Cracking the U.S. Market: Expert Insights for Recruiters with Sophie Reed

Welcome back to another episode of the Recruitment Mentals Podcast. This week I'm joined by Sophie Reid, who is the founder of a business called JL Pro. Sophie has dedicated her entire recruitment career to moving and working with US-based recruiters in progressing their career. So in this conversation, expect to learn everything about how to succeed in the US when it comes to hiring experienced talent in the US, working in the UK market versus the US market. How can you get better at hiring US nationals? What do they care more about compared to UK recruiters? Setting up in the US, the cost versus the opportunity, what states in the US are real hotspots for recruitment firms and recruitment businesses. And so, so much more. This really is a US masterclass, which I managed to record whilst in my recent trip to Austin. Sophie has a great energy, a great passion, and I absolutely love what she's doing, and she's so well positioned to share so many insights on something that a lot of people have top of mind. And that is taking their career or taking their business to the US. Enjoy this week's episode. Sophie, welcome to the podcast. Thanks for having me. It's good to be here. I'm interested in this because I think I'm in Austin, I'm interviewing people that have moved to Austin or have been in the American market for however long. And you've been specifically focused on the American market, specifically placing and moving around recruiters in the American market for nearly six years. So you are very well positioned to talk about something that as we're saying today has become more and more on the agenda for UK recruitment businesses. In terms of diversifying where they do recruitment. Obviously there's so many things that you see online around the US market, bigger fees, less competition. But today in this conversation, hopefully everyone listening, they're going to be able to walk away with some real tangibles around how can you increase the chances of making it a success in the US. Just because the opportunity is greater doesn't mean that it's easier to succeed. And you've specifically been doing this for six years. I think it's really cool to be sitting down with you and really diving into this. So just to give everyone a bit more context. So you've always been in right to right for the first three years of that. It was at a business called Tempting Talent. Always been US-focused. But a lot of that there you did it from London. So a lot of late hours, grass. Yes, a lot. And then you launched your own recruitment business, which is going to be three years old in February next year, as you've just said. Yes. Crimin if I'm wrong here, but you've been in Austin two years. Yes, two years. It's flown by. Two years. Yes. So we're going to dive into how can people listen to this or recruitment founders or even recruiters listen to this that like this propositional coming to the US. What does it actually look like? And we can just get some real hard truths on that versus maybe what people think from what they're on LinkedIn and stuff. If I'm a friend, I work in recruitment. I've always been in the UK. I'm sort of consuming content on LinkedIn. I say about the opportunities in the US. Like how would you describe the opportunity for a recruiter in the US to like a friend in the public? Like how would you just curious to hear how you would talk about it? How would you describe it? Yeah, for sure. So I think firstly there's the obvious that the market size and opportunity is so much bigger in the US. So there's far more that you can go out and attack. But I think from a recruitment perspective specifically it's far less competitive as well than the UK market. So there's so much more opportunity in that respect. Plus higher fee sizes as well. So looking from the UK, everyone sees it all is shining exciting and wants to tap into the US market. But then it's just about, okay, how do we actually do this and can we do it effectively from the UK? Or does it make sense to get out here and actually get out to the States? So how do you feel about this then? Often times the way that I've described it to people is it's just as hard but the reward you get is larger. Yeah. Potentially. Not all the time. But if you're listening to this and you've done a certain market, you're a specialist in your area, it's just as hard. It's hard. However, in the US, if you did the same thing, in terms of what you would get in return for that hard work, could potentially be 2X, 3X, 5X in terms of your average deal size. Absolutely. It's just as hard. Absolutely. It's just as hard. I mean, you're still working with people day in day out and helping find them a job, which always can present its challenges. So that's always going to be there. But the upsides far stronger in my opinion. Hence why there's now a lot of breaks that are wanting to get out here and have a piece of it for themselves. You did this for a good amount of time. Yeah. So let's just do this from the framing of, I see the opportunity in the US. It matches up really nicely with the market I focus on. Yeah. I've done the research and I want to commit to building the US part of my business or I'm even employed and there's a US opportunity. Firstly, I don't know if you can comment on this or what you've seen, but what's a realistic timeline of going from, I'm going to start focusing on the US to start getting the rewards that you're hoping you're going to get. You've probably seen loads of different timelines, but what would you say is like a fair timeline to give yourself which you've seen? Yeah, for sure. So I think the US market is far more relationship driven. It's less transactional. So you have to make sure that you're building the time to get to know your clients and then need them once and you're matching the talent accordingly. So that's it's time to do. I think as well if you're looking at physically getting out here, you need to have proof of concept as well. You need to build a market. It's expensive to set up and get established in the US. So the certain performance targets, I think that you need to hit to get there. But I think lastly, what's key is you willing to just put in the work to do the US market? If you're doing it from the UK, logistically, you're looking at five to eight hours in time difference. So you need to be hardworking and not be afraid to do that. So I've heard all different rough timelines experiences, but if I was to say to you, I'm going to give it a rule. Go over the next six months and then I'm going to decide if I want to continue investing. And they're like, how do you feel about that? Do you think that I know there isn't just going to be one answer to this. From what you see in the conversations that you've had, what is not long enough? What do we think? I think it firstly depends on the market that you're in as well. And if you're in the right space, you've got the right person leading it and building it out. That's why we're just going to be the key part. I think you can make a real impact. I'd say after one to two years, it's a timeline that I'd allow a lot of people just rush and want to get into the US market and want to see the immediate return. But it doesn't necessarily work that way. So you have to give it enough of a run rate, really. Okay. Nice. Yes. Once to years. Yeah. What would you say are the main challenges of doing it from the UK, the personal impact? Like you went through that. There's more and more agencies now that just do the US from the UK. That's their game plan. So then that's what it is. The expectations. If you join my business, you're starting at 12, you're starting at 11 or whatever. And you'll work to 8, but then you might take some calls on an occasion in the evening. If I know that that's the expectation going in, then I guess that's fine. That's what I'm finding myself up for. What would you say are the main challenges with it? How did you find it? Is it the sacrifice of the personal life? For sure. I mean, I did it myself for three years. So you absolutely can do it. But I think it's more about how sustainable is that for your team? You know, from a business perspective, it makes sense. Salaries are lower in the UK. Fees are higher in the US. So from a business perspective, it's great. But if you're looking even from a timeline perspective, if you're in your early to late 20s, you don't mind. You're building your career. You don't mind the late nights. The calls at 10, 11, 12 at night to kind of, you know, get yourself off the ground building a new market. But long term, you want to be hiring people that's going to stay with your business for the long term. If you're looking, you know, 10 years in their career, are they really going to be wanting to continue to do those hours? And I personally think there's a lot to be said for having feet on the ground in the US. You know, you're integrated in the culture. You're surrounded by, you know, US nationals. You've actually got a real feel for the market that you're operating within. Along with the fact you're doing slightly more normal hours as much as normal can be in recruitment. But you can do it. And it can make business sense in the short term. But long term, I don't know if it's the most effective strategy. How did you do three years then? That's a long time. That's a long time. It is a long time. I did it for a year. Like three years is a long time. So I'm sure you had some weeks where you're like, "Oh my God, like how am I doing this?" This is the worst thing ever. Some weeks you would like this week was a good week. What did like a good week look like for you? Like what was the hours set? I don't know how. I'm sure you got better at managing the week. Yeah. So I started at 10 in the morning and then I'd be finishing at 10, 11 at night. But for me, I always knew I wanted to get to the US at some point. I studied here. I did a study abroad years ago and loved it. So it was always my ambition to get out here. So I knew that I had that longer term aim in mind. So it was the kind of short term sacrifice, the longer term gain of building my market, proving myself in the space, then get my ticket out to you America. If people don't necessarily want to move to America because that isn't for everybody, I think you've got to question, "Are these in police really going to stay here and want to continue to do this?" So a few of it sounds like what really, how do you keep going is that potential like the end of the tunnel or that potentially moving your life career to the US? Yeah, for sure. Okay. I know it will be personally different for everyone. But if you was running a team in the UK serving the US, how would you set up their work in the US? we eat a lot optimised for people actually staying there for a longer period out of interest. Like how would you set up the hours? I don't know, how would you think about it? If there was no chance of going to the US, the game plan was the UK and then maybe we'd go to the US once a quarter as a trip. - Yeah. - How would you set it up? - Yeah, I think companies have to show a bit more flexibility if they're wanting their team to do the US market from London. So, you know, they're gonna be having to take, you know, late calls and meetings and maybe if you say, right, you know, if you were to achieve X amount of interviews this week, you can have a half day, Friday, because we know that you've already been, you know, working, you know, long hours all throughout the week, providing their own going above and beyond from a performance perspective. So, I think it's about how you can show flexibility that isn't gonna hinder performance as well as going to be key. I think it may be a slightly more flexible start in the morning, you know, the realities are if they're starting at 10am UK time, you know, it's still very much early hours in the States. So, it's companies, I think, willing to show more flexibility and then ultimately, you know, the numbers should speak for themselves ultimately. Yeah, okay. Again, like, I feel like if you set the expectation for someone and they can see the opportunity in terms of like the reward they can get, some people, they'll be fine with it, right? And what I do often find with companies that their plan is to mainly stay UK bay, is that they'll make sure that, like I said, they'll go to their stay or where they focus, like at least once per quarter, or they'll make sure that they're intentional about the trips that they make to the US. Yeah. Because people that have spoken to it just make it a little easier when you've been here. You've, you're like going to the coffee shops that you're speaking to people about in terms of like the local air and you understand it, right? So, I think if you are playing that game, you've got to make the intentional effort and the investment to actually come out here, get in front of people and I've seen that, well, from people what they've said, that that's had a big impact. Definitely. And it's understanding as well. So maybe your clients are based in Boston, or Austin, for example. Can you talk about the things that are going on in the city? So in Austin, for example, it's huge for college football and this game's happening as well this weekend, actually, on Saturday. But what are we going to? But can you talk about that, you know, with your candidates and clients? Like how can you build rapport? Because I think now the market's been far tougher. It's so much more relationship-driven and people want to actually build a rapport with somebody and actually get to know them and it's not just purely going into business. So if you can get out here and, you know, see what the city has to offer, it's helpful from a business perspective too. OK. How about then, obviously, you went through this. I'm assuming you got a good amount of support on it, but I don't know how involved you are. How difficult was it to get the US, like the legalities, around the US, becoming US entity? Because I've seen you've now done it with your business. Yeah. Like how was that difficult? Was the timeline just tell us a bit about your experience of that? [MUSIC PLAYING] We'll get back to the episode in just one minute, but today I'm excited to talk to you about one of our partners, SourceWell, the industry leading business development and the head hunting platform. At the end of last year, SourceWell released an exciting new feature, the platform's very own live feed. Being honest with you, this feature has been one of my favorites today because it tells you exactly who's engaging with your outreach in real time. This means you can easily tell which leaders are hot and which is not, so you can connect with the right people at the right time to skyrocket your engagement. 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And that wouldn't have been possible if it weren't for SourceWell. As you can see, SourceWell is a great tool for driving better engagement, more meetings, and higher revenue. If you're looking for a competitive edge in 2024, then SourceWell could be for you. You can book a demo with SourceWell and mention the recruitment mentors podcast to enjoy an extra of 50 phone and 50 email credits per user. And this exclusive offer for this community is going to save you circa 500 pounds or more. So click the link in the show notes or you can go directly to sourcewell.com/demo. For sure, I think any UK business leaders come out to the US or probably get a few great hairs in the process. It's pretty stressful, but I mean, Jail Pro were part of a wider group of investment backing and they were incredible with getting us out here and there's lots of different routes to come to the US for us. It was proof of concept. So over 70% of our trade was across the US market. So we went down the E1 route, for example. Other businesses have to show significant investment in the likes of getting an office or other things like that to be able to set up over here. So that'd be the E2, right? So I think businesses need to be willing to put the investment in that it's going to take if they actually want to get up and set up here. It seems shiny and exciting coming out to the US, but the costs are significant. So you need good backing behind you, that's for sure. And yeah, we were fortunate with our setup. How long was the timeline from like starting the pro? I know it varies, but was your experience of like how long it took? Yeah, so we started Jail Pro February 2022. By the September, I was out here. And then we also brought out Josie Fraser as well from the UK. So there was two of us out here for the end of the year. So ours was pretty quick. Because the main visa piece I've heard is the E2 piece. Yes. What's the, like at a high level, this isn't a law podcast obviously, but what was like the base on the E1, how is that different? So you're saying you're showcasing that a lot of your revenue is contributing to the US economy. So there's different visa, but what are the main benefits to that going up? Yes, it's a very black and white approach because you're showing your trades and how it's US focused, whereas with the E2, it's more about business willing to show the investment in setting up an America and also having enough qualified people as well that would warrant them coming out here. Because I've seen more visas get denied recently. Whether that be people sending out less experience staff or they're seen as a non-essential employee to be stateside. So I think you definitely need to be thorough because yeah, there's a lot of stress that goes into that. So why don't we talk about then what has been your experience of and from what you hear from other recruitment founders and businesses, what would you say have been like the main big wins, positives of actually having feet on the ground here. What has that experience been like for you and then what have you continued to find from your conversations with the recruitment companies that actually then get here? They start building a team what have been the main benefits that you've experienced? Yeah, for sure. For us, it's been a game changer being out here from business perspective, but also personally as well. So business-wise, we obviously chose Austin because we cover the US market as a whole. So we can work West Coast and East Coast being on Central Time Zone, which has been amazing. Obviously they have the ability to meet with clients in person as well and actually build on the relationships further, which has been key. Being on the same time zone, it's an obvious one. But for me personally as well has been huge. And then also the ability to hire US nationals into our team. And I think that's key for UK firms when they're setting up in the US. A lot of businesses bring over some of their UK team, which is great, particularly if it's their top performers. But you can't just try and replicate the UK side of the business in the US. I think it's really important that you're coming to the US. You need to hire US nationals who can bring a new perspective and layer to the company as well. So if you've got any stories of like or experiences where maybe more like when you was employed, where you was really trying to get in with clients or knocking on the door, maybe had limited success or it was a challenge, but then you then were over in the country. You then got an opportunity to meet them and then the things like, except for now. I don't know, I'm sure you've experienced that or? Yeah, for sure. I think the world's changing our way. It's obviously all Zoom and Teams. And that's great to a point. But sitting down, grabbing a meeting room, grabbing a coffee, whatever it might be, seeing the offices in the space. For us, we can better position businesses from a rectal rec standpoint when we're speaking with candidates. We've gone into the office. We've met the team. We've looked at the hiring managers in the eyes and got a sense of who they are and what they're all about. So that's been critical. And then also turning around relationships that maybe have been, you know, slightly more challenging as well. Getting to no one another and the plans and elaborating on our story has been really helpful. Yeah, because I have heard that from quite a few people where like, yeah, sometimes it's been tough. Some people are good at being relationships for a screen. Some people aren't, but I've just heard it time and time again where they've gone over, they've got those coffees in and then it's just really just enabled them just to take that relationship to the next stage or just build on it where they go, you know what, I'm going to give Sophie an opportunity or yet, like, I'm going to give you these roles or you've got to really think about that and I do think that's going to be part of the strategy if like, you're still in that process of coming over here. It can be lengthy. I think you've also got to be prepared to invest in coming over here, getting in front of people, because I think now also enable you to just accelerate things or just get things through. There might be challenging when you're doing it from the UK. Definitely. Specifically, UK firms to the US then. What has been the most common play that you've seen And so is it typically being bringing over maybe if there's more than one founder, one of the founders come over here, it works for their lifestyle and they're launching an office or has it also been a top performer, top bill or whatever that is then back to the US. What has been the most common play that you've seen? Has it been that? For sure, UK leaders bringing over some of their top performers, if they had proven success, maybe they've changed, managed a team and really trying to replicate what they've done in the UK over in the US and even if I look at us internally at JL Pro, that's what we did. So I brought Josie out here a month after me and that's been critical to our success and growth. I mean, if anyone's, yeah, she's awesome on a more formal level but just in terms of being the top performer, she has managed a team, she's a type of culture that we want to create in America and the first you hire is a really key because that's tough. You're coming out here, you might not know anybody, you're in a new space and you're really wanting to make an impact. So the first few hires that you bring in are key because the cost are higher too. You mentioned it earlier, a proof of concept. How do you feel about that? So before we maybe make that investment, what does that, again, it will vary but when you say proof of concept, what does that mean? I can show that over the last 12 months you've done X number of deals, you've got, I don't know, how do you think about that when we think about proof of concept? Yeah, for sure. So somebody that's consistently build, somebody that's proven that they've gone out and, you know, one new business and if it's a 360 model also executed on that as well from a candidate perspective, I think it's key to bring somebody in that's had some sort of managerial responsibility because the intention I'd assume is if you're bringing somebody over from the UK, you want to help build and grow a team around that person. So they need to have the qualities and traits that you can rely on them as well whilst you're also building an office and probably building yourself. So what's going to be key to get right is before we maybe actually invest in getting people here is we've got a proof of concept. Yeah. We've won clients, we've had some success. Yeah. Obviously we want to make sure that we've picked the right person to lead her. Yeah. Where have you seen companies like full shore or struggle or make mistakes at this stage then? You see, it is a lot of the UK firms thinking that they can just completely replicate the UK model in the US when it's a very, very different structure. For example, and if you're hiring from an experienced perspective, a lot of the US firms have a split desk model, whereas the UK typically is 360, the UK markets far more competitive and saturated. So it's slightly more KPI driven and sometimes bringing over the exact model isn't suitable to the US. I think you need to be able to adapt slightly more, also realizing that people in the US, other things are also important to them. So you like health care, for example, that's a whole other thing in the US and looking at why the benefits that they can offer their team as well in different sort of incentive structures. So I think not just taking a very black and white approach and thinking it's one size fits all. I think they need to learn to adapt slightly. Right, I definitely want to touch on your experience on what are the compelling reasons why US National would join a staff and firm. It's going to be interesting. But let me ask you this, then just curious. Obviously, you're part of a wider group. You go into the UK office. If I was to walk into jail pro UK and then walk into your Austin office like I did today, what do you think would be some of the main differences that would make it? What would I maybe pick up on or what would maybe be slightly different, do you think? Good question. I like that question. What was the accent? Accent is likely different. Less sort of a Saudi accent. We want to create a similar sort of culture and environment in field, but I think particularly in the US, for us, I think it's even more relationship driven with how we're approaching our candidates and clients and let me slightly less volume focused in that respect. So it sounds like then if I walk into your US office versus the UK, I might hear less people doing the reps and not on the phone as much, but I guess what you're saying is like you mentioned KPIs earlier. So maybe on the US side, it is going to be a bit less input focused. This is. Or is that unfair, I don't know. Well, you still need to. Obviously, the KPIs element, you know, you still. Someone said to me once, if you want to make a perfect cake, the certain gradients you need to add to the cake to get the output. And it's still the same. You still need to have a certain amount of interviews or calls to get the results that you need. But I think this style to recruitment is slightly different. And the perception of recruitment is different in the US than it is in the UK. Sales and recruitment in general is seen as more of a respectable career. I think in America than it is in the UK. So it is technically less salesy over here than it is in the UK as well. Okay. Why don't we get into them? We've landed, we've picked the right person. Yeah. We understand and respect that we can't just replicate the culture and everything that we have in the UK. But as you said, and I've seen this from the UK firms that I know that have made its success in the US, is they've really committed to building a US team, right? Versus just trying to ship all of their UK recruiters over. Yeah. If you was head hunting a US national recruiter, what have you found time and time again that they care most about when it comes to being pulled towards an opportunity? Like, what is it that you typically sell that you feel like really motivates these people to go, you know, so if you have a habit of a conversation or what do these people really care about when it comes to being employed, a position of a staffing firm? Like, what comes out on top more often than not that they really care about? We'll get back to the episode in just one moment. 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I use it myself and I'm constantly impressed by how it evolves with AI and automation moving so quickly, SourceWell is going to enable you to keep that edge and keep you ahead of your competition. As I said, if you learn more about SourceWell and get your hands on and exclusive offer, go to the link in the show notes. Let's get back to the episode. Do you know what Austin in particular? Obviously, we've got an office here. Something that I've noticed that's really important here is some sort of, and this is a recruitment. You say this is some recruitment leaders in their thinking, absolutely not, but it's just a matter of fact. Austin's very outdoorsy. It's quite, you know, there's a great lifestyle here. So a lot of recruiters want some sort of flexibility or, you know, something like that compared to the UK where I think people maybe have slightly different motivations in some respect. So as a business, I think a lot of UK firms have really struggled coming out here. 40% they want to work less hours. No, well, people typically make more money, right? In the US, the salaries are a lot higher. So there's other jobs that they could do where they could also earn great money in some sort of sales environment. So I think it's about how can you incentivise your team the right way while also having some layers of flexibility? So flexibility they care about? I think if you're hiring the right person, they're going to be money motivated as well. So they're looking at commission structures, not just looking at base salaries, but what's OTE and how can I get my total earnings, you know, higher as well? You know, another aspect is the market that you're operating in. Is it a lucrative market? Is it an industry that's growing? That's going to continue to get investment as well? So these are key things that I'd be hearing and learning more. And I think also something else to look at is, you know, what's the average performance like in these businesses? What does good look like? And is it a high performing environment that I'd want to join? What about incentives that they care about going to, maybe not Ibif, but that's what I like today. Just scrolling on LinkedIn, I think Tim is seeing another research. Yeah, so like the cruise today, yeah, US Recruits care about that. Is that something they speak to about? Is it not? Yes, and of course, there's still obviously the trips that, you know, everyone will probably see on recruitment, but I think they'd prefer a half afternoon, half a fifth, you know, on above target, then the dress of the board. No, that's a good insight. Yeah. What about do they really care about progression and where they see their future in that business? Or is it more about the earning potential that they care about? Is that something that comes up a lot? For sure. And I think, you know, Austin isn't cheap or elsewhere, you know, in other state, if you look at New York, for example, or California, you're in the not places to live. So of course, earnings is always going to be a key, key question. And that's one of the key reasons from a wreck to wreck perspective where we see people wanting to leave. They've kind of hit a wall and they don't really know what next looks like for them or they're pushed down the managerial route and they actually don't want to be a manager. They'd prefer just to get their head down and focus on their own buildings and own more money, you know, themselves as well. So there's a number of different reasons, I'd say. Okay, yeah, I feel like that. That's also fairly similar in the UK. Okay. And then what about salaries and stuff? Obviously, you do the senior end. Yeah. A lot entry level. Yeah, like if I'm hiring a senior recruiter, I know it would vary, but like two years of experience, what we say and we can go for Austin. Yeah. what would be like not competitive and what would be competitive? Well, yes. So it's two years experience. You're probably looking at 60 to 75 is a loose bracket from a base perspective. But you have graduates coming in at 50K. So that's another area where I think UK firms can struggle when they come to the States because it seems shinier and exciting and it is. But the costs are so much higher in hiring entry level people even along with slightly more experienced highs as well. So they have to be willing to put the investment in and wait for the return on getting the new starters up and running. And then what we say in principle level, so maybe double two years, four years principle level, what we say in like and bandings maybe like what would be uncompetitive, what would be competitive? So I think part of it is dependent on somebody's buildings as well. Often there isn't a one size fits all approach to that. Plus commission structures, whether there's higher thresholds, whether there's make commission from day one or draw structures which are huge for US firms. But loosely at principle consultant level, say around the three years plus, I'd say you're looking at 70K plus 70K minimum. Yeah. You just said something draw or what's that draw? Draw. What's that? Yeah, some of the US firms have that structure. So basically you have to cover your own salary monthly before you'll start seeing commission. So and if you don't make a deal one month, then your draw could double the following month. So that's when it's either recoverable or non-recoverable. So you can take yourself in a sticky situation if you don't bill. Wait, so if I'm on a 70K, basic salary, is that then worked out monthly, what I need to bill with at least? So let's just say it's 10K. So if I bill over 10K, I'm getting paid commission, but if I don't. So it'd be 70 divided by 12, whatever your monthly threshold would be and you'd have to hit that number before you start seeing commission. So then in that structure, you'd really want your draw to be as low as possible. So then you can start making commission quicker. But the UK firms typically don't operate on that structure now. Like this is helpful for people. May vary, may not. What we're saying, because I'm sure you'll sell against it in certain roles. What's like a good commission structure versus a shit one? Yeah. So I'd say a good commission structure is one that incentivizes top performers, not average performers. So that's what I think is really going to be key. If you want to attract the right talent, you're just be paying out at a high bracket. If they're going to be doing upwards of 100K months, for example, I think you'll attract average people if I think you're giving commission out from dollar one, because they could get away with doing 10K a month and still make a few thousand off the back of that. So if you want great people, be willing to pay higher tiers for the more work that they're doing. What have you typically seen that works with that? Then like over 50K, they get 40% or I don't know, what have you to what's been the most common thing that you've seen. So I've seen commission tiers all the way up to 60% from a payout perspective, but that's, you know, you're a top, top million dollar bill. So it really depends, you know, according to the business, often what's quite nice is a quarterly structure. So you'll say, OK, billings are reflected. We'll look at your billings on a quarterly basis, but we'll pay out monthly. So you're still getting the commission coming through. But what it avoids is some people that are trying to get a one huge month, and then the blank month, and then another three-month, and the blank month, which is awful from a business owner's perspective because your P&L will be skewed. Well, let's just go through that, because I think this would be helpful. Just because the reason why I want to make sure that people understand this is because I've interviewed people on here and you'll see it people online and you'll see it. And they'll say, we've got the best commission structure in history. I hate that quite a bit. So there's a lot of best commission structures. That's what I mean. So let's just do this from the framing. I do like the quarterly, I think, that's smart. Yeah. Because it avoids, we just mentioned. So why don't we just do it? If from all of your experience, all that you've seen, all of the great commission structures that you've seen, if we wanted to do, anyone listening here wanting to implement just a solid commission structure that you would be like, you know what, that's good. That's a good solid commission structure. There might be some companies that might do it better, but that's a solid place to start. Or you're going to find it hard to be to what would that look like. Let's just break that down. Sure. So I would be make it reflective of a quarterly billing life cycle, because I think it's more reflective of someone's total billings in a yearly timeframe as well. You know, there'd be a certain threshold that they'd need to hit before they start making commission that had helped, you know, business owner help cover initial costs, particularly if they're in the US where things are far more expensive. And then after that have a tiered structure off the back of that. So the team were incentivized. So maybe the first deal that they do, they're getting paid out with 20%. Then from maybe deal three, they're getting 30%. And it could even go all the way up to 50%, 60%. If they're going to be a top, top performer. Because then you create the right environment. You have team members saying, right, my next deal that I'm going to do, I could get this in at 50% payout. And from a business perspective, you know, they should want their team to have great earnings if they're putting up really strong numbers and being a top performer, you know, internally in the business. Yeah, I'm not the most honest. But then I think the other aspect to it that's really important is, you know, you want your team to see the upside of all the hard work quickly. So I always think, you know, as soon as a business gets paid, the team members can get paid the following month as well. I've seen some firms where they wait for commissions to be paid out until rebate ends or things like that. I personally think, you know, you want the team to be incentivized, earning great money and see the upside for the work that they're doing. Right. So just so understand. Yeah. So it's done quarterly. Yeah. I don't know how you do it in your business. Is that what we do at? All right. So I'm going to make it understand. Because I feel like I don't fully understand it. And people are listening might not. So my commission is done quarterly. Yeah. Like if I build 100K in a quarter, when I hit certain thresholds, I'll get more of a percentage. Yeah. But I'm just trying to make sure on how is it paid monthly then? So say, for example, month two, they've done $40,000 over the quarter. Or in that form. So yes, you've got the business will be broken down quarterly, reflected in three month periods. Yeah. So month two, they've already done $40,000 that they should get commission paid out on. You'll obviously invoice a client that month should everything get paid on time. The team members would get paid whatever they would do from that 40k the following month. Right. Then say a month three, they do another $40,000. So in the quarter, they're not 80k. They're doing 80k. So then the next month, they've already hit the next commission bracket. It's say 35%. So then they get paid out for the other portion of that 48 with 35%. Right. So you can still pay it out regularly, but they just get higher and higher, higher pay out percentage. So the quarter goes on. The quarter goes on. Right, understood. And then I know it all vary, but let's just wrap this bit up. What would you say is like a competitive, fair, base threshold, like in terms of like, do you often see comments say anything from 10k, you're going to start getting commission from, I don't know, what have you typically seen? So it varies. Sometimes it's a flat figure like 5, 10k. Sometimes people make it reflect with someone's salary. Okay. So say if someone's on a slightly higher salary, they might say, okay, you need to cover your monthly salary and then you start making commission. Sometimes if it's reflective over a quarter, it could be double your salary. Okay. With that three month period and then you start making commission, so it can depend often the higher threshold, then the higher the commission percentage will be because companies will want to attract people with a higher percentage if their threshold is going to be higher. All right. Okay. Cool. Good luck. Yeah. Absolutely. Again, like if we want to be successful at growing our US business, this is key. And like completely, like she should obviously again, from the position that you see it, it's really helpful to know like what actually is a good commission structure. Okay. So you mentioned earlier in terms of the nuances of if I'm UK based, go into the US and I'm now trying to grow my US business and I need to grow the US nationals. Yeah. I'm not saying here, but I might find myself taking US nationals from US staffing firms where they haven't built their careers on free 60 in the free 60 environment or whatever. So let me ask you this, from the firms that you support the UK that then go into the US, does the free 60 model work? What we say and like what have you often seen? Yeah. If it's perm, definitely. Okay. If it's contract, usually it's split desk, so you'll have the BD team and then the delivery team. Often what we see is, you know, maybe it's their launching in a market where there isn't a lot of recruitment businesses that they'd want to pull talent from. The companies are going to have to have some sort of flexibility. Often I see UK firms slightly more open to taking someone who's done the business development in sales side and training them on the candidate piece less so from the candidate piece going to business development because that's the harder side of the deal. If I'm hiring US nationals from US firms, the one I just have to do a good job is, I'm a good job of really getting into, okay, they've got four years experience, but how much of that was just in the delivery side or doing the account management side. Do I just have to be really good at making sure I understand that? Yeah. In the interview process, all these things, because I feel like I've definitely heard people get cut short on that. For sure. Or using great rect directive. Yeah, of course. Of course. Of course. Okay. But something that we hear a lot is people say they do business development, but maybe they've worked for a large staffing firm and they've actually done account management and they don't actually know how you go out and win new business. So it's like really digging into that piece. Can you go out and win business, build relationships and not just be handed. Just get real life examples. Yeah. Okay. So I've often heard this as well. I don't know what you've seen. What about in terms of the strategy of how they actually approach the market? Because I've heard that can sometimes be different compared to US firms as well in terms of US firms typically have been like more generalist versus like niche. Yeah. Is that fair? accurate or because in the UK, because it is so competitive, one of the competitive editors you can give yourself is like, all I do is speak to software engineers that do this particular language and that can become a competitive advantage. Yeah. Like, how does that play out in the US in terms of staffing firms? Are they more generous to picklay or no? Yes and no. I think it depends on the business and their size and structure. Like, even some of the UK firms that will come out to the US, maybe they've got a team of two to three to start with, so they have to be slightly more generalist and broad in their approach to start. But as they scale, the best way I think is for each of their team members to have that niche focus. They can build their network, push the referral model, get access to the candidates that companies would want to pay fees for. And even for us internally, we're structured that way. Everybody in our business is specialising in a particular market because that's when you can really build your network. And I think be more value adding than just saying you do everything at a very headline level but don't actually truly know the space. Okay. I've met a couple of people this week so far and we're talking about it here and I've heard it a few times where they're finding it really fucking hard to hire good people. What brings to mind for you? Where would your mind go on? Like, what maybe they're not doing a good job of or maybe what they need to think about? I've heard that a lot. It's been tough for a lot of people I've been met a lot. You can move to. So I think first, I would ask why, what's not been hitting the market? Is it their feelings or is it the fact that they maybe have been slightly more generalist in their focus or culture wise or a lot of the time senior people then want to step out of production and purely do management, which are the really hard roles to fill right now from a wreck to wreck perspective. So why? What's not been sticking? But then I think they also need to look internally as well. The candidates might not be right but then it's also about taking a step back and thinking, well, are we offering the best packages internally or we paying competitive, base salaries, compensation, great incentives? For UK firms coming out, healthcare coverage, 401k. And is there anything else that they could be offering the team more? Are they selling the right story? Are they having case studies of their top performers and kind of letting new people that are interviewing help visualize, this is what I could achieve in this business by having that case study. So I think it's about evaluating their process. Is that being run as effectively as it could be? Are we operating the right way in how we're incentivising the team? And then also looking at how they're getting talent, is it? It's on both sides, isn't it? Yeah, exactly. You've got to get internally and then also you're really clear on the top of person that you want and stuff like that. So anything else to share in terms of, like, because you've been here like a good amount of time now, what have you often found in UK firms that have come here that have really struggled? Is there anything else that maybe you've seen play out or come in mistakes? A real quick one from me and we'll get straight back into the conversation. Some of you may or may not be aware that I am also the founder of a business called Hector. Hector is an all-in-one training platform for recruitment founders to maximise team performance. The reason why I'm sharing this with you is because if you are someone that is enjoying this podcast week after week, you might even share this podcast with your colleagues, then I'd love to connect with you. Your training platform is powered by top performers delivering practical training for today's market. We believe training a lot of the time in the recruitment industry is dated, is stale, is delivered by people that did it five, ten, fifteen years ago and we are completely going against that. So a lot of the people that you're able to learn on this podcast, you're able to learn even more from at Hector. So if you'd love to find out more about how we could potentially help you get more out of your people, ramp up their performance more quickly, then please connect with me on LinkedIn or click the link in the show notes where you'll be able to book a call thus. Let's get straight back into the episode. I think thinking that the UK model can just be replicated in Austin being, or wherever it might be in the US being one of them, not being willing to actually make the full investment. Maybe they've already got an expensive office and moved people over. These are in the cost attached that are expensive. So actually being willing to invest in the team in a market that has been really challenging the last year, I think, is key. If you're going to do the US market, you have to really attack it and be wanting to scale and build something impactful. And then really doing a deep dive on the types of people that they're wanting to hire, what's a flexibility? Are they replicating a 360 model? Are they open to changing that? And just thinking about how they're actually going to scale effectively as well. Yeah, fair. You can't have half-asset basically. But in a location, I think, too, a lot of British businesses, I think of New York who, or California, is a place that they want to set up. I did as well. Being in the UK, going to New York or California sounded great and exciting and the buzz of the city. But then you wanted to be-- Why did you pick Austin then? Yeah, because that was just one of the main bits in terms of your experience or expertise on states from your own journey and people that you spoken to. Yeah. The rest of us were amazing and they said, look, where do you want to go and build in the US? If it makes business sense, we'll back it. So I did a deep dive, a lot of phone calls, a lot of friends, conversations. And we decided on Austin, well, for a few reasons. I think you can work West Coast, East Coast, really effectively, obviously, from being based in Austin. Great schools to hire from internally as well. A lot of people want to move here. Are you in a city where people actually want to be in? We have people relocating from New York or California cost. There's no state tax here, same with Florida, another one that's booming at the moment. For that exact reason, whereas New York or California, it's pretty steep. And then personally, I think something that does get overlooked is when you're moving out here, you have the business lens on and think, we're going to be moving here and we're going to be great for the company. But then you also have to pick up your life and move. And it's a lot. You have your friends and family back home. So, is it a place that you like and want to be in? And I mean, yeah, I'm from Newcastle and it rains most of the year. So, coming to Austin where it was sunny, 320 plus days a year was great outdoor city, lots to do. And so, I think you have to also think, where do you actually want to be? Because if you are happy in a place where you can see yourself being in for the long term, it makes hiring and growing something a lot easier. And like, how could I personally give myself a better chance of doing that? Was it just speaking to people? Was it actually coming here and being here for a good amount of time on like a holiday and experiencing it all? Like, how did you approach that? Was it just coming here and experiencing it all? Yeah. So, I spoke with a lot of people. And obviously from us, from a rectal rec side, I had the advantage of speaking with other leaders, how we're finding it, New York's hard from a retention perspective to keep people because the cost is so high and salaries need to be higher. So, we had a lot of conversations with different people. I came out to Austin and visited it and let most people that come here, it's just got a great vibe about the place and absolutely loved it and then work wise made a lot of sense. So, yeah, here we are two years later. I do think it's really important for people like you said earlier in terms of, you're going to give yourself an advantage if you're in a state where people actually want to move to. Completely. If we're thinking about growing something in the US, whatever that looks like, if it's 10 people, if it's 20 people. Yeah. You're going to give yourself an advantage if it's actually somewhere in America that people are actively moving to. Yeah. So, I think that's something that in the couple of days that I've been here, it's very rare that you actually meet someone from Austin. Oh, so rare. Yeah, everyone. So many people have actually moved here, right? So, when we think about growing our businesses and hiring, yeah, if you're already in a place where people actually move it and you're, it should be hopefully until it gets really bad brand or whatever, like it's an expanding talent, it's luck and error, it's just a continuous growth of like a talent pool because people want to move here. Completely. So, three hubs that seem to be booming right now are Austin, Tampa being another one in Charlotte as well in North Carolina. I'm seeing that crop up a lot more. Really? Yeah. And then you know when you say, I'm going to know this isn't a finance podcast, but when you say there's no state tax, like what does that actually mean? Yeah. But in like, you, I don't know, UK terms a lot, what does that actually mean? Yeah. So, basically, headline level. If I was in California or New York, for example, you could slash another 10 to 13% off a paycheck on an annual basis. It's just from a state tax perspective in terms of where you're based and located. So, Texas doesn't have that. So for your earnings, you know, earnings wise, it makes a pretty big difference. Same with Florida, which is why a lot of people are looking there too. And then what about from company level? Like in terms of like, do you get any, is that the same? Like in terms of like, in the UK, like corporation tax and stuff like that? I don't know. I don't know. I'm putting on support. Yeah. I'm not doing that. This is a financial, but like, I was going to say, I'll find out still. No, but as you've explained that as an individual, the benefits that you get, like you said, actually that could add that to a lot. Yeah, for sure. You have to have them to pay out, right? For sure. And tell you what you could be paying. Yeah, even offices as well. I mean, they're not cheaper, but compared to, you know, other areas you can get. You've seen all of this as a great, you know, space and, you know, located downtown. And a place where people actually want to work. You know, I think a lot of the UK firms now are pushing people to be in office. And you need to have an office that people actually want to. Yeah. Mentally, great, great space. Is Austin almost becoming from a recruitment standpoint? Like, if you move here, we just spoke about the benefits, but are you making it more difficult for yourself to hire recruiters? Because they're just. there's a lot more competition, I don't know, how do you think about that? Someone said that to me recently. I mean, there's a lot of businesses opening up here. That's for sure, even in there, we're in an industry. So there's always another of the British business popping up. But I mean, comparatively to the UK, there's still so much opportunity. So if someone was thinking about where they wanted to set up, I'd still completely back. You don't think you're going to give yourself a real disadvantage in terms of like, usually, every time you interview someone, they're going to be interviewing or like, forever recruitment agencies at the same time. Because that's the challenge with London. I mean, it's the same in London, but I think that's the way you say it. As you say, yeah. Can you build a compelling story, the platform and everything that you can offer? But I don't know, like, like you said, it's a big investment. So is investing and setting up in Austin also making it harder, don't I? I think comparatively to London, people would find it a lot easier to hire if it's for the right person, yeah, from everyone's interviewing everywhere, perspective. So what would be your sort of parting advice and for anyone that if you got to this point in a conversation, you're obviously interested in, let's do it from two perspectives. Yeah. If you're interesting and moving your career to the US, yeah. What would be your sort of advice to a friend on what they should do, your sort of checklist on like, okay, if we don't have a criminal record, we've got a degree all those bits. Yeah. And I've seriously considered where I want to go. Personally, it makes sense for me, like what would be your advice to me is like a friend and like how should I approach it? Yeah. Should hopefully me in that I move here and I'm like, fucking how this is amazing, like, yeah, because yeah, like yeah. You don't want to go back. Yeah. Yeah. So my first bit of advice is are you doing it with the right business? Because as we mentioned, everyone's wanting to have their piece of the US and open and expanded. But what actually are the companies growth plans and where do you sit within that? And are they willing to put the investment in that it truly takes? So I think really understanding their story and where you sit within that's really going to be key. That'll be my main piece of advice that I would share. That also like plays out in the UK right, but I think even more so, if you're moving your life to a different part of the world. Yeah. You want to try and do the best that you can to make sure that you've picked the right manager or you've picked the right business, as you said. Because there will be times where it's hard challenging personally. But if like work feels good and when you get to work, you're engaged, you're motivated, it will make the personal stuff hopefully not feel as bad because that might take a bit of time to make friends or whatever. Yeah. But if when you do shop to work, like I said, you're engaged, that's hopefully going to massively help. So there's only so much you can do, but like how can I really give myself the best chance of really knowing what I'm getting myself in for? Because there's only so much you can do, do you know what I mean? Yeah. Is there any extra steps that you'd really recommend people to do that could hopefully give them more confidence that they're making the right decision on the business? Yeah. So I'd sit down with your hiring manager, understand the story, the growth plans, where you sit within that. I also think as well, if you're going to uproot your life and move to the US, coming out and seeing, you know, the place that you could be living is going to be really, really important. It's just a place that you can really visualize yourself living because there are a lot of uncertainties. And even when you move out, I remember when I got off the plane, we were waiting on Joseph's visa at that point. We didn't know if it was going to happen. It was about eight o'clock at night. And everybody who's your support network's at home and in the sleep just from a time zone perspective. And it's like, oh wow, okay, we're really doing this. Got to find department, get mattress, get an office, all of that stuff, which is a lot. So you have to really, really want it. And if you're coming out here and are truly excited by the opportunity, you're confident you're with the right business that's going to back you. You've already had, you know, some sort of track record in the US and you're building your network here. It's an amazing thing to do. And, you know, even what I thought when I was, you know, coming out here, like what an opportunity you get to, I'm an experienced in your culture, living in the US and having that has to offer. So what's the worst thing that can really, really happen? I think, yeah, I think this smart thing to do would be just don't get caught up in the work opportunity and just ask the work questions. Yeah. Also try and speak to people about the personal side of it. Like how have you found building your social network in this place and like, also, personal questions as well? Because that's a big part of the equation. Yeah. And I think that can get overlooked because everyone just has their business lens on, but it is a lot, you know, a team member's coming out that you can gel well with, but you don't want your whole network just to be your work colleague. Yeah. Because you need to kind of push yourself outside of that too. And on the flip side then, again, speaking to a fellow founder, you have your own business. What would be your advice to them in terms of having the best chance of building a successful US part of their business? What would be the sort of bits of advice? Good question. So for me, pick the right location in the right, you know, market area that makes sense for you as a business. Have the investment behind you to scale effectively. The first few highs that you're going to make are key. So whoever you're either choosing to bring from the UK, make sure that's the person that want that you back to create the culture and the set the expectations that you want when building a new business. That's been huge for us. When we've obviously scaled internally as well, set the expectations that you want, you know, as a business, clean milestones and targets that you want to achieve. And have a hiring plan and strategy and just don't try and wing it and you know, hope for the best when you're out here, you know, are you wanting to be strict with that 360 model? Are you open to hiring US nationals with different experience levels? Just really think about how you're going to scale and get set up to make sure that when, you know, the costs are higher that you're in a good position to not be too scared by that. No, yeah, I love that. I do think we should always come back to having the right people in the right seats. But your market strategy is right, locations right. I do think the biggest chance you can give yourself for making a success of all the investment you put in is that founding team. For sure. Like, that's got to be such a, if everything else is right, yeah, even if it takes longer than you hope for in the long term, it's probably going to play out if you've got that right founding team. So I guess yeah, we really don't get complacent with that. Yeah. Or getting patient like, all right, let's just get it going. It's been long enough now. Let's get over there. Definitely. I think that's the thing that I'd really underline is making sure that you have those right people. Yeah. Yeah, I feel like so much of it rides on that. For sure. And how I like to think of it is, if you had to go out the office for the day for whatever reason, something personal comes up, you can't be there. Do you trust that person to run the day, start to end effectively and set the standard for the business and how you want to scale things? And I think if you're confident in that, it's a good sign. Love it. Thank you so much. So many great things for people to learn from. And thanks so much for joining me. Cool. Thanks, having me. Thank you so much for listening to this week's episode. I hope there were plenty of golden nuggets for you to take away. As you know, I'm your host here of the Recruitment Mentals podcast. But I'm also the founder of Recruitment Mentals. We're an online subscription based learning and education platform. We're on a mission to help thousands of recruiters achieve their professional goals and successfully progress their careers through modern and engaging online learning. If you're a recruitment business owner listening to this, there's a good chance that you value self-development, personal development. You're trying to develop a culture of continuous improvement. But we've partnered with a number of grown recruitment companies who were struggling to understand how they can invest more in their people, how they can upskill them more quickly without spending more time, without having to spend thousands of pounds of external trainers. And we've ended up being a really great fit, modern fit for recruitment teams. We can ultimately help you get more out of your teams by giving your people access to modern and engaging online learning, which they can access on demand. The thing that's really cool about what we're doing at Recruitment Mentals is that all of the people that your teams are able to learn from and the people that are delivering the learning content are people that are in roll right now. They're billing. They're actively facing the challenges that your teams are and a lot of the time they're amongst the top performers within their companies. Which means your teams are going to be way more confident to learn and spend on their learning when they know they're learning from people that are doing it right now, have been there and done it. There's nothing worse than feeling like training is not relevant and not current. The best place to find out more about Recruitment Mentals and if we can help you accelerate your team's performance is a semi-missage on LinkedIn, connect with me on LinkedIn directly and I'd love to connect with you and find out if we can help you get more outwalled your people.