Reunited And Setting The Stage

SPEAKER_00 0:00

Welcome to Retained Search, the podcast, where we lift the lid on what it's really like to work retained, discuss the stories we've gathered along the way, and give you all a peek behind the scenes of our amazing community and how they're getting ahead. Sean, welcome to the show.

SPEAKER_01 0:25

Happy to be here, Lou.

SPEAKER_00 0:26

Yeah, it's lovely to see you. We just figured out that we uh haven't seen each other for five years.

SPEAKER_01 0:31

Yeah. Yeah. Well well, I I always knew we hadn't seen each other for five years. You came in and you were like, oh, we we met. And then I realized I interviewed you on our podcast five years ago, which is uh which is a long, long time ago. In in in recruitment and tech years, that's probably like 50 years, right?

SPEAKER_00 0:51

It's like a generation, yeah, it totally is. Uh and we've both done a lot of growing and changing and developing since then. And uh well done. Your business sounds like it is flying and going from strength to strength. So before we go any further, for those of you that don't know who you are, who you are, Sean, um, can you introduce yourself?

Sean’s Story And Bootstrapped Growth

SPEAKER_00 1:12

Tell us who you are and a bit about what you do.

SPEAKER_01 1:15

Awesome. Uh so hey guys, I'm Sean Mullah Brooker. I am uh the founder and CEO of Recruit CRM. Uh recruit CRM is uh by by a wide margin uh the highest rated recruitment agency uh software system, ATS and CRM system on Captera G2 Software Advice and ChatGPT right now. So if you go to ChatGPT and you say, I run a five or 10 person recruiting agency in London, what ATS or CRM system should I use? We will be first.

SPEAKER_00 1:46

Uh so you can try to pay if you're watching. Uh claims to fame. I like that.

SPEAKER_01 1:52

It works out. We get we get something like uh we had our media team measure it. We get something like 300 to 350,000 worth of free ad traffic every month.

SPEAKER_03 2:02

Wow.

SPEAKER_01 2:03

Yeah, yeah. So STO is a is a blessing. Uh and and the cool thing is I started this company with my dad. Uh so we're not a traditional uh yeah, it's uh we're not a traditional venture-backed software company. We're a bootstrapped company. I started it with my dad. Uh we raised no venture capital, we took no debt, we're family-owned business, uh, and we're one of the few family-owned software companies across all industries that scaled to uh double double digit million dollars in recurring revenue, in software recurring revenue.

SPEAKER_00 2:38

Wow. That's so cool.

SPEAKER_01 2:40

I didn't know it's been awesome. It's been awesome. It's been awesome so far.

SPEAKER_00 2:43

And it's is your dad still involved? Is he half of these? Yeah, yeah.

SPEAKER_01 2:47

He's very involved. Yeah, he's very involved. Yeah, yeah, yeah. He lives uh so so uh fun fact. So the bit our business is a US corporation. Uh, our European customers are built from our Irish entity, where also like we host our servers and stuff. Uh, but I and my uh my father, we we live in uh in Dubai and we live together. So we we live we live in a you know it's we live in a nice house by the golf course, but we live together. It's basically my mom, my dad, myself, my wife, my uh one month-old baby.

SPEAKER_00 3:19

Oh,

Why Reviews Soar: Support As Strategy

SPEAKER_00 3:20

congratulations, and my and my cat.

SPEAKER_01 3:23

So it's it's a it's uh it's a pleasure.

SPEAKER_00 3:26

We're gonna be in Dubai in uh March.

SPEAKER_01 3:28

You should hit us up. I'll show you. Yep, I'm not going anywhere with a one-month-old. Uh he doesn't even have a passport.

SPEAKER_00 3:36

No, don't leave your wife, don't leave your wife with a one-month-old just at the moment. Yeah, for anybody listening as well, we're gonna be in Dubai at the end of February. So if you're over there, um give us a shout, let us know. We'd love to meet up with you too. We're gonna be there for most of the week. I think it's like the 28th of March, something like that. I might have gotten that wrong. Sorry, Claire.

SPEAKER_01 3:56

You're you're visiting at the like the tail end of the great weather, so that's that's still good. You you'll still get good weather for like save it for me, Sean.

SPEAKER_00 4:04

Save it for me, make sure it sticks down. Um my brother lives in Qatar, so I know I know it's nice at the moment, and it does get uh, you know, not so wonderful now this part, this part of the world, but it it doesn't stay nice for too long.

SPEAKER_01 4:17

So by April it starts getting a little too hot again.

SPEAKER_00 4:21

Tell me, Sean, we've had people asking about you, and that's why we wanted to invite you on. Um we want to know why. Like, why do you get five-star reviews? Why are you the highest recommended? Why are people asking us about you?

SPEAKER_01 4:36

Yeah, of course, of course. So if you go in Captera, we have something like uh, I think 430 or 440 reviews, and our average ratings of 4.9. Uh, and that's noticeably higher than any of our competitors from you know the likes of Bullhorn, which are like you know, ubiquitous and have been around for 30 years, or smaller, newer vendors. And one of the reasons is everyone builds technology and everyone's always competing on features, right? So we're trying to build a new feature, the AI comes in, everyone's trying to put in GPT into the product, into their product, including us. But what a lot of businesses don't realize is the average recruitment agency and the average user at a recruitment agency is not a hardcore tech nerd. So they need to be taught how to use the product, right? Some some of our customers are super technical and nerdy. They don't want to talk to a human, they want to explore every button and every feature, and they want to write their own automations, and and that's great. And we have the capability to do that, and we have an open API and stuff. But our average customer is an incredible recruitment entrepreneur, they're an incredible salesperson, they're great at building relationships with candidates and clients. And usually someone who's really, really extroverted and good at that stuff is is generally not good at setting up automations and sequences and or doesn't enjoy sitting in front of a computer for six hours to do it.

AI-Driven Support And Onboarding

SPEAKER_01 6:07

So we did two things. From day one, we were like, we will overinvest in customer success and customer support. So what that means is something as basic as if you send us a support message, like you you type a message and you say, How do I invite a teammate? Right? If you if you just type something in like that, our average time to respond is 40 seconds.

SPEAKER_03 6:29

Wow.

SPEAKER_01 6:30

Right? That's 24 hours of the day across time zones in English, French, Spanish, with a human or with a with a both. So 40 seconds is the human response time. The bot response time response time is five seconds because the bot just yeah. Uh so for because AI, like we didn't really have OpenAI's API like more than two years ago, right? So we've had a sub-1 minute response time since we started in 2018. Uh what's changed over time is uh today a robot is able to do actually uh participate in 70% of all support tickets we get and successfully close 54-55% of all tickets we get. So if someone gets sends us a message that says, How do I do X, a robot responds instantly if it's if it believes it can respond, and then you can either say yes, that was great, or speak to a human. If you say speak to a human, a human responds in 40 seconds. That's that's how we get to the 40 second time. Uh on top of that, we've tried to use AI for onboarding as well. So when you go inside recruit CRM, there's a AI onboarding assistant uh called root from recruit CRM. You click on it and it'll say, How can I help you? And you can say the same thing. How do I parse a resume? And it'll say, Okay, I am navigating you to parsing a resume. It'll take you to that page, it'll open up the screen, and it'll say, You could click here and drag something into this. And it's it's more interactive, right? Is it's the way a human would human would want to be uh trained and taught. On top of that, we have dedicated customer success and account managers, and onboarding and training and setup is free. So if someone, if a new agency especially, is coming to us with one or two or three users, they don't have any data to migrate from their old system, maybe just a few spreadsheets. Onboarding is completely free. We will sit with you and do multiple hours of onboarding over one, two, three, four weeks, depending on um how how much help you need for free. And and that is about the nerdy stuff. Yeah, go on.

SPEAKER_00 8:28

And so is this what it's about? Is that is it all about the customer support and helping people to use that what makes it better?

SPEAKER_01 8:39

That's that's what I would say that gives us the edge, right?

SPEAKER_00 8:41

So okay.

SPEAKER_01 8:42

So the core functionality is all there, right? We help you source records from LinkedIn, we have AI sourcing, so you can enter a phrase. I can say, find me private equity associates who have real estate experience, uh who are based in London, and we will go on the internet and show you uh 100 people that match that criteria, not on your database, but on the internet. You can then save those people, and then we have uh what's called waterfall contact enrichment. So we we partner with multiple data vendors like Contact Out, Rocket Reach, and so on. So you don't have to buy like a one-off Lucia subscription or a Zoom info subscription in the US.

SPEAKER_03 9:20

Interesting.

SPEAKER_01 9:21

And we can help you find phone numbers for them. We can then help you send LinkedIn messages and in mails from within Recruit CRM. Or you can put those people into a sequence where I can say, send Lou an email. If she doesn't respond in two days at 3 p.m., send her a LinkedIn message. If she doesn't respond, give me a task to call her. And we have a phone system in our platform where you can click on her number, call her, and the call is recorded and transcribed and logged into a KPI and searchable.

Deep Features Without The Bloat

SPEAKER_03 9:48

Okay, okay.

SPEAKER_01 9:49

And then we can set up other automation. So so, in terms of core technology, we're as deep as it gets.

SPEAKER_02 9:55

Yeah.

SPEAKER_01 9:55

But the key is when you have technology that's that robust and you just give it to somebody, it's it's like when you buy a new car. If all you if you buy, let's say a hundred thousand-pound car, right? Like a fancy luxury car, and all you know how to do on it are to change the gears and go fast and slow.

SPEAKER_00 10:14

Sounds like me with my car, I don't know how to work it properly.

SPEAKER_01 10:18

That's really sad, right?

SPEAKER_00 10:20

It is a bit sad, yeah.

SPEAKER_01 10:22

So we we believe the customer success has been our edge in our average user being you able to utilize a greater percentage of what we deliver, which is why we get a 4.9 versus everyone else gets a 4.1, 4.2, 4.3 with fewer reviews.

SPEAKER_00 10:39

What do you make? Um, I have interviewed the um owner of Atlas, one of the new uh CRMs recently, and he was telling me about his magic search function. And because he's built it post-AI, this is totally off topic, by the way. So if you don't want to ask this question, that's fine. I totally understand.

SPEAKER_03 11:00

Go for it.

SPEAKER_00 11:01

Um he was talking about building a piece of software post-AI is very different from building a piece of software and updating a piece of software.

SPEAKER_01 11:11

Um that's that that's that's simply not true. I'll give you an example, right?

SPEAKER_03 11:15

Interesting.

SPEAKER_01 11:15

So when you go into building software, uh over 60% of all code that we deploy, we deploy code to production to our application every day. So we have where we have 25 or 30 updates a month to recruit CRM. And 60% to 65% of all code written today is written by AI. It's not a human writing it, we use cursor. Uh and you can use, you know, people can use GitHub Copilot, and there's other tools you can use. So we use AI to write code. Uh, on top of that, every software vendor, especially an application, people at the application, we're at the application layer, Atlas is at the application layer, bullhorn is at the application layer. Everyone at the application layer is not building any foundational models or any AI. They're just buying or subscribing to Grok, OpenAI, and Topic. Like you're using Cloud basically. You're you're using one of the models from these multi-hundred billion dollar, trillion dollar companies.

SPEAKER_02 12:17

Yeah.

SPEAKER_01 12:18

And you're basically just building a layer on top of that model. We do the exact same thing.

SPEAKER_00 12:24

So what sorry, I'm interrupting you. Carry on.

SPEAKER_01 12:27

Yeah, yeah, yeah. So, for example, uh, we're we're currently building, which uh we have something that's on beta already right now, which is an AI co-pilot, where you can basically click on a button and you can talk to your database. Okay. With voice or text. You can say, Can you show me like any candidates that we sent to interview for this type of job in the last three months?

SPEAKER_00 12:52

Nice, I like that. Whisperflow uh is is like taking off with our community. Every other post I see at the moment has got Whisperflow um mentioned in it. And talk is it's just changing everything, isn't it? I love it.

SPEAKER_01 13:08

In six months, most cutting-edge ATS systems, us included, and probably your competitors too, because everyone has the same toolkit, right?

Demystifying “Post-AI” Product Claims

SPEAKER_01 13:16

It's none of this is proprietary. We're just building on top of what what's available by uh what OpenAI and Google and Grock are making available. You'll be able to perform actions as well. You'll be able to just say, uh, okay, these are great. These are 50 candidates that got to interview three but didn't get an offer for this type of job. Uh, can you put them into this sequence?

SPEAKER_00 13:39

Yeah, yeah.

SPEAKER_01 13:40

Can they get put into that sequence?

SPEAKER_00 13:42

Do you have a note taker integrated or do you uh integrate the note takers?

SPEAKER_01 13:46

We integrate with a bunch of note takers. So we have uh we work with a company called Carve in the Netherlands that's a full-on recruitment note taker. We work with we have a bunch of customers that use fire files, or we, for example, we internally use Fathom and a lot of our customers use Fathom.

SPEAKER_00 14:01

We use Fathom.

SPEAKER_01 14:02

Uh and uh because all of these companies have robust APIs, we have connectors with them.

SPEAKER_00 14:07

Right.

SPEAKER_01 14:07

Or fire files. So you could just plug in any note taker you use. Great, that's so important. Summaries get stored as notes, which are again searchable. You can report on them, you can do analytics on them.

SPEAKER_00 14:18

So on the so could you search and it would search the notes?

SPEAKER_01 14:22

Yeah, yeah, yeah, yeah.

SPEAKER_00 14:24

So you can say, find me all the people I've spoken to that have mentioned this keyword in the last six months.

SPEAKER_01 14:30

Yes. So you can do that on phone calls, you can do that on so of course, if something is recorded on, let's say, of a fire files or a fat, yeah, you can do that for sure because we store the summary.

SPEAKER_03 14:41

Yeah.

SPEAKER_01 14:42

Uh, but even if you use your phone, like your cell phone to call somebody and you're using, let's say, our mobile app to make the call. So we're recording and transcribing the call. Yeah, that is searchable as well. Any notes you physically write are searchable. Um, and anything in the resume or any other uh part of the profiles also.

SPEAKER_00 14:59

So that's magic search, essentially. That's the magic search that Atlas is talking about.

SPEAKER_01 15:04

For the lack of a better word, is the same shit. You just take he's calling it different things. Yeah, you just you just take all of that data and you pop it, uh, you pop an LLM on top of it.

SPEAKER_03 15:15

Wow.

SPEAKER_01 15:16

Because what is magic what is magic search, right? Because a lot of people love using fancy words or fun words like host AI architecture. Okay. Uh can you open the hood and explain to me exactly what it does? Uh oh, we use chat GPT, we use OpenAI, chat GPT, and we put it on a database of CVs and notes and stuff, and then we let you ask questions, which then searches through that data and gives you results. It's the same thing. It's the same thing.

SPEAKER_00 15:46

Okay. I got I got all carried away because I was like, oh my god, that's so cool. But then actually it's not revelation, is it? Um tell me about a bit deeper about the um the problems that you have been solving over time. Um what sort of gaps have you noticed in um recruitment in the in the recruitment world? And how have you gone about solving those?

SPEAKER_01 16:25

Yeah, so again, uh just to give folks a little bit of context, because I understand most people watching are either retained search firms or recruiting businesses that are considering a retained model or trying to transition, yeah, uh, which is your audience.

Voice, Actions, And Integrated Note Takers

SPEAKER_01 16:40

Now, most customers that work with us range from one or two person teams all the way to 200 person teams, right? And it's important to understand no software system can turn a zero business into a one, like you a software product cannot help you go zero to one, right? If it was that easy to spend 100 or 200 pounds a month and like get a business build, it would everyone would do it. Yeah, but what a software business, a software product can do is help you go from one to ten with less pain, uh, for the lack of a better word. Because what happens with most recruitment entrepreneurs, most people who become recruitment entrepreneurs are generally uh folks that were at a recruitment agency, very successful, build a lot of dollars or pounds, and said, I billed three, four, five hundred thousand dollars or pounds last year, but I only took home 120 or like a you know, whatever, a third third of that. And I believe I deserve to take more, which is a reasonable, uh reasonable thing. What suddenly happens is now this person, when they start doing everything by themselves, are not just doing consulting or search, they're doing a lot of, for the lack of a better word, administrative low-value prep. They're now formatting CVs, generating executive search reports if you're doing, you know, if you're if you're doing search and formatting PDFs and making sure the margin is right, they're doing accounting, they're going and physically generating an invoice or finding an accountant to help them do it, they're trying to set up a QuickBooks, like they're doing they're doing all of this, they're doing sourcing. Maybe they had a research assistant at their search firm, right? If if if it was an executive search firm. And what that suddenly does is even if you're able to get all of the clients who love working with you to give you roles and jobs, you cannot work the same number of hours and build anywhere near what you build before. You either have to work twice as much or you end up billing less, but you just tell yourself, hey, I build half as much as I would when I was working at a firm, but like I'm getting to keep all of it minus my cost. So as a software product, our the first thing we want to solve is how can we help you scale? We can help you scale by reducing the Are you enjoying this so far?

SPEAKER_00 19:00

Don't miss a single episode. Hit the subscribe button right now so you can be part of the conversation that's shaping the future of recruitment. So we dive really deep into the strategies, the stories, and the truth about retained learning. So if you want to hear more about it, or you know someone else that needs to hear this, then share it with them. Right, let's get back to the good stuff.

SPEAKER_01 19:28

Administrative glut. What does that mean? One, we can make one, we can make data entry super easy for you, right? So if you find somebody on LinkedIn or Shing in Germany, you press a button, we source them, save them, find their emails, find their phone numbers. Uh we give you a sourcing tool. So you go into your system and you

Executive Search Needs: Off-Limits And Reports

SPEAKER_01 19:45

just say, find me people like this, and we bring those people into you. Then we set up day to day business operation work, operations workflows. So, for example, if I go in and I'm running five or I have a three person company, we're working on eight searches at once. Which is a good position to be in. And someone on my team has presented six candidates to a client two days ago. I can set up automations that say if candidate has been moved to stage presented, and if nothing happens for 24 hours or 48 hours, meaning the client on the client portal hasn't moved the candidate to another stage or the consultant hasn't moved them to not interested client does not want to talk to them or interview scheduled or something else, you can automatically go and create a task in their calendar in their day-to-day daily task list of follow-up with that client or candidate. If nothing happens for another 24 hours, we can create a task in your calendar to say, hey, someone on your team is flagging, and like you might you might just mess up this one search with a very important customer.

SPEAKER_00 20:50

Nice. I like that there's a client access to it too. Um, I'm interested to know how much of your customer base is retained versus 25%. Do you know? About 25%.

SPEAKER_01 21:03

About a quarter. About a quarter of our customers have some retained business.

SPEAKER_00 21:09

Yeah. Yeah. So I do find that most um search firms have executive or retained search specific type software like a clockwork or an Invenius or a We need a lot of people over from both Invenius and Clockwork, including this money.

SPEAKER_01 21:31

Yeah.

SPEAKER_00 21:32

Interesting. Why? Tell me. Can you know much about why? Yeah, yeah, yeah.

SPEAKER_01 21:36

So for both of those, it's very simple, right? So uh now some people like this and some people don't like this, by the way. In an Invenus, for example, you have people, and a person can be a candidate or a client, but it's a person.

SPEAKER_02 21:53

Yeah.

SPEAKER_01 21:53

And that makes a lot that makes some activities a little more complicated or challenging. In recruit CRM, a person can be a candidate, they can be a contact, or they can be both, but those are two separate profiles linked together where you can flip. And and flipping is useful because when you go to their candidate profile, you have their personal email, personal phone number. When you go to their work profile, you have their work email, work for number number, work conversations where they've given you searches, or they're a hiring manager in one of your searches, versus so you're not accidentally mixing it up and have their company email, have an email that's okay. Your interviews

Integrations, APIs, And Switching From Legacy

SPEAKER_01 22:28

are and that's dangerous, and that does happen, by the way. Um, we have very strong off-limits managers, which means let's say you work with uh Coca-Cola. Uh, I'm just throwing a brand. Yeah, you can say Coca-Cola is off-limits for business development and sourcing, or or one or the other, or both. Now, what happens is if anyone in your company ever goes even on LinkedIn and finds someone that works at Coca-Cola, our extension tells you, hey, this person's not in our database, but they work at a client. Are you sure you want to proceed?

SPEAKER_02 23:01

Right.

SPEAKER_01 23:02

And that prevents you from soliciting.

SPEAKER_02 23:04

Oh, that's clever.

SPEAKER_01 23:05

And if you're a larger firm, that's a very common problem that you get a call from an angry client, a vice president somewhere that says, Hey, I just gave you a search. Why why is XYZ person on your team, some on your team, yeah, calling people in my company and asking them if they want a job? It just ruins relationships, right?

SPEAKER_00 23:22

Very nice.

SPEAKER_01 23:24

So and we generate executive search reports as well. So you can you can set up templates and we can we can draft five, eight, 10, 20 page brochures in landscape or portrait for you with the candidates' pictures, details based on templates you've set up of where what field needs to go. You can edit it on screen and you can say generate. So the the process to generate a search report goes from a couple hours to like 10 minutes.

SPEAKER_00 23:48

Yeah, nice. Um, a bit like a clockwork.

SPEAKER_01 23:52

Exactly. That's one of the things they do.

SPEAKER_00 23:57

Yeah, well, it is a little bit dented. I mean, I haven't seen it probably for maybe 12 months, but yeah, when I look at it, it's still the same as pretty it was 10 years ago.

SPEAKER_01 24:06

Is it so yeah, so so that nothing wrong with it. It's just you know, it's it's it's it's a different different situation, and uh we tend to have far more integrations. So, for example, if you want to integrate with a QuickBooks or zero, yeah.

SPEAKER_00 24:24

We really struggled with the integrations with some of those clockwork was one of them, and then not they don't have an integration marketplace, yeah.

SPEAKER_01 24:32

So some of them don't even have an API, like some of them don't even have an open API. They just say use it, and how do I get data out? Oh, you can export it. That like, and then what you no, I know that's insane, right? Uh it in today's day and age, it's insane.

SPEAKER_00 24:47

Yeah, I agree. Um tell me, what are you seeing in the market

Market Pulse: US, UK, DACH Trends

SPEAKER_00 24:54

right now? You're close, you're obviously close to your customer base, you're close to your business show, and which I have a huge amount of respect for. Um I I mean, I'd say that I am too, but your business is much bigger than mine. So it's much harder to stay close to it, you know, when it's when it's grown uh so quickly as yours has. What are you seeing in the market? I mean, in the context of our audience as well, especially, um, tell tell us about that.

SPEAKER_01 25:22

It really varies by market, right? So, for example, right, um a lot of our customers in the US doing tech recruiting are doing great. Uh, because a lot of AI companies have raised ludicrous amounts of money, right? 10, 20, 50, 80, 100 million dollars with no revenue or very little revenue. And now that capital is basically going to, I need to build out an executive team who will then build out their team, and everyone's competing for talent. And that's, you know, that's the that's that's the golden opportunity for a search firm or even a perm contingent perm recruiting firm to come in and say, I will help you find your VP of engineering and your first 10 developers. Because the founder is a 22-year-old out of college that built a cool tool uh and raised $20 million, and now they need a team to justify the race. So US tech recruiting is doing incredibly well. Um we've seen not just some, quite a few of our German customers struggle on perm recruiting across industries, across tech, uh, IT, finance. Uh perm recruiting has taken a big hit. Contract staffing is still relatively stable because of the nature of uh uh contract staffing, but people people have not been adding perm headcount in in continental Europe as aggressively as they were, especially in Germany. Uh because the doc market is fairly large for us, it's about uh 15 to 20 percent of our revenue. So we we you know we we see see what's going on there. Uh the UK has actually started recovering, we feel like, uh over the last few months. So we've had more uh engagement. Some UK firms are actually starting to add back headcount, uh which was not true because in 23 and 24, most firms were shrinking in headcount.

SPEAKER_03 27:14

Absolutely.

SPEAKER_01 27:15

And we can tell because VC numbers on, you know, this team is still using recruit CRM every day, and everything is great, but they don't have 18 users anymore, they have 12.

SPEAKER_02 27:24

Yeah.

SPEAKER_01 27:25

You know, they've they've they've dropped users over over time. Uh and and that's recruitment just as an industry is cyclical, right? Because as interest rates go up or down and capital is either available or not available, companies expand or hold. And when they expand, it there's a lot of hiring, and thus capital flows into recruiting agencies' pockets. And when people are holding or cutting, there's literally zero revenue for months.

SPEAKER_00 27:54

Yeah, yeah. Do you see, I mean, I I see that too and um agree completely. Do you think that

Efficiency, Automation, And Role Polarization

SPEAKER_00 28:03

in part some of the reduction is due to increased efficiencies using um better technology?

SPEAKER_01 28:12

Depends depends for what kind of roles, right? So for example, in all honesty, we ourselves have now have an AI bot doing and closing 55% of support messages within five, 10 seconds, right? Yeah. Now, what has happened to us is we've also like since COVID, our business has grown about 30 times in terms of revenue, uh, which also means we've still increased headcount, right? Like in all functions, including including in support. But let's say we were already a company with 200 million uh a year in revenue, and we were growing 10% a year, and suddenly we had 50% efficiency gains, you know, we we would we probably not need as many people in like support anymore. Uh but in terms of like most high higher end jobs, for the lack of a better word, the kind of jobs that an executive search firm recruits for that market's growing.

SPEAKER_02 29:15

I agree.

SPEAKER_01 29:16

You know, it's unfortunately the fact of the world is the world is becoming more slightly more dystopian every few years, right? The the the wealth disparity continues to increase. And what that also means is I know it sucks that you know, CEOs as a multiple of the average person at their company get paid significantly more today than they did 30 years ago. But the fact is in 20 more years the gap is only going to widen based on how things are going right now, right? Like just you know, let's call an apple an apple, right? Like it's that is the current situation. That also means that the average compensation levels for executive hires, your directors, your VPs, your SVPs, those are continuing to go up because these people are now able to make strategic decisions that cause a greater revenue impact or profitability impact without needing a lot of people on their teams.

SPEAKER_03 30:10

Yeah, yeah.

SPEAKER_01 30:11

So an excellent marketer doesn't need 20 people on their team anymore, right? And an excellent engineer, like your 10x engineer, now can do significantly more than they could do five years ago. Uh which means now they're worth more.

SPEAKER_00 30:27

Yeah, yeah, yeah. They can deliver more, yeah.

SPEAKER_01 30:30

Yeah, and and so you which is why a meta goes out and says we're gonna pay a hundred million dollars an engineer or billion an engineer, like in some cases, ridiculous amounts of money, right? To go in and say, here's a hundred million dollar signing bonus, come join us tomorrow. Uh now, if you're a search firm and you're working at that level and you're making a percentage of total comp, I think you're in a good spot.

SPEAKER_00 30:55

Oh, yeah. We we see in it like it's ridiculous the the fees that that we see.

SPEAKER_01 31:01

Um, seasonal thing, coming, I don't know what name, but um fresh solid graduates are struggling uh because

Offshore Leverage And Rocket-Ship Agencies

SPEAKER_01 31:10

yes, yeah, because the unemployment rate there is very high. But when you think of it from the perspective of the recruitment industry, most recruitment agencies or almost none make money by placing fresh graduates anyway, or placing people into back office uh entry-level jobs, like that's not a very large market, right?

SPEAKER_00 31:31

Well, not anymore, it's not.

SPEAKER_01 31:32

Yeah, not anymore.

SPEAKER_00 31:34

I have been one. I mean, I remember my first my first job in recruitment was placing like secretarial and admin staff, and people used to pay a fee for that. They I mean almost non-existent in that market now.

SPEAKER_01 31:47

The problem today is the top end of the market is getting paid more and more and more. Absolutely agree. And because they have more leverage, to be fine. It's not just because the system is bad or whatever, it's just they're able to do more with fewer resources. So now they get paid more because they've they've controlled more impact. Um, and the the entry level, let's say, even at recruitment businesses that that that we talk to and we look at, a lot of the entry level work is either partially automated or automated plus offshore.

SPEAKER_03 32:19

Right?

SPEAKER_01 32:19

You have uh you could be in the UK and you have an assistant in India, in South Africa, in the Philippines, in Latin America. It's it's one of our most, in fact, uh, this is a fun trend we have seen. Over the last 24 months, recruit CRM has more than five recruitment businesses start on recruit CRM that were sub-five employees uh two two or three years ago and are close to 100 employees or more now.

SPEAKER_00 32:49

Bloody hell.

SPEAKER_01 32:50

Recruitment businesses are normally don't grow that fast.

SPEAKER_00 32:53

No, yeah, they don't.

SPEAKER_01 32:54

But these are business and with no capital. These aren't companies that have raised capital, these are recruiting businesses started by someone on a laptop, and and and one of our customers actually sold uh and it was pretty popular on social media. So uh one of our customers is a company called Sumware.com. And Sumware.com was acquired, I think, two or three years after founding last April for $52 million.

SPEAKER_03 33:16

Wow.

SPEAKER_01 33:17

Because it produced something like, and they shared these numbers publicly, they they were producing something like seven million dollars in Ibiddao on 12 or like or sorry, on 14 million of revenue, like 50% profit margins. Nice because they were basically finding people in Latin America, in the Philippines, and South Africa to be virtual assistants, accountants, bookkeepers, like a lot of the support staff, and they're finding you people, and and this is just one name. We have other businesses as well, right? Like that have been doing similar, uh uh similar things, but it's it's it's been it's been explosive growth at that segment. So at those segments of jobs have largely in the Western world, right? North America, Western Europe, have have either been partially automated, because you can't really automate all of them, but automated plus offshore. And like if it and and for mass market roles, if you're not doing that, you're not competitive anymore, unfortunately. So if you run an agency and you have 10 assistants at your agency,

Moving Up The Value Chain With Retainers

SPEAKER_01 34:18

like you don't have that anymore, like you did in the 1980s, where there's 10 partners with 10 assistants, and each of the assistants is making like 40,000 pounds a year, it's just not a it's just not a thing. Uh and that's a function of the market. You you can't afford to have have that.

SPEAKER_00 34:34

So interesting. Uh, and yeah, I totally agree, everybody, that I um, well, I I suppose by the nature of what we do, it's easy to see that side because the people that come to us are the people that want to go, you know, that want to get up the value chain to where all the money is being made, right? And they don't know how to do it and they don't know what a retained search should really look like, or what an executive what's the difference between the executive and how does that done them?

SPEAKER_01 35:02

There are there are recruiting businesses that only pick up mandates where they get paid over $100,000 or pounds per day.

SPEAKER_00 35:13

Yeah, absolutely, there are. And and so the the average contingent recruiter, that's like what the hell? Like that's amazing. That's a whole exactly, right? So um, yeah, there's a there's a gap there. There's a knowledge, experience, and capability, uh all sorts of of um elements to that gap. And that's obviously what what we do. So we tend to see the people that want to go up, want to go that way. Um, by very nature, I I sense that there's this move away from that, you know, that stuff that's being eaten up by automation and offshoring. And I've been we've been feeling that for a while. And I think we shared um some stats recently, the Google search data for did you see that post that we did? Probably didn't, for retained search. So the the the search term retained search, the the popularity of it's been pretty much the same since we you and I last met actually in like 2020, 20, 2021. And then six months ago, it just climbed and climbed and climbed, and it's quadrupled basically over the last six months. The search terms might have different research. Yeah, yeah. And people want to get up the value chain, they want higher value work, they need to know how to how to do the more complex stuff.

SPEAKER_01 36:29

And and that's the way of the world, right? So because we're in this this global integrated economy, the the advantage is you can get a lot of things cheaply. You can get cheap products, cheaper labor for the lack of a better word, because you have you you you have access to global global talent pools, right? Of of educated, productive people across the world. But but what a lot of people miss, right, is the fact that you need to figure out how you can leverage this to create higher value services. Because if you uh one can't come ideally, instead of complaining about, oh shit, like this uh you know, call center job is gone. How do you how do you get how do you go from that to being let's say a search consultant, like thinking people at $300,000? And how do you do the higher value? How do you how do you start doing the higher value work? Because net net, the GDP of most countries, including the UK, is still increasing. Like net net in real terms, the GDP today is greater than it was 20 years ago. The thing is the distribution is very different, right? The top 1%, 2%, 3% have gained a lot more of the percentage of GDP. Uh and how how can you go up the value chain? That's the question everyone needs to be asking.

SPEAKER_00 37:50

Exactly. Exactly, exactly.

SPEAKER_01 37:52

I couldn't agree more. None of us, as private sector participants, right? Me building a software company, you building a consulting business, both our shared customers building executive search firms and recruiting businesses. We can't control government policy. You can you can go vote and stuff, sure, but like in your respective countries. But I

Remote Teams, Time Zones, And Scale

SPEAKER_01 38:12

live in Dubai, so there's no really voting here either. But but but there's that you can't really go and change policy or go and sure. You most entrepreneurs are probably not the type to go and sit and do protests and stuff anyway. So if this is a system you're in, how do you how do you use the system to succeed in a fair way doing a good job? Right. And and we can either do that or we can complain. But complain's it's fine, but it's not gonna help. Right? It's it's not gonna help, and no one's gonna save us, right? You're you're you're the only person who has to pick yourself up by the bootstraps.

SPEAKER_00 38:45

Yeah, I and I read recently actually, was one of our team um in South Africa actually that shared it. Kirsty shared uh a little video, and and in essence, the clip was saying, it's a very, very old clip. It's from like the 60s, and he's standing in front of like an old-fashioned blackboard and he's writing on this on this chalkboard. And he basically says, Don't talk about your problems. You talk about your problems, you give it energy, you give it fuel, you give it time, you make them bigger. You basically make your problem, you make your problems bigger just by talking about them.

SPEAKER_01 39:13

Yeah, speaking of leverage, Luke, what percentage of your team is outside of the UK?

SPEAKER_00 39:18

What percentage of what? Our customers?

SPEAKER_01 39:21

No, your team, your personal team.

SPEAKER_00 39:22

Our team. Um of the sort of wider team, of which there's about, I don't know, probably I'd say 20 of us all together, I would probably say about a quarter of outside of the UK, maybe more.

SPEAKER_01 39:41

And how does that how does that impact your ability to serve global customers?

SPEAKER_00 39:46

Well, that's exactly why it's it's spread, because our customers are spread you know across the world. So different kinds of partners, joint ventures, ambassadors, coaches in Australia, partners, ambassadors. Coaches in North America, Canada, and of course in the UK, and then our a lot of our support network, as you said, for efficiency, knowledge base, experience are in um South Africa.

SPEAKER_01 40:18

And that gives you a little bit of operating operating leverage in your one, it gives you scale, so you have global talent so you can cover more time zones.

SPEAKER_03 40:25

Yeah.

SPEAKER_01 40:25

And you're able to do that because you're remote. And today people are okay working online, and it's easy to pay people online and move money around the world. And you get some cost efficiencies by having some knowledge centers in South Africa and so on and so forth. Now, this allows you to build a stronger, greater business in the UK because you're doing UK revenue and filing taxes in the UK and so on and so forth and scale. But what a lot of people, what a lot of people don't understand is they they're they're they're still not willing to adopt that global structure. Right? You're still stuck with like, oh, I need an office.

SPEAKER_00 41:00

I need an office. Yeah, and I need people in the office. Yeah.

SPEAKER_01 41:02

And I need to look at them every day. And if they're not, if I'm not seeing them on the phone every day, they're not doing work. And and and and sure, it's fine, you've been doing it for 20 or 30 years, but it's very difficult to get disproportional returns.

SPEAKER_00 41:14

Yeah, absolutely.

SPEAKER_01 41:16

If you're not figuring out some, for the lack of a better word, way to hack the system, right? Or or leverage the system.

SPEAKER_00 41:23

Yeah, absolutely agree. We didn't even think about it, you know. I think because it was forced on us, you know, we set the business

Japan’s High-Fee Search Market

SPEAKER_00 41:30

up in COVID and we didn't have a choice. There was no way that we could have been so there was never that constraint of we need to look for people that can get into the office. There was never when we when we were doing the search for people to help complement our attributes, it was always like uh the market is wide open. This person can be based anywhere, and actually, ideally, it'd be great if they're in this time zone because then they can be awake and online and answering questions when we're not.

SPEAKER_01 41:54

For us, we had we had people but when I last spoke to you, and we were one thirtieth the size we were today, right? And we were uh in terms of revenue and one.

SPEAKER_00 42:03

I think we probably were as well, actually. It was probably about this, probably even maybe less. Yeah.

SPEAKER_01 42:08

And we were one twelfth the size or one fifteen this, like we're 12 people, right? Like now we've like one 165. And uh it's we were in an office pre-COVID, uh, and we were all like there we were 15 of us. I was in India back then. Um my family only moved to Dubai like three years ago, and and we were limited, we were working nights and so on to serve customers here and there. But the moment we went remote, we said, hey, we don't have to hire just people who we can see in the office every day, we can hire people everywhere. So now we have people in five continents.

SPEAKER_03 42:41

Amazing.

SPEAKER_01 42:42

Awesome, right? Because now you have your people working their hours across all time zones. So, like, you know, you're you have a customer working central time in the US, there's someone who works central time uh in the same time zone, yeah, who lives in the same time zone. You you have someone in in in Europe, you have someone who's in the same time zone, you have someone in Japan. Uh, we actually don't have anyone in the Japanese time zone, to be honest.

SPEAKER_00 43:04

But like oh, I love the Japanese market. We are loving it. We're going, we're going actually next year. We're gonna spend some time over there because our clients um love us and we love them.

SPEAKER_01 43:15

I I've heard of fees going all the way up to 50% of first-year total costs.

SPEAKER_00 43:20

Absolutely. I see them. I I don't even hear of them, I see them. I work with Japanese clients and I see the yeah, it's amazing. Standards 40, sometimes like 44%, easy. Um, I don't think I've seen a 50% yet, but always see for 44%.

SPEAKER_01 43:34

So basically, if you if you if you help find a person that's that's at a million dollar salary, yeah, right, or what is it, 130 million yen salary. Yeah, you're going you're going to take home 400,000 US dollars on one placement. That's insane.

SPEAKER_00 43:52

Yeah, yeah. We see them in the community. Like I've seen them. We must be on about the fourth or fifth of those those numbers. That's exactly the kind of numbers that we see. It's great. It's fucking great. I love it.

SPEAKER_01 44:04

It's it's also a very difficult market, it's a really difficult market.

SPEAKER_00 44:09

It's very unique. It doesn't suit everybody. Like the you know, the people that I see doing really, really well have got a very unique um personality type. And in fact, we behavioral profile everybody in the Mashri group, so we know what what that looks like. Um, but yeah, it's a very, very unique personality uh type. It's very interesting. I'd like to talk to you more about it when we see each other in Dubai.

Where To Find Sean And Closing Notes

SPEAKER_01 44:32

Sounds like a plan.

SPEAKER_00 44:34

I have absolutely loved talking to you today, Sean. Um tell our audience if people want to get hold of you or want to talk to you directly, where's the best place for them to contact you? Do you want them to talk to you?

SPEAKER_01 44:44

Yeah, yeah, please, please. I am always happy to talk to people in the recruiting business, irrespective of whether you're a customer or whether you'll ever be a customer or not, because it's just exciting to learn more about how different people are running their recruiting businesses. Uh, you guys can find me on LinkedIn. Just type in Sean, S-E-A-N Space Molappooker, M-A-L-L-A-P-U-R-K-A-R. It's a mouthful, but just type that in recruit C R M. Or just type in recruit space C R M and I I should show up in the company anyway.

SPEAKER_00 45:13

I love it. I love it. Thank you so much for spending time with us today, Sean. It's been an absolute pleasure.

SPEAKER_01 45:19

Yep, pleasure's been mine.

SPEAKER_00 45:20

Well, that's another episode of Retrain Search, the podcast in the bag. Thanks for listening to our wild tales, LinkedIn controversies, and our top tips on how to sell and deliver retained search. Get involved in our next episode. Send in your questions and share your experiences with us by emailing podcast at retrainsearch.com. And don't be shy. Connect with us on LinkedIn and come and say hi. We don't bite, unless you're a track firm, that is. We want to say a special thank you to our retrained members for sharing what's working for them right now and innovating new ways to grow and evolve. It's an incredible community. If you're wondering what exactly we mean when we mention our communities, well, we have two separate programs. Our Search Foundation's program is for recruiters who want to learn how to sell and deliver retained search solutions consistently. And we have our Search Mastery program. That's for business leaders or owners already at 50% retained or more and looking to scale and grow and structure their search firm. We cap memberships to these programs to protect the integrity of the community. If you want access, just talk to us. Okay, thanks for listening. We'll be back very soon with another episode of Retrain Search, the podcast.