Episode 142 – Why Recruiting for Sales Positions in Small Service Firms is Different and How to Adapt – Member Case by Carter Hopkins

Recruiting for sales positions in a small service firm is not the same as recruiting for sales positions in large service firm, or in a product company. This session will help you avoid making costly hiring mistakes as you build out your sales team.


Greg Alexander [00:00:10] Hi, everyone. This is Greg Alexander, the host of the Pro Serv Podcast, brought to you by Collective 54, the first community dedicated to the boutique professional services industry. On today’s episode, we’re going to discuss recruiting salespeople into a small services firm, which is a very precise recruiting process. And we have a wonderful role model with us today. His name is Carter Hopkins, and he’s a member of Collective 54, and he runs a firm that this is what they do. They recruit for sales, and he’s successfully done this for several of our members. So he’s got a lot to offer on this topic. So, Carter, it’s good to see you. Please introduce yourself to the audience. 

Carter Hopkins [00:00:59] Yes, they’re great. Thank you so much for having me. Honestly honored that you asked me to be on the podcast. So, yeah, I’m the founder of Pursuit and we are a sales and marketing recruiting firm that specializes in helping our partners scale out their sales and marketing function with top talent. 

Greg Alexander [00:01:16] Fantastic. So let’s jump into it. So my first question is how is recruiting for sales positions inside services firms different than recruiting for a similar role in a product company? 

Carter Hopkins [00:01:31] Absolutely. I think a. You know, for me, recruiting for sales in general is so different than any other type of recruiting out there. And that’s really the reason I started our company eight years ago, is because I there are a million recruiting firms out there. There’s not a lot of sales recruiting firms. And I believe sales recruiting done well is very, very different than recruiting an engineer or recruiting somebody in I.T. or something like that. And the reason why is it’s it’s it’s not as much about the resume. It’s a lot of it is about the intangibles. It’s about the person. And there’s no certification on a resume that’s going to sell anything. And so, you know, our approach to sales recruiting and don’t get me wrong, a lot of times we are looking for specific things on a resume as well. We’re looking for those intangibles that you may not necessarily be able to to see on the resume. And I think that makes it a little bit different, as well as recruiting for a professional services firm and sales within a professional services firm. Just the motion is a lot different than it is when you’re selling a product, you’re selling a product. A lot of times it’s the same sales pitch over and over and it doesn’t really have to be a solutions based sell. And when you’re recruiting somebody to a professional to sell within a professional services firm, it’s not tangible. Your the sell itself looks so different than it does when it is one product and you’re selling it the exact same way every time. Yeah. 

Greg Alexander [00:03:12] I agree. That’s a that’s a really good point to bring out. You know, sell services. You’re selling the intangible as a product, as a tangible. That’s a very different emotion. So that that’s a good ad. All right. Let me let me ask the next question, which is, you know, our our membership, because you’re a member and, you know, this is is focused on boutiques, which is code for smaller firms. So let’s talk about the size dimension. So when you’re recruiting sales positions for a small company as opposed to a large company, how is that different? 

Carter Hopkins [00:03:44] Yeah. Working at a big company. Opposed to working at a small company is so different. And you know, the thing that I would encourage members that are listening to this is when you recruit, you need to sell for what you are. And be very upfront and honest what you are with these candidates. And if the candidate is the right candidate for your small firm, that will excite them. If the candidate is the wrong candidate and you’re in, you are going through the good and the bad about working for a small firm, it will scare them away. And so for us, you know, for me, I started the company eight years ago and we’ve built it out. And, you know, I have when people come in to interview with me, I have to tell them, hey, it’s it it’s not a huge firm. We may not have all of the benefits for a lot of these sales reps that are coming from from big firms. What I see is they have a ton of resources. They have a marketing department, they have all of these different resources that they have access to. And then you throw them into a small environment and they’re not used to that. Like they’re like, Hey, where’s where is the client marketing collateral? It’s like, Well, I don’t know. You may have to create that kind of small firm. And so, you know, I think for me personally, I love small business, obviously. And if you sell it correctly, because to me, there’s a lot of advantages of a small firm. Candidates want to know that they can move up quickly. And I believe that you can in a small firm, they want to know that there’s not as much team in to work through. In a small company like that. There is a big company. They want to know that they have access to the founder. There’s a lot of selling points that you you can talk to candidates about that are true. But I would also say almost sell against your opportunity. Hey, here’s what it’s not in the interview process and what it will do. We’ve lost candidates that I liked and I thought could have been good, but they didn’t want that. And I would rather know that in the interview process than figure that out four months down the road and have them leave. 

Greg Alexander [00:05:43] Yeah, I like that. So against it, that makes it’s kind of reverse psychology. And I agree with you. I can’t tell you how many times I’ve seen our membership and even outside of our membership, people get enamored, you know, with the person with 20 years of industry experience, you know, try to bring him in to this small firm. And it’s a trainwreck because they can’t scale down to a small firm. They’re used to being surrounded by all these resources and small firm. It’s it’s largely, you know, building the plane as you’re flying the plane. And you need scrappy people that can make it happen. And sometimes these big company people, they have a really hard time scaling down like that. So that’s a mistake. We’d like all of our members to avoid making speak. 

Carter Hopkins [00:06:25] And I think real quick on that, Greg, another selling point that I believe in small business for is if you’re in sales, you want to try to you want to try to create value within your company as an individual. And I believe it’s easier to create value for a sales rep in a small company than in a big company. And the reason why is because when you work for a big company and you walk in there and the name on your shirt sells itself, yeah, it’s really hard. You’re very replaceable. Yeah, very replaceable because the company’s buy, the buyer is buying from the company and not from you. When you work for a small company and you walk in there. And when we were a, you know, a six person company that preceded you, and our sales rep walks into the room and says, Hey, we’re pursued. They don’t know who pursuit is. So they’re buying from David. They’re buying from a person opposed to buying from a company. And so for me, that’s one of the reasons I always we work with a lot of small companies, and that’s one of our selling points to candidates about going to a small company. You may miss out on some benefits and some of those things, but you’re able to create so much more value for the company, which in turn creates value for yourself. 

Greg Alexander [00:07:33] Yeah, good point. So let’s get to one of the biggest mistakes that members are making right now, and that is they’re over hiring in the sales leadership role and they’re hiring for it too early. Yeah, you and I have spoken about this previously. I’d love for you to share with our members why you think this mistake is happening and maybe what to do about it. 

Carter Hopkins [00:07:59] Yeah, I think so. Here’s kind of what I see. And we have the opportunity to work with some professional services firms, and a lot of times it’s on their first sales hire and you know, they’ve been they’ve been the CEO and they’ve been selling more or less and they may not even wait to sell. Yeah, they may like the delivery side of things and they may be specialized in that, but they find themselves selling and then they listen to Greg and they listen to collective 54. They go, Hey, I need to scale out my sales team. And and they reach out to me. And a lot of times they want us. They want a sales leader. They think that they want a sales leader. That can be a player coach at first that can come in and is going to be an individual contributor. And then go into sales leadership. Right. And what I find is, you know, they want somebody that’s been leading people. Mm hmm. Because they want them to own that sales function. But the hard part about that is somebody that’s been leading people. It’s very hard for them to go back and to go back to selling all day, every day. Right. And they end up frustrated and it ends up not working out well, in theory, in my opinion, from what I’ve seen. And so, you know, I always in most I won’t say always in most scenarios, I believe in hiring somebody that’s going to be a straight sales rep. That’s a little bit probably junior that has no problem reaching out 30, 40 times a day. The person that’s been leading other people to make 40 calls a day is really hard to get them to go back to making 40 calls a day. And what I’ve seen. Yeah. And so, you know, I always cash is king. Right. And like people, how you get cash is you get people that are selling it. I believe your first couple of hires. Most of the time it’s important as long as you can put them in the right atmosphere. It’s important to to find somebody that’s okay with getting out. It’s selling all day. Would you agree with that? 

Greg Alexander [00:10:00] I agree 100%. I mean, listen, individual contributors in sales, it’s a grind. And it is when you get to a mid point in your career or maybe even later on in your career, going back to the grind is just culturally a very difficult thing to do. And for our community, if you think about it, you know, most of them are, you know, early in the development of their sales function in general. So hiring an individual contributor to start with and using that person to kind of be the guinea pig or the test lab, if you will, to figure out what works for you. And then once you understand that maybe that person has the ability to grow into the sales leadership job, if not, at least you know what’s needed now, because you had that junior person in there grinding all the time. So, so really good advice. Speaking of which, I wanted to get to the next question, which is. 

Carter Hopkins [00:10:46] Yeah. 

Greg Alexander [00:10:47] Our members. The stereotype of our members, if I could place it on them is this. They’re absolutely brilliant domain experts in what it is that they do. And that’s the reason why they’ve been able to build their firms, is because of their, you know, intellectual horsepower and their expertise. But they didn’t come up through sales most often. Therefore, they really don’t know what good looks like. And they have out of whack expectations. So they hire somebody and they think sales are just going to miraculously come in and they don’t understand that there needs to be a whole system in place. So can you tell us a little little bit about what expectations should be like and how to avoid this mistake? 

Carter Hopkins [00:11:32] Yeah, I would always I would even caution a lot of times what I see is people want to go hire the person that’s been doing it for 15, 20 or 20 years that says they have a Rolodex of contacts and they just move over the business and all of a sudden they’re making all this money. And where I talked to founders that have made a lot of mistakes is they’ve hired people that say that. And then they get in there and they don’t they don’t do anything. Sales is not easy. It’s not that’s why their sales reps make as much money as they make, is because it’s hard and it is a grind and there are no shortcuts to it. And, you know, I I’m going to quote as a friend, this is sales consultant Gregg Stanley. So I’m not going to take credit for it. But how he talks about it is it’s like a houseplant. You go you go buy a houseplant. And if you don’t put that houseplant in the right environment, it’s going to die. And, you know, and then what ends up happening is the plant dies and you don’t know if it was the environment or if it was a bad plant. And a lot of times you think it’s a bad plant, but really it’s a bad. It’s a bad it was a great plant, but you put it in a bad environment and it died. And so that really hit home with me because I watched that happen time after time again, where you have to create a sales environment and you have to have somebody within your organization to set up that right environment. When I say environment, accountability, KPI is a sales atmosphere where they don’t they they don’t feel like they’re flying solo when the day’s tough and they made 40 calls and they haven’t talked to one person all day long. Like you have to put them in an atmosphere to where they can thrive. And it may be like, Well, Greg, how do I do that if that’s not my background? Fortunately, I love sales. You know, when I started the company, that’s my passion and my background. But for a lot of founders, that’s not their domain or expertise. And I would just say like. I believe in. If it’s not going to be you owning that function, hire a sales consultant that helps you set up that environment correctly from the get go before you go hire that salesperson to put him in that environment overall. And then also don’t think once you hire that salesperson as the CEO or as the founder, you’re just going to be hands off and all of a sudden money’s going to start showing up. You’re going to have to be involved in training, in teaching and coaching the whole way through. 

Greg Alexander [00:14:01] Yeah, I love the house houseplant analogy. You know, when I was in the sales consulting space, I used to tell my clients, Listen, you don’t put a football helmet on Tiger Woods. Yeah, but if you hand him a golf club, you’re going to win Majors, right? So it’s matching the talent to the environment and making sure that you’re putting the talent in a position to win. And it’s very often not understood. And I think your advice of maybe renting a sales consultant that can build your sales environment first. Yeah. Then recruiting in the talent is the way to go. 

Carter Hopkins [00:14:35] Well, and I’ll say the last thing I’ll say to that, Greg, is be patient. Like if you have to play the long term game, far too often I see people playing. A short term game is like, you know, they’ll call, will fill a position, they’ll call me like, hey, never sold anything. It’s like, how long it been? It’s been a month and it’s like, man, it it you have to play the long term game with some of these you know, these people in your organization as well because it’s going to take time to figure it out, especially if you’ve never had anybody doing it before and you don’t have a playbook. Yeah. 

Greg Alexander [00:15:05] All right. Well, listen, we need to wrap this up, but I’ve got a few calls to action here for the listeners. So. So if you’re a member, keep your eyes open for the meeting. Invite. That’ll be coming to you shortly for the private Q&A session that we’ll have with Carter. You’ll be able to ask him direct questions, will go into much greater depth and more able to do in a short podcast. If you’re not a member and you want to become one, go to collect 54 Ecom and submit an application and we’ll get in contact with you. And then if you’re just someone who wants a little, little bit more, I would drive you towards our book. It’s called The Boutique How to Start Scale. And so a professional services firm written by yours truly, Greg Alexander, you can find it on Amazon. But Carter, on behalf of the membership, I appreciate you being here, making a deposit into the collective body of knowledge and I look forward to our upcoming member session. 

Carter Hopkins [00:15:59] Thank you, Greg. 

Greg Alexander [00:16:00] Okay, take care.

Episode 132 – How Psychometric Talent Assessments Should be Used by Boutique Professional Service Firms – Member Case by Ted Jackson and Dr. Julie Carswell

Pro serv firms are people driven businesses, therefore, getting the people decisions right is mission critical. As a result, many members are using assessment tools, or have in the past. However, the results have been mixed. In this session, learn from a PhD in organizational psychology how to improve the results you are getting from assessment tools.


Greg Alexander [00:00:10] Dive all in on the next chapter of your life. Welcome to the Pro Podcast, a podcast for leaders of thriving boutique professional services firms. For those that are not familiar with us, Collective 54 is the first mastermind community focused on the unique needs of boutique processor firms. My name’s Greg Alexander. I’m the founder of Collective 54, and My World Today will be your host. On in this episode, we’re going to talk about assessments. Now, why are we going to discuss assessments? Well, in professional services, it’s obvious that there are people driven businesses and therefore getting the people decisions correct is pretty important. And as a result of that, many of our members are using assessment tools or they have in the past or they’re considering them in the future. However, the results have been mixed. So my hope today is that we can help our members improve the results to getting from their assessment tools and help me with that. We have the leaders from Sigma Assessment Systems members, Ted Jackson and Dr. Julie Carswell, and they’re experts in this area and they’re going to share the wisdom with us. So as they say here in the great state of Texas, welcome. And how are you all doing today? 

Ted Jackson [00:01:36] Thanks, Greg. Doing okay? All right. 

Greg Alexander [00:01:39] Very good. Would you please. 

Dr Julie Carswell [00:01:41] Nice to be here.

Greg Alexander [00:01:42] Provide it. Provide an introduction for the. For the audience. 

Ted Jackson [00:01:47] Yeah, sure. Before I do, I just want to say I’m really inspired with what you guys have created here. 254 I’ve benefited from the podcast from the Office Hours, the expert instructions, and you guys have saved me a ton of time and money, so keep up the good work. 

Greg Alexander [00:02:02] Oh, thanks for saying that. I appreciate it. 

Ted Jackson [00:02:05] Yeah. My pleasure. My name’s Ted Jackson. I’ve been the CEO of Sigma Assessment Systems for, gosh, about 20 years now. I started off as a freelance software developer, mostly working on computerizing performance appraisal systems and then was hired by Sigma to do the same, eventually got involved with sales and business development at Sigma, was promoted to president and eventually took over ownership. And here we are one than 20 years later. 

Greg Alexander [00:02:39] And Doctor, how about yourself? 

Dr Julie Carswell [00:02:43] Yeah. I’m sorry. I’m an industrial organizational psychologist by training, which is an area of psychology that is focused on the science of human behavior in the workplace. We help organizations with selecting, developing and retaining talent, and I have specific expertise in the area of developing assessments to support organizations with those types of activities. I’ve worked with Sigma for almost as long as Ted has been the CEO of Sigma and helping to develop and optimize our assessment solutions and also using assessments as a foundation to support our other services like executive coaching and succession.

Greg Alexander [00:03:29] All right, Well, very good. Well, thank you again for being here. Let me jump into the questions. So some of our members are young growth firms and they may not even know what assessments are. So if you would humor me for a moment and just maybe give us a definition of what an assessment is. 

Dr Julie Carswell [00:03:47] Happy to. So in the context of our business assessments, refer to evaluative tools that we use to support organizations with those hiring and development decisions. These tools can take the form of either tests or assessments. And in our industry, we distinguish between those things. Tests have right and wrong answers, like measures of IQ or cognitive ability, for example, whereas assessments inquire more about preferences and people’s kind of natural tendencies. So measures of personality and career interests would be examples of assessments. 

Greg Alexander [00:04:29] Very interesting. I didn’t understand there was a difference between tests and assessments, so I’m already learning something today. All right. So. So why do leaders use assessments? 

Dr Julie Carswell [00:04:41] Yeah. So when I think about that question, I frame it up as why do organizations want to use assessments, which I think is a similar question. As I mentioned previously, organizations primarily use assessments to support hiring or promotion decisions and talent development. The use of assessments also has several applications and advantages for organizations. So there’s the efficiency factor. For instance, they can enhance the efficiency of the hiring process, particularly when dealing with positions that have large volumes of applicants. Right? So organizations with large applicant pools don’t have the resources to interview every candidate. So this can be a really helpful tool at the front end of the process. 

Greg Alexander [00:05:32] Okay. You know, our members are probably not in that category. Yes, they are quite a few people, but it’s not a large volume type situation. So in that context, like let’s say you’re, I don’t know, a 40 person consulting firm, and through growth or attrition, you might hire 8 to 10 people a year. Yeah, I would I would have to like this be leveraged in a situation like that. 

Dr Julie Carswell [00:05:56] Yeah. Okay. So in addition to that efficiency factor, which may not be as applicable for your audience, assessments can also enhance fairness in the hiring process by adding objective metrics and helping to minimize the role of, you know, those built in cognitive biases that can influence hiring decisions. Right? For instance, we tend to more positively evaluate others who are similar to us, right, in terms of gender, age or background. That’s known as the similar similarity attraction, bias. I like that. So again, yeah, similarity, attraction, bias. And there’s a number of other biases too. But again, the use of assessments to inform hiring decisions can help to minimize the impact of those biases on our decisions. 

Greg Alexander [00:06:46] Yeah, I mean, it’s a great answer. I’ve seen several of our members make that mistake. We tend to like we tend to hire in our own image because we’re projecting ourselves on them. That’s interesting. And and tools like this. Guard against that, how? 

Dr Julie Carswell [00:07:04] Yeah, but as I as I was saying. So these tools have been developed to more bring more objectivity to the assessment process. Right. So when we’re looking at developing assessments, we’re very focused on making sure that the assessment, whether it be a personality or a cognitive assessment, is accurately measuring what it’s intended to measure. Right. And doing so in a consistent manner. Okay. So making sure that you have what we call a really psychometric, rigorous assessment that’s both valid and reliable means that, you know, those scores are accurate indicators of. The underlying constructor concept you’re trying to measure in. In our case, that’s often job performance, right? So just having these more objective metrics to help support decisions rather than, Oh, I really like that person. Yeah, you know, I have good gut feel about them. So yeah, I’m going to. 

Greg Alexander [00:08:03] Yeah, I mean that. But that. 

Ted Jackson [00:08:05] Strong handshake. Yeah, right. 

Greg Alexander [00:08:07] Like a nine handicap, right. I mean that, that bias alone. That’s right. Yeah. Yeah. All right. So there’s a lot of them in the market and our members have been experimenting with a ton of them, and I have a hunch, and I can’t back this up, but I have a hunch that maybe they don’t know the differences between them or which one to pick or should they build their own. So can you help our members think through that a bit? 

Dr Julie Carswell [00:08:32] Yeah, I would say don’t build your own. You can start there. Okay. Not only because that would obviate the need for my job, but because it’s not a good idea from a, you know, an accuracy and rigor perspective. So let me just talk about context first. So different assessments are designed for different purposes. So you need to make sure that the tool you’re using is aligned with the purpose for what you’re using it. Okay. For example, an assessment intended to help with coaching and development or support were designed to support more self awareness or personal insight might not be suitable for making selection decisions. And this is great on this website. So I’m I’m comfortable saying this, but many of your listeners might be familiar with the risk assessment, and that could be helpful in terms of better understanding different styles of communication or behavior within a team. But it has not been specifically designed and developed to help inform hiring decisions. So if you’re not using a tool that’s been developed for that purpose and it’s not an effective predictor of job performance, hasn’t been validated for that purpose, that can expose you to litigation risk. And we don’t want that. Okay. 

Greg Alexander [00:09:57] So you start with what’s the purpose of the tool? And then there’s certain tools that are designed for certain purposes. 

Dr Julie Carswell [00:10:04] Right? Yeah. 

Ted Jackson [00:10:06] I would I would even maybe take it a step backwards and consider what is important for the individual, what is important for the war, How does one need to perform in order to excel in the role? And what traits, knowledge, skills and abilities are important? And then go backwards from there and choose the assessment battery based on that. 

Dr Julie Carswell [00:10:28] Steve Austin Yeah, I agree. I mean, I think if you’re, you know, looking at various tools in the market, you know, that makes, that makes perfect sense to better understand, you know, what are the critical competencies required for effectiveness in this position or what are the critical knowledge, skills, abilities and other aspects of a of individuals like personality are related to success in their role, and then use that as your lens through which you’re making your assessment purchases and decisions. 

Greg Alexander [00:11:08] Okay. And then I guess my last question would be let’s make the leap that we understand the purpose of the tool. We understand the mission critical traits and attributes of the person that would thrive in that position, who in the organization should be using them? 

Dr Julie Carswell [00:11:29] Yeah. And that’s an important question. So some assessments require certain levels of training, experience or or education before they can be purchased and administered. Those are what we refer to as qualifications in our industry just to ensure that the assessment is being used and interpreted appropriately. Right. So be sure to check the qualification levels for various tests and assessments. You know, as you’re looking through offerings from various publishers or solutions for various from various publishers and just making sure that you have an appropriate, appropriately qualified user or someone who can undertake the training that’s required to properly interpret the assessment results. 

Greg Alexander [00:12:21] Yeah, and that is really important. I our membership consists of entrepreneurs and they kind of have a ready fire aim approach. And it’s one thing to use an assessment, spend the money on it, It’s quite another thing to use it correctly and make sure that you’re trained on how to interpret their results. I think that’s great advice. All right. Well, this is all the time we have today. But I want to remind the members that are listening that we will have a private Q&A session with Ted and Dr. Julie. Look for that meeting, invite that comes up and we’ll go into much more depth than we were able to cover in a short podcast, and you’ll be able to ask your questions directly to them. So take a look at that. And then if you’re not a member, but you find this interesting and other topics like this are intriguing to you, consider joining. You can find us at Collective 54 icon fill out the contact us form and someone will get in contact with you. And then lastly, check out our book, The Boutique How to Start Scale and Sell a professional services firm. You can find it on Amazon. But Ted and Julie, I want to thank you on behalf of all of all of the members for contributing today. This is a hot topic and we look forward to your Q&A session. So thanks for being here today. 

Dr Julie Carswell [00:13:39] My pleasure. 

Ted Jackson [00:13:39] Thanks again. Good seeing you. 

Greg Alexander [00:13:41] Okay. Take care, everybody.

Episode 81 – Why, and When, a Professional Services Firm Should bring Recruiting In-House – Member Case with Don Goldstein

Your ability to recruit talent is critical to scaling a market-leading boutique. On this episode, we interview Don Goldstein, CEO of 5Q Partners and he shares how he decided to invest in an internal recruiter and its overall impact on the organization.


Greg Alexander [00:00:15] Welcome to the Boutique with Collective 54, a podcast for founders and leaders of boutique professional services firms. For those that are familiar with us, Collective 54 is the first mastermind community to help you grow, scale and exit your firm bigger and faster. My name is Greg Alexander and I’m the founder and I’ll be your host today. And on this episode we’re going to discuss recruiting and in particular how recruiting changes as you move through the three stages of a boutique process, firm grow, scale and exit in the early days. Recruiting is typically done by the founder. There’s a small number of jobs that need to be filled, and he or she can shake the tree, so to speak, and fill the spots. Then you get a little bigger, maybe into the early stages of scaling and the number of jobs to fill and the types of roles multiply. And you start using, using external recruiters. And it’s expensive, but it’s still manageable because you’re not hiring, you know, dozens or hundreds of people. Then, of course, you have a lot of success and now recruiting becomes really difficult. You’ve got to hire dozens, hundreds. In some cases, believe it or not, thousands. And using external recruiters can get very expensive. And sometimes those firms themselves aren’t built for scale. So you bring recruiting in-house and you start making it a core competency of your firm. And given that we’re in professional services where people drive in business, having a talent supply chain is mission critical. So that’s what I’m going to talk about today. And we’re very lucky. We have a great guest who’s in the middle of all this. His name is Don Goldstein, and he runs a cybersecurity firm called 5Q. Hey, Don, it’s good to see you. 

Don Goldstein [00:02:11] Great to see you. Great. Thanks for having me on. Sure. 

Greg Alexander [00:02:14] Would you please provide a proper introduction to the audience? 

Don Goldstein [00:02:18] Sure. So I’m Don Goldstein with five Q. We are a managed security and I.T. services firm nationwide actually now. And we serve primarily the commercial and corporate real estate industry, which is vast and broad. 

Greg Alexander [00:02:38] Right now, Don, we wanted you to come on today because you recently brought recruiting in-house, as I understand it. And I would love for you to explain to our members and those that are listening to this kind of how you used to do it before, how you do it now, and what what caused you to make the recent change. 

Don Goldstein [00:03:01] Sure, Greg. So. When you talk about in your book. That. Personal networks are not scalable for your clients and for your new hires. That is exactly the kind of thing we ran into. So as soon as we hit a certain point there, there really wasn’t anyone else we could turn to within our network. To go find the right people we needed that had experience in the industry and so we had to look at other means to do that. Using outside recruiters can be effective, but when you’re in scale mode and hiring literally dozens of people, that becomes extremely expensive. And it also bottlenecks your people because they’re having to do a lot of the screening and interviewing. So we felt when we hit a certain point, which was right at the end of 2021, we had to make a change in the way we recruited. We were fortunate enough to find a tremendous internal recruiter. Who became available to us and started right at the beginning of December, which was exactly at the time that we were poised to scale in early 2022. So it couldn’t have come at a better time for us. And it’s been game changing, literally. 

Greg Alexander [00:04:35] Okay. So this is a great use case for us. So at the risk of asking a question that might reveal sensitive information and if it does, feel free to decline. Give me an idea of the magnitude, like how many people are you hiring and what do you anticipate the hiring need to be? 

Don Goldstein [00:04:56] I can give you some exact numbers. 

Greg Alexander [00:04:58] Okay. Thank you. 

Don Goldstein [00:04:59] So since the beginning of December 2021, so it is now been. 

Greg Alexander [00:05:05] Five months. 

Don Goldstein [00:05:06] Almost 45 and a half months, close to six months. We have hired 40 people. Wow. With our internal recruiter. 36 are still with us. In other words, I would say of the 40 we had four miss hires. 

Greg Alexander [00:05:22] Wow. 

Don Goldstein [00:05:23] Which we identified quickly and took care of quickly as soon as we identified that we had done a mishire. And that’s going to happen. Sure. In a company like ours, especially where a lot of our people are expected to travel 80 to 90% of the time. And you don’t really know until they come on board how they deal with the travel part of that. Mm hmm. So we hired 40. We dropped our cost per hire to just around $1,000 per hire or 1.3% of salary. 

Greg Alexander [00:06:02] Oh, my goodness. 

Don Goldstein [00:06:05] Now, included in those 40 hires were six internal referrals. Mm hmm. And how we deal with internal referrals is we give a $2,000 bonus at hire, and we give another 2000 at year one. Mm hmm. And I also want to say, in addition to those 40 new hires, the 36 we have with us and we expect to keep with us. We promoted nine people this year. 

Greg Alexander [00:06:34] Wow. 

Don Goldstein [00:06:36] So part of what we’ve had to do is exactly addressing the questions in your book. We’ve had to move from generalist to specialist because of the kind of work we do. The people that got us here couldn’t necessarily get us where we needed to go, and we also needed to make sure we had a manager of our employees. We had the ability to move people into those manager positions and doing it internally. Is just great for retention. 

Greg Alexander [00:07:10] Yeah, no doubt. Yeah. I mean, employees love to see their peers getting promoted. They know what those peers did. They earned it. You know, it gives them hope that that might happen to them because you believe in internal promotions. I’ve got to come back to these numbers for a second because they’re astounding. So 36 out of 40. I mean, what does that 90%. You have a 90% success rate, which is. Yes, which is incredible. I mean, hiring is good as we can get at. It is still a little bit art, not all science. So that’s a huge success. Right. The the drop in hiring cost of $1,000 per hire. What was it when you were using external recruiters? 

Don Goldstein [00:07:49] It was anywhere between 8 to $10000. Yeah. 

Greg Alexander [00:07:53] Okay. Per hire? Yeah. So, you know, if you say 8 to 10 grand savings per hire and you hire in dozens of people, I mean that more than pays for an internal recruiter and then some. 

Don Goldstein [00:08:04] Right. 

Greg Alexander [00:08:05] I want to ask you a little bit about how you make the internal recruiter successful inside your firm, because first off, it’s hard to find one. And I’ll come back to that in a moment. When you find one in you, you give them this type of assignment. I mean, this is a busy person. How did you make the recruiter successful? 

Don Goldstein [00:08:26] So what? Our starting point was that we have a director of h.r. Who is external. Mm hmm. We do not have a dedicated director of h.r. Interest. We have a part time person who has years and years of experience, and he could not continue to deal with the hiring piece, even using external criminals. He just couldn’t he just couldn’t keep up himself. And so working with him, we were fortunate enough that he had the ability to help us identify that person. I’m not sure we would have known enough to to realize what it took to find the right person. Mm hmm. We found someone. Who frankly, you know, we just weren’t sure if she was going to be able to pull this off for us. But what she did immediately was she leveraged external services. If you want me to name them, I can. Yeah, please. One primarily. Which was. Which is indeed. Mm hmm. Which is a great place for the kinds of I.T. and cyber people we needed to find. And she just knew how to leverage that and how to qualify people. How to position. The rules we have. Another thing that I have to point out was we have two main offices, Atlanta and Dallas. We realized during COVID, especially with people who are traveling all the time and the fact that we’re able to make remote work, work for us is that we didn’t need to worry about location anymore. As a matter of fact, having diversity of geography has helped us in many ways. So now we have employees, and I believe the last count was 17 states. And so once we took the handcuffs off of our recruiter and say, find the right people wherever they are. That just opened the doors wide for us. Mm hmm. And one of the other things. That made this successful. What? She just wasn’t looking at this from a hiring perspective. Just get a body in the door. She learned our business. She worked with our team. She understood the questions she needed to ask to qualify before she turned the candidates over to our hiring managers so she wasn’t wasting their time. Yeah, she literally was doing hundreds and hundreds. I tried to get the number. She stopped counting at some point. How many people she screened? But she was able to very successfully bring over. To our hiring managers, people that would really make the next cut. Mm hmm. So the other thing that she did was she paid very close attention to the process, very close attention to not only the hiring process, but the onboarding process. So she helped us get better in all of those areas because she really dug in and figured out what it took to be successful in not only hiring, but retaining those people and having a great experience in their first week, which just meant that that allowed us the ability to leverage our internal recruiting even more. And that referral business. The other thing I would point out. And I made this clear because it’s really part of our core values. I really wanted more diversity. On our team. Mm hmm. And I’m happy to say of those 36 hires, 50, 55% represent minorities. 

Greg Alexander [00:12:28] Wow. 

Don Goldstein [00:12:30] And in I.T.. That far exceeds the norm. Yeah, 25% women and other minorities. So this has also been a game changer for us because. It’s really added to the depth of knowledge and experience and just the culture of the company and it resonates with our clients as well in this industry. Commercial real estate, as you know, primarily has not been looked at that way. Yeah. 

Greg Alexander [00:13:11] The numbers are just astounding. I had one tactical question since this is a teaching call and you’ve given us such great information. I was really surprised to hear and I think it’s a great idea that the recruiter owns the onboarding process. Is that true? 

Don Goldstein [00:13:26] The recruiter is part is a major part of the onboarding process in terms of following up with the employees, making sure that their experience when they come on board is a good one, and then asking them once they’re onboarded, how was their experience and what could we improve on? Yeah, that, that was huge for us because we just didn’t have that before. 

Greg Alexander [00:13:49] Yeah. 

Don Goldstein [00:13:49] That muscle. 

Greg Alexander [00:13:50] And very often there’s a handoff there. The recruiter brings them in and then hands them off to somebody who runs the onboarding process. And at times that handoff can be a little awkward and the employee doesn’t have a good experience. And you have some infant mortality, which obviously we want to we want to avoid. 

Don Goldstein [00:14:05] And I can give an example of that. Great, a great example. So one of the things we would do because we wanted to get our engineers on board and billable as quickly as possible. Yeah. Day one, we would send them with their other engineers out to a site to learn our process of our assessments that we do at the properties. She came back to us and said, Don’t do that anymore. Give them that first week to get their feet on the ground. Don’t. Don’t have them travel the first week. Have a have a program in place to ease them into that. She also made a great suggestion for US cyber engineers because we have some really, really good top technical talent. To make it meaningful for them, give them homework. So when we bring on a cyber engineer that first week, we give them homework. So say we’re going to take them out and have them do cyber assessments in a property. One of the homework items we give them is assess your home network from a cyber perspective and tell us what the results are. I’m giving away a little bit of the secret sauce, but I don’t mind doing that because it’s something like that that has really resonated with our new people. They love it and the fact that we’re not putting them on the road. That was only because she came back to us and said, Stop doing that. That’s not a good way to bring your people on board the first week. Right. Give them a week to breathe. 

Greg Alexander [00:15:35] The numbers are astounding across any industry, but in your space IT services cybersecurity. I mean, the job market is so hot to be able to be able to do this. The way you’re doing it is is really remarkable. I guess one last follow up tactical question, Don. What are the recruiters accountabilities? How do you measure his or her performance? 

Don Goldstein [00:15:58] So she reports on a weekly basis, because we do use the EOC model and we have hiring metrics. I’ve already named a few of them. Yeah. We measure the cost of the new hire and we do that on a rolling 12 month basis and now it’s down to 1000. Once we get to December, when we have a full year, it’s going to be far less than a thousand. The other thing we measure is retention. Mm hmm. So our retention has gone from in the thirties to right at 20%. Mm hmm. Meaning attrition. 20% turnover. Yep. As opposed to in the thirties and even higher prior to that. I’m expecting to get that down to low teens. We also measure. The time to hire. One of the things that we ran into in the beginning of this year, which was unexpected because usually first quarter for us is the slowest quarter historically. This year. It was the biggest quarter we ever had. So I had more work than I had people and we were scrambling. So what we did when we brought our recruiter in was we basically said to our hiring managers. If you think this is the right person during your interview, make a verbal offer on the spot. Hmm. That’s a little risky. Mm hmm. Right. You still have to go through all of the checks. The checks after that. But what we were seeing was we do we’d have interviews. And then by the time we get to another level of interviews, that candidate was already gone. And I didn’t want that to happen. So instead of having multiple interviews, we did more team interviews so we could get it done faster. And if that team. Felt that they had the right person right then and there. They were empowered to make the offer. 

Greg Alexander [00:18:05] Yeah. Another example of iterating your process. Right. And adhering to a process to hit these numbers and you’re measuring it with metrics. I mean, I could talk to you about this for hours. And of course, we’ll have a chance to to have you with the member Q&A session. But unfortunately, Don, we’re out of time this morning or this afternoon, I should say. But it was an incredible, literally incredible role model example of how to do this. And this is a hot and hot issue for lots of our members. So on behalf of the members and the membership, thank you for contributing this morning. 

Don Goldstein [00:18:39] Thank you, Greg. My pleasure. 

Greg Alexander [00:18:41] Okay. And for those that are interested in this topic and others like it, pick up a copy of our book, The Boutique How to Start Scale and Sell a Professional Services Firm. And if you’re interested in meeting exceptional people like Don and you’re focused on professional services, consider joining our mastermind community and you can find it at collective54.com. Thanks again, Don. Take care. 

Don Goldstein [00:19:06] Thank you.