they’re only making one placement a month, but they are making one placement a month, but it’s 20, 30, 40, 50K placement fee and rather than making 2 placements at 6K each and be really happy about that.

Wow. There’s a massive difference in that.

So having that change in that and that to me is all about communications. Communication from the top down to the consultants, from the consultants back up.  Communicating that out to the marketplace and how the marketplace perceives you and this is the big thing I would say is that clients, I’ll go to agencies and they’ll go, “We’re the best agency in this and we’re the best agency in that,” et cetera, et cetera, et cetera.

And I’ll say, “Give me five of your clients, I’ll ring five of your clients, let me look at your perception of what your clients think about you.” Because your perception doesn’t really count. It’s what they think about you.

They are buying your business. If that perception isn’t brilliant, then we need to change, we need to create something, because it’s their perception that is reality, not your perception. And it’s true of consultants, their perception of their performance may be different from what the reality is so that communication part has to be absolutely huge so when we talk about change, change is all about communicating the change and the positive reasons why we are changing, what that change is all about.

So if you understand the rules of engagement when we start to change and why we’re changing, and the period of time to change over, and it means we understand what we’re doing. It means we understand that certain clients we will walk away from because that improves our service. Certain clients we want to work with because that improves our service. We need to train and up-skill our own staff to really replicate what we want to achieve in the marketplace because perception of recruitment from the marketplace is very different from our perceptions.

And I’m sure you guys speak to a lot of recruitment owners who say, “Oh, we are brilliant, we’re so brilliant at it,” et cetera, et cetera. Sometimes you’ve got to take your head out of the clouds and go out into the recruitment marketplace to truly understand whats been said and that’s a fearful thing for recruiters.

If people told me that that is what their perception of my business is, instantly I’d say, “Right. Let’s look at the crash site, that’s the crash site, take the black box out, let’s go back and look at why that is, let’s change it.”

Sharon: Let’s change it, yeah.

Howard: But it’s not just about changing from contingency to retained. It’s about changing your levels of service all the way through. It’s about communication, mindset, and understanding the rules of engagement to get where you want to be, and that’s where strategy and tactics come into play because then you have rules of engagement within the business and everyone in business knows what’s going on. It’s communicating and across the whole of the business from there.

Sharon: I like that way of thinking about it. Actually, it’s completely up levelling. Now you mentioned it’s about evolution, it’s not about change. Businesses are constantly evolving. Of course, technology is constantly evolving at a rapid pace as well and you’ve eluded to the role of AI with different products available. What are your thoughts on the role of AI and tech and experience that clients and candidates can get?

Howard: Let’s put the cards out, being a lover of tech, I was a tech recruiter and I love technology. Technology has massively revolutionised the world, it’s changed the world.

Let’s look at it from a recruitment perspective, okay? So when we started this conversation, early 90’s, Rolodex on my desk, all I’ve done is swap my Rolodex for a PC or a laptop. So just the way I store my data has changed, that’s all it is. It’s now on a Cloud somewhere, but rather on a piece of paper. It’s floating around out there somewhere on the Cloud. Brilliant. Okay.

Rather than post the CV’s, people e-mail the CV’s, and I e-mail them back out again, okay? So that’s just now an electronic version of the postman coming in and out.

How I find candidates, though, has changed. Before, I would put my contract ad in Freelance Informer and that advert would be written on a Monday to go out on the Wednesday, sorry, Thursday advert. So I’ve got four days before the advert even gets out into the general press. I think I got three days until the CV’s come back to me so I’m probably going to add that to the following Monday so it’s seven days before I can start really servicing the client so it’s speeded all of that up, okay?

What it means is I can get access to more candidates so quickly. Where I had to genuinely head hunt my candidates in the old days, I had to find a candidate, generate a lead off that candidate for another candidate, call that candidate, had to find the number. Because I was trained in that method, if that candidate’s working with that client, find a way to get a hold of that client, they didn’t have mobiles so you would have to then phone their desk phones and their home phones, okay?

We’ve now got mobile so I’ll send a text and I would say, if you open up your mobile, I bet on the front page, you’ll have Facebook so you communicate to them through Facebook, you have messenger, you can communicate through messenger, you have WhatsApp, you can communicate through WhatsApp, and the list goes on of all the ways to communicate.

Communication has changed from just being verbal to actual AI and verbal, but it needs to be a blended approach. Any of those kinds of recruiter who just think “I can just do it by being a keyboard warrior”, you’re wrong. Any of those recruiters who think, “I should be old school, I should be on the phone 10 hours a day, blah blah blah.” You’re wrong.

There needs to be a genuine blended approach from both to do the right things. If your AI is good at bringing candidates to you, brilliant! You’ve got candidates  far quicker than before. If you could then find out where that candidate should be working, so you investigate the fact SourceBreaker and that gives you all that type of information, before you had to do yourself. However, there’s still the major part of recruitment is that humanization of the process, talking to you candidate, talking to your clients, okay?

And I remember the tech boom in the early 2000’s, they were all there, and they could do this. This is the death of the recruitment market. Well, that was 18, 19 years ago. Either the recruitment market has had a very long, lingering death or we’re not dying.

I’ve just checked my pulse and I’m not dying. So we’ve got to embrace tech because tech is coming and tech will change recruitment, okay? But you will not get away from that human interaction in there so what you’ve got to do is you’ve got to find the right technology that benefits your client and your candidates.

Now whether that’s how you bring the tech candidate to you, the process that you work with your candidates, so should you have an app the candidate could log into so they can put all their details into an app? Should you have a portal they log into they could all go into that you could have quite a number of candidates logging onto that portal and everyone could work through that portal and that portal has interaction parts, et cetera, et cetera, so it helps the candidate through the process? It helps the client through the process?

There’s lots of things we could start to add and say you could add those things from a technology point of view which then increases our level of service to our clients. You have an app for everything nowadays.

Sharon: There is. Absolutely.

Howard: There’s an absolute app for everything. My son’s doing his driving lessons and there’s an app now that you pay five pounds,  for that will find you the quickest driving test that you can find so all the actual people that cancelled the driving lessons, et cetera, they now click on the app. You pay five pound for that? And I say “Why don’t they just ring up the driving centre and ask if you’ve got cancellation?” It’s a lot cheaper. “It’s a lot quicker with the app Dad”.

We’ve got to start thinking of, this is the big mind shift that I’ve talked about another conference last year, is that technology’s coming in. Unless we keep with the technology, we’re going to lose very, very quickly. There’s a digital evolution going on, I think, it’s a digital wave coming in to crash on the shore so either you ride the wave or you sit on the shore and get washed away.

If you don’t adapt, you’ll get washed away. So if you think, let’s look at the average age of people coming into the recruitment market at the moment between 23 and 30. They’re all millennials or the next generation. Yeah? And how do they interact? They interact through video. We’re doing a video here, and a podcast yeah?

So the market’s changing from being a paper based market to a technology market. So how we interact with that market has to change as well. So we’ve talked about portals. We’re doing a video here we can use as product for a video interview, why are we not doing video interviewing for our clients.

We might be videoing job specs and sending that candidate, et cetera, et cetera. And so it goes it goes on and so technology prevents more market buzz and how we use that technology will increase our touch point and will increase our communication in the marketplace.

But it won’t get away from knowing your product inside and out, I have to meet my product. Now here I’m not meeting you personally, I’m sat in Leeds and you’re sat there somewhere in the lovely Lakes, okay? But we’re not meeting each other. Look, because you can see my body language, you can see how I’m reacting, so if you can imagine this in an interview, when I’m interviewing I can see it if you’re engaged with what I’m saying to you, but on the phone I might be thinking, “Are they engaged or are they not? I’m not too sure.”

We need a fundamental change all the way through and selling Retained is just a part of that.

Sharon: Yeah. And I think leading on to perhaps, for me a last question, I don’t know if there’s any additional things that you want to share, but something that does come up, when recruitment companies and business owners are thinking about executive search, and then their experience is contingency, one of the things that they will, perhaps, have in their mind is that, “Well, Retained isn’t going to work for us because our, the jobs that we work and our candidate base isn’t at a senior executive level.”

What are your thoughts around suitable roles that work for the Retained model and does it differ to contingency? Or not? Is it reserved for more senior roles?

Howard: So let’s look at this in a very different way. So increasing the number of companies that want to provide Retained services, that need to differentiate their service and therefore, where are you pitching your service at? And I always look at this in a very simple way, that you can’t pitch a contingency service and Retained service, it has to be different. The fundamentals are very, very similar.

And I always look at this and say, if you walk into McDonald’s, you can buy McDonald’s food and you get the same service everywhere you go, hence why they’re the biggest restaurant chain in the world. Same service, same food, same product. However, it’s a cheap commodity. It’s a contingency commodity. If you look at it in recruitment. You walk into a Michelin Star restaurant and for the same beef burger, you’re now paying 30 quid, rather whatever it is at McDonald’s. I’ve not eaten at McDonald’s for quite a long time so I’ve no idea what they’re charging nowadays. Let’s call it two quid, okay?

 

And what’s the difference? The process of making the burger is almost identical. The product is almost identical. It’s the quality of the product and how that product is served to you. As you walk through the door, the Maître d meets you, they talk you the table, they explain the menu to you, they give you everything that you want and they make the experience absolutely, undeniably enjoyable.

Sharon: Yeah.

Howard: McDonald’s, queuing in McDonald’s is not an enjoyable experience. That’s what clients do on contingency basis. They queue at McDonald’s to wait for someone to give them a burger rather than going through a headhunter that will give them the Michelin star, the five star treatment.

What you’re talking about is which jobs to actually pitch a Retainer at. Anybody can walk into a Michelin star restaurant and get the Michelin star treatment. So if you train all your staff to pitch contingency and pitch Retained then you can almost go at any level, yes I would say anything over 50K should be on a retainer. Anything local you should be interviewing face to face, any client facing role should be interviewing face to face to just to uplift your level of service .

But you’ve got to be very careful about is not trying to take every single job on as a Retainer. You have to be open and honest with your client. So you have to be honest enough to say, “Mr. Client, I’m not going to take that retainer, I’ve already got 10 candidates I know can do that job straight away, let me just work with them straight away.” And not push that, too.

Also when working on a Retained basis and say, “Look, Mr. Client, what you’re looking for is going to take me an awful long time to find. You’re looking for a very rare animal here. “I can’t guarantee that I can find that item, hence why you’re…” So the conditions need to be divisible so if I take it on a Retained basis, you’re going to retain me to do the search and selection part, okay? I will do the search and selection part. Once I deliver that, I will deliver CVs, but I will give you an awful lot of communication on a very regular basis, telling you what I’ve done and where I am. Then we can then start to change and bolster the recruitment process if required to get the right people.

Whether, that’s a 20 grand role or a 500 grand role, the process is exactly the same. Unless you’re selling it constantly to your client, your client never knows the difference.

But Retained people like to speak to clients, they go, “My average fee is 25%, my normal fees where I pitch in, and when I’m out pitching Retained, I’m pitching 20%.” I always go, “Why? Why are you doing that?” It’s like, “Here’s my really poor service, and that’s going to be 25%. Here’s my super duper service, that’s 20%.” Wow! 

Sharon: Doesn’t make sense, does it?

Howard: It has to be a trade, it has to be a choice between contingency and Retained when offering your services to your client. If you’re doing that properly and pitching that in every single way, you give the clients choice in what they choose. How good your salesperson is will depend on how much you get contingency and how much you get on Retain, but if you give the client the choice, then they make the decision for you.

With the Retained service, whether you pay that person 20K or 500K, it makes no difference. Retain me to do that piece of work and I’ll find you the best person, not the faster person that’s on the market.

And there’s a big difference in that, that with contingency means that you fish in the pool that are mainly people that are looking for a job. Head hunting, you go the marketplace and you live in the passive marketplace and you try to generate candidates from that passive marketplace. That takes time, but the level of service that you give to that passive marketplace and the quality of candidates that come out of that are far superior.

I have clients waiting that little bit longer to get a far superior product. So clients will hire on skills and fire on that behaviours, but if you spend your time working on the behavioural piece and to do that we have to invest money and time to get the right behavioural set right and all of a sudden you get better quality candidates to interview which massively knocks down the cost of recruitment because you’re not having to repeat that recruitment process as often because you retain that person longer.

So where you pitch it is always a tricky one, but you pitch it at everybody, then you haven’t lost anything. You’ve only got an opportunity to pitch the retainer and get contingency. If you only pitch contingency, you’re only going to get contingency. You only pitch Retained, you might get driven back to a contingency. If you pitch them both and give the client that option and you sell it properly, you can potentially upsell to the Retained service rather than not having that option at all.

Sharon: Yeah.

Howard: That makes sense?

Sharon: Yeah. Absolutely.

As we start to bring things to a close, are there any areas that you think we haven’t covered that you want to just say a few words about because I think you’ve shared some fantastic, really, really helpful insights with people that I know, are going to get a lot of value from this so thank you.

Howard: It’s a pleasure, yeah.

Have I missed anything? We talked about a lot of different things. I think from my point of view is, talking to business owners and talking to consultants, it’s not should I go Retained? It’s when I go Retained.

Sharon: Right.

Howard: It shouldn’t be when I go Retained. It’s I’m going Retained, what do I need to put into place?

If you fear that change, then in three, four, five years’ time, it would be too late. And this isn’t even first mover advantage and trying to get a first mover advantage because a lot of people are already doing this. This is about doing the right thing for the business, increasing the profitability of your business. If you say, “Actually this month, 80% of my business is Retained, I’ve already received 33% of that service as being invoiced and billed.” Suddenly it makes a whole big difference.

Now if I look at say, one of the companies that I took through over an 18-month period from Retained business, their average fee was three and a half k, when I took over, that’s a thing. When I finished, their average fee a few years later was 10K. So a big jump. However, the Retained average fee was 18K plus. So, suddenly, not have I just elevated my business, I’ve elevated the revenue generation that’s coming through my business.

And what actually happens when you look at that is that people start to think, “Why am I working this 20, 25K role? I could be working a 40K role.” 

“Why am I working this 40K role? I should be working at 50K. Why am I working at 50K? Why not work at 100K?” Then all of a sudden, you’ve got 200, 300K salaries coming to you because you’re working now as a headhunter. You go and talk to more headhunters “Oh I’ve just got me 100K plus, 200K plus, 500K plus.” Okay? You look on their website, how many roles are at 50K? Lots of them. So even the headhunters come down the value chain in their eyes to get roles.

Why aren’t we going up the value chain? Why are we hamstringing ourselves to get contingency business at a lower level? Think about what In-House and RPO are doing, they’re hoovering up all of that lower level work, so if you carry on in that low level market, there will be a time where there’s not a great deal for you to go at. And there’s so much competition. There’s the 35 to 40,000 agencies in the country now and there’s about 4-5,000 new agencies every year and about 3,000 agencies die every year. We are heading toward recession, there will be a re-aligning of agencies.

However, those that can provide clients with a quality service and a service that differentiates you from everybody else, we’ll go through that recession on an upward curve.

Sharon: Yes.

Howard: So you’ve got to start changing now to do that and I think that’s thing I would say to all recruitment owners, it’s not should I go? It’s not when you go, it’s I am going, but I need to get the right process in place.

Sharon:Brilliant. Well, thank you so much for your time, sharing all your experiences, some great stories there as well. If anybody wants to get in touch with you, Howard, just share with people your contact details.

Howard: Okay.

So my e-mail address is howard@loveworklife.com. My web address is www.loveworklifeconsulting.com and if you want to contact me on my mobile, it’s 07966251582. Or find me on LinkedIn, Howard Greenwood. I’m on LinkedIn, I’m on Twitter, find me on Twitter, from there and you can contact me through all those portals.

 

Sharon: Fantastic. Great talking to you and seeing you again, Howard. Hopefully we’ll get to have a beer pretty soon.

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