How to Decide if You Should Go Off on Your Own

QUESTION: I am thinking about and considering going off on my own, and I have started feeling like the firm I am working with does not offer me enough in return for the 50% I give up on deals. For example, I pay for my own database, healthcare, and LinkedIn. I do get some client leads from time to time, but I feel like I am close to reaching the point of diminishing returns. What are your thoughts?   – Anonymous

ANSWER: For the recruiting firm owners out there, this is why people leave.

This is a great question and I appreciate you for asking it.

I do not know you well enough to make any specific recommendations. However, I think you know what you want to do. My thoughts are if you go off on your own and you own your own business and are going to hire people and mentor them, you never make them pay for anything. I sent my recruiters to conferences, paid for hotel rooms and flights.  I also paid for databases and the phone system. They did contribute a little bit to their healthcare, but I invested in their healthcare because I wanted Johnny and Mary to go home and feel like they were taken care of.

I actually paid lower commission rates of 35%. Everybody in my office knew that people got up to 50%.  For those the firms owners thinking, oh I am paying them more, it goes so much more than beyond the money. Owners need to look at the value provided beyond the physical office space, which your recruiters can get in a shared space for $300 or $400 a month. If a recruiter is paying for their own database for his own LinkedIn, basically the firm owner is setting them up on his own P&L where they know exactly what it costs.

Please do not think that I am saying to do this to be elusive, I am saying you want to show you are investing in your people. The best way to do it, as a firm owner is to hire search associates to work underneath your recruiters. If you are a recruiter at $200,000, $300,000, $400,000 in billings, you can grow that to $700,000 or $800,000 by adding some people and training them to be on his team.

Your argument, Anonymous, is 100% valid and it frustrates me as a firm owner to see that people still have those environments where basically they provide you an existence and this is why there is an incredibly high turnover in our business with high performing people. So as a search firm owner, we have 2 kinds of turnover. We have the people that that do not make it and we have the people that make it that leave.

Of the people that make it and leave, I think a lot of those people do off on their own.  Firm owners are left thinking, I cannot believe he or she left me. My questions to them are what did you do beyond providing the payroll service? Were you actively involved in their mentoring? Were you actively involved in their goal setting? Did you have an accountability system? Or goal?  And not just a goal setting system, everybody sets goals with their recruiters, except there is no follow through on it. In the absence of the follow through, the targets rarely happen.

So again, Anonymous, you have to look at yourself in the mirror. To go off on your own, is it just about the money or are you passionate to build something beyond a personal desk? It could be to be a solo operator, but what is the passion? What drives it other than the money you are giving up? The other thing, is do you want to sit down with your owner and ask what is the value proposition here? Here is my vision for this desk, and I need your buy in. Maybe you take a shot there too before you give up, but again not having a relationship with you, not really understanding what your needs are, I do not want to say you should or you should not. I am just trying to give you just some more questions and angles to look at, but I completely empathize with your situation.

I really hate it when I these situations because I think from an industry standpoint that is what keeps us like realtors (no disrespect to the real estate industry), with a bunch of part time people coming in and out all the time and very little sophistication. This then reinforces why our clients treat us poorly because of that same level of sophistication carries through with a lot of recruiters in their ability to present themselves as a talent acquisition or professional.

Great question. Thank you for it.

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