All-In Recruitment is a podcast by Manatal focusing on all things related to the recruitment industry’s missions and trends. Join us in our weekly conversations with leaders in the recruitment space and learn their best practices to transform the way you hire.
This transcript has been edited for clarity.
Lydia: Welcome to the All-In Recruitment podcast by Manatal where we explore best practices, learnings, and trends with leaders in the recruitment space. If you like our content, please subscribe to our YouTube and Spotify to stay tuned for our weekly episodes.
I'm your host, Lydia, and with us today is Jeremy Jenson, CEO of Encore Search Partners, LLC. Welcome to the show, Jeremy.
Jeremy: Excellent. Thank you for having me, Lydia.
Finding People Who Align With Your Mission, Vision and Values
Lydia: So, Jeremy, you've been with Encore for 11 years now, specializing in headhunting. Walk us through that journey, maybe in the past four or five years, where we've seen all these disruptions to the industry.
Jeremy: Absolutely. So, as you mentioned, I started the firm back in January of 2013. It took us about six years just to hit a million dollars in revenue. Then over the last five years, we've accelerated from that million to now we're doing about 12 million a year in direct hire billings.
What has really contributed to that growth over the last five to six years is I brought in a VP who's now the president of the company to implement processes, systems, and accountability—basically that core infrastructure in order for us to grow and scale. It gave us the right fundamentals and ecosystem to bring in subject matter experts in their practice area and then help build teams around those individuals in order to build multi-million dollar business units.
That's really what's contributed to our success; bringing in people who were experts in their field and then leveraging our marketing technology resources in order to grow them.
Lydia: I saw, in reference to the email I think that Ashley sent, correct me if I'm wrong, but it's a $10 million valuation right now, right?
Jeremy: So, we're trending to do over $12 million.
Lydia: What's the projected growth like this year?
Jeremy: Well, we're all about that steady growth. I don't think that there's any reason for us to have 50 or 60% revenue growth year over year. I think that's really easy to do whenever you're a small, $1 million to $2 million, and $2 million to $4 million. But once you get to that $10 million mark, we want to make sure that we're growing healthily.
We don't want to just hire 20 people for the sake of hiring 20 people. We want to make sure that the people align with our mission, our vision, and our values, and that we don't really disrupt the culture. So, that's really what has been important for our group.
Get Subject Matter Expertise to be the Rainmaker
Lydia: Jeremy, in terms of scaling the business as you mentioned, bringing in the subject matter experts and putting those processes in place, and keeping those foundations in place so that you can scale later. From a founder's perspective, what mindset do you need to have to enable these things to happen?
Jeremy: That's a great question. What I would say is that it took me a little while to realize that I didn't need to be the smartest person in the room anymore. When I started the business in my late 20s, I was finding that I was the smartest person in every room that I was in. I was the best recruiter. I was generally the most financially successful in my friend group. Then I joined a group called The Entrepreneurs Organization, where we didn't have individuals who were making a million dollars a year. They were making a million dollars a month. They were employing individuals who were running the business for them, and they didn't need to be the Rainmaker. They didn't need to be the superhero.
So ,I would say that from a founder standpoint, it was a turning point in my growth and recognizing that I didn't need to have all the answers. I didn't need to be the best recruiter in the room. It really allowed me to go out and get people with complementary skill sets and complementary subject matter expertise, and tell those individuals, “Hey, I'm a digital marketer,” “I'm a lead generation expert.”
Lydia, if you come over to Encore Search, by using our tools and resources, we're going to help you grow your business from a million dollars to five million dollars. We have a proven track record of growing recruiters in that regard, and that's been instrumental to our growth and will continue to be our growth strategy over the next five years.
Lydia: Moving back to headhunting, there have been trends of people moving from one industry to another, and we're seeing differences in trends of work arrangements and such.
Have you observed any changes regarding that when it comes to high-level employees changing firms? Are there any particular industries or sectors where this is probably more prevalent than others?
Jeremy: Absolutely. So, our firm specializes in a few different areas. But the area that we've had the most success in is working with professional services firms, where the people are the most valuable asset. When I say that, in a manufacturing company, maybe their technology, their manufacturing process, and their products are typically going to be their selling point.
But in a law firm, a wealth management firm, a private equity firm, an architecture firm, an engineering firm—environments where your revenue is generated by your billable hours or your people—that's going to be where we see the most influence as headhunters. If a CPA firm loses an eight-year experienced tax manager because that tax manager goes in-house and goes to work for one of their clients, they're losing that experience and that intellectual capital at that mid-level. It becomes very difficult to get that fourth-year senior associate to step up into that senior manager role, and so they end up having to come to direct recruiting firms like Encore Search Partners.
Then we utilize our outbound headhunting process to poach people from their direct competitors. So, I would say that's where we've had the most success; by recruiting for professional services firms where the skills and experience of the person really give our client a competitive advantage. Because odds are, those individuals are not active on the job market, especially not if they're going to be doing the same job for the same money at a similar firm across the street. So, it requires a skilled storyteller, a recruiter that has the ability to reach out cold to an individual at their office, through email, through cold calling, through a Facebook direct message to get their ear and for us to share a story on why our client may be a better fit for them, their family goals, their work-life balance, and their financial goals. It could be a variety of reasons why that individual might be willing to make a change.
Executing Strategic Recruitment to Poach Top Talent in Competitive Markets
Lydia: Let's say you've connected with these individuals, passive candidates, as you would call them. But these are potential employees for your clients, and what might be some factors that would typically drive these employees, candidates, or individuals to consider changing firms?
Jeremy: Yes, great question. Obviously, the number one is compensation and I think that what we're seeing is a lot of firms migrating from just offering a straight base salary to maybe doing a base but then a variable compensation tied to the actual revenue that they generate for the firm. It could be a base salary with a variable bonus. But what we're seeing is that because data science is so prevalent in business today, we can actually see the analytics on how profitable an employee is benchmarked against their peers.
Let's say I've got a seven-year senior associate attorney in a litigation practice for a mid-sized law firm in Birmingham, Alabama. They might have gone to the same law school, got the same GPA, and been at the firm for the same number of years, but now they have insight into, “Hey, I generate $800,000 in revenue for my firm, and the person with the same salary in the cubicle next to me only generates $500,000.” Structuring a compensation plan or a mechanism that can compensate that more profitable employee on a variable basis will help insulate losing them to a competitor. Or better yet, what helps us as recruiters, is it helps us poach people at firms that don't offer those variable compensation structures.
What I'm talking about is individuals that are more efficient and profitable. They know that they're an A Player, and they want to join firms where they're going to be compensated fairly for their increased profitability. So, compensation is going to be the number one. A clear upward path for mobility within a firm is certainly going to be a big selling point as well. Sometimes we're sharing a story that, “Hey, 83% of the partners in this firm all started as interns straight out of college.”
So, it shows that they do offer clear paths for upward mobility. It could be to high performers who are individual contributors, that are women. We could note the number of female partners or female individuals in leadership. That could be a big selling point, which would be a DEI initiative, or maybe work-from-home capabilities and a flexible schedule. Those are some other reasons why high performers would be willing to make a change to go to one of our clients.
Lydia: You talked about professional services in which those skills are nonnegotiable to the actual revenue and the kind of business that you build. But in terms of hiring individuals without traditional degrees, what might be the approach towards that?
Jeremy: Yes, that's a great question. What I'll share is, in the corporate world, let's say you're with an end user now, with us being in Houston, Texas, we're really tied to the oil and gas industry. All of the different ancillary products and services related to that, whether it's trucking and logistics or manufacturing or quality assurance. But let's say the big oil and gas companies—ExxonMobil, Shell, BP, and Conoco, found that the big direct manufacturers and operators require college degrees for any professional or technical role. But they quite often use third-party consulting firms to do a lot of the legwork, whether it's inspection services, CAD design, and things of that nature.
Traditionally, whenever they select those third-party firms with regards to being on time, being on budget, and quality work, they really don't ask those consulting firms, "Hey, let me see the resumes of the individuals that are doing the work." They're really banking on the reputation of the firm. So for those third-party firms that are not major operators, we've seen them really migrate to hiring professionals that are non-degree.
I think what kick-started that off is the technology industry. For individuals who are self-taught software developers, from a UI or a UX standpoint, we're finding that they can get formal education by utilizing YouTube training tutorials or e-learning tutorials so they can become skilled professionals without going through a traditional four-year college degree route.
Because the tech industry popularized non-degree professionals, we're seeing a lot of third-party consulting firms start to hire non-degree professionals. Unfortunately, we're even seeing them start to utilize professionals from an offshore standpoint. We've got a lot of architecture firms and engineering services firms that are utilizing individuals in India and Southeast Asia or near-shore environments like Costa Rica or Mexico, and then still maintaining their bill rate to the client at a premium level.
That's a great way to have access to a larger candidate pool if you were to consider either offshore talent or non-degree talent.
Meeting the Demands of High-Performing Gen Z Talent
Lydia: We're seeing the workforce continue to diversify and expand. We see Gen Z coming into the workforce now, and there are obviously plenty of differences regarding the expectations of Gen Z.
So, when it comes to compensation, as you mentioned earlier, are there any differences, or what is the kind of expectation from this generation of people entering the workforce when it comes to compensation and benefits other than generations before them?
Jeremy: So, what I’ll say is, the disparity between an A Player and a B Player, specifically in Gen Z, is greater than it’s ever been with any other generation. There are individuals coming out of college who are amazing problem solvers, great critical thinkers, extremely intelligent, and inquisitive. They really try to understand the ‘why’ behind the ‘what.’ But then there are a lot of people who were essentially raised on technology, where a lot of the thinking was just done through. It’s sort of like paint by numbers in business.
When evaluating entry-level or early-career candidates, specifically Gen Z, it’s important to conduct a skills assessment or even an aptitude assessment to see what their ability to learn is. What we’re finding is that Gen Z, in my experience, has a massive level of entitlement and I don’t necessarily think that’s a bad thing with the A Players.
We’re seeing individuals come out of college with non-STEM degrees—degrees in marketing, biology, or communications—and they want an $80,000 base salary. You and I, when we started out of school 15 years ago, were starting at $30,000 or $35,000, right? It’s a difficult pill to swallow to give that to a first-year associate straight out of school. But if you have the right assessment tools to recognize whether this individual will be a rock star in our environment, you can adjust the offer to secure them, as long as there’s clarity regarding the amount of work ethic and effort they need to put in.
Gen Z is able to get more done in less time because they understand automation and the utilization of AI tools. They try to find the most efficient way to do things, not necessarily just working on an hourly basis. Accommodating their need for flexible work schedules, hybrid work schedules, and even allowing social media during the workday is important.
Spotlighting who the B Players and A Players are, and accommodating the A players’ flexibility needs, is crucial. I’ve even seen employees trade $5,000 or $10,000 in salary just to have more weeks of vacation or paid time off because they value flexibility more than just the bottom dollar.
Lydia: So, Gen Z is starting out and entering the workforce, and it might be a bit of a challenge to discern which one is an A Player and which is a B Player so early in their careers without that environment of challenge or that space to grow.
So, what might be some ways to, I mean, assessment is one thing that's a good point of coming in, but later on, in terms of really looking at the growth of this generation of candidates, and also looking at retaining them in companies, what might be some of the ways to look at this?
Jeremy: Yes, great question. From a skills assessment standpoint, we implement a resource called the Criteria Assessment. It's kind of like a Wonderlic, where we get a raw score associated with just a standardized test. So, we have a threshold there, and then, essentially, it does an assessment to see if they are aligned with whatever role they're interviewing for, whether it's sales and business development, accounting, or finance. But to answer your question, the telltale sign of what we utilize is we interview with our core values, and it's different for every organization.
Somebody who's going to be a good fit at Nike may be a completely different fit for an individual who works at GoPro or the Professional Bull Riders Association. So for us, excellence is key. The continual pursuit of excellence, somebody that is really steadfast and focused on continual improvement, that's our number one core value. We want to hear people who are constantly becoming better versions of themselves. Are they listening to self-help podcasts? Are they consuming media that solidifies their mental health and physical health?
Continual improvement, excellence, and resilience are big core values for us. So, we'll interview them and talk about times when they faced adversity. Do they have grit? Do they have fearlessness and determination? Some of the qualities we look for are individuals who worked their way through college or maybe grew up in single-income households. Gratitude is also a big component. During the interview process, we see if they are taking full responsibility for their success or extending gratitude to others who have helped influence their success.
Professionalism is also a core value of ours. Do they present well? Do they take pride in their appearance? Do they have unread text messages or emails on their phone? We look at stuff like this because we want individuals who are responsive, accessible, and take pride in having a complete workday. We also look for individuals who are coachable. We look for former athletes and individuals who have been in those types of environments, people who are open to direct feedback, and individuals who know how to lose the right way, not getting upset when faced with adversity or a no.
We also look for individuals who are meticulous and competitive. From a meticulous standpoint, do they take pride in their grammar, spelling, word structure, and sentence structure? We audit their social media and look at things of that nature as well. One of the things that we've done really well as a 40-person organization is about a year and a half ago, I hired a full-time Talent Acquisition Manager. She is responsible for recruiting all of our talent and for our learning and development initiatives for the existing team. Her compensation is a base salary, and then she gets paid a bonus every time somebody comes into the organization and another bonus whenever they're here for six months.
Having someone focused on bringing in new talent constantly does two things. Number one, it doesn't let me get comfortable with complacency because I have a resource that's constantly bringing me new people to interview. So, if I've got someone that's been here two years and they're starting to drop the ball or get lazy, I can get them off the bus because I have a new bench of people that are ready to come in. The team feels that, and it keeps their production level high because they know that a constant flow of first and second-year associates are banging on the door to come take their jobs. We've kind of adopted that management consulting environment mentality, where it's kind of like up or out, and that's been instrumental to our growth and success as well.
Enhancing Recruitment Processes with AI Technology
Lydia: We spoke about implementing technologies and keeping that foundation clear in terms of processes and making sure your company is able to scale now in terms of using AI in recruitment technologies.
What has your experience been like with that so far? Have you really invested in that?
Jeremy: Yes, great question. We utilize just standard ChatGPT to help write job descriptions, develop lists of source companies, and clean up data. I think it does a great job with regard to data cleansing. Then, of course, we still need critical thinkers to help prompt the AI bots because they can't just completely take over the creation of standards, operating procedures, workflow rules, and things of that nature. But we utilize that type of AI function very successfully, especially for training resources. However, whenever we've tried to utilize AI and third-party vendors from a lead generation standpoint that implement drip marketing campaigns and LinkedIn marketing campaigns, we've never really had success, and it's actually hurt our brand.
There's an old adage that you could take 20 years to build a great reputation in business, but it can only take five minutes to destroy it. So, I think by completely outsourcing it to a bot, you're exposing yourself to some real damage, especially if your eyes aren't being put on the content before it's going to your prospects or even customers.
I would say that we've had some success with it. I'm obviously continuing to educate myself on new tools, systems, and resources that are coming out because I do think that it's going to completely transform the professional services arena. When I say that, I'm talking about law firms, CPA firms, and environments where we've really relied on people putting their eyes on documents from a manual standpoint. Well, now we can get those attorneys 90% of the way by utilizing Artificial Intelligence. We're going to see a mass exodus from those third-party professional services firms as they become more efficient and start being really more cost-effective for their clients because their cost of labor can be essentially compressed.
Lydia: In terms of using data and analytics to inform your lead generation or your outbound efforts, or even getting the right candidate through the door, has there been any kind of advantage that you found in using technologies?
Jeremy: Yes. I mean, we use just standard email automation tools and social media drip marketing automation tools, but what we found since we work on a contingency basis as direct hire recruiters, our competitive advantage is not necessarily an automated technology. It's really good old-fashioned picking up the phone, cold calling, cold emailing, and cold text messaging. I think that's really what separates strong salespeople today, the desire and fearlessness to go in cold as opposed to relying on an email or a text message from an automated standpoint.
From an automation perspective, you can send out 10,000 emails in an hour, but you might only get a 0.1% response rate. But if I text message you, "Hey, Lydia, I saw the podcast that you did with Jeremy yesterday afternoon. I thought that what you said about this really resonated with me. Would you be interested in taking a five-minute phone call?" That's probably going to have an 80 to 90% response rate because it's timely, it's relevant, and it's bespoke. You, as a recipient, know that it's not automated. That's really what we're seeing, the leads convert through the funnel groups.
Respect Responses, Whether Positive or Negative
Lydia: Jeremy, what advice would you give someone who's starting out in recruitment or even in headhunting today as the bulk of your career is in this field? What it takes to build a whole organization around it and make it sustainable to a certain point. The ingredients to being successful as a recruiter. So, what advice would you give someone who's starting out in recruitment today?
Jeremy: Sure, the main thing that I'll say is don't be scared to cold call, cold email, or cold text message. Sure, you're going to piss a lot of people off, but at the end of the day, those individuals never would have been interested anyway. I think that's really what's separating individuals in the direct hire recruitment space today—those who are willing to go in cold, be fearless, aggressive, and persistent. Try to reach them at 10 a.m. If they don't answer, call them at 11. If they don't answer, call them at 12. You don't know if you're going to get them at 7 a.m. before their assistant gets there to screen you out, or at noon when they might be working from lunch or their desk line might forward to their cell phone. Don't be afraid to call their cell.
I think that's really what's going to elevate us in our careers as headhunters, that fearlessness. It's funny when I started my first business in 2010, it was an email marketing business called Market Share Solutions, and we were seeing open rates in excess of 80%, and reply rates in excess of 25-30%. Now, open rates and reply rates are sub-1% because we're bombarded with emails constantly. Now, we're getting bombarded with Instagram messages, Facebook messages, and LinkedIn messages. It's almost more exciting to get a piece of mail in the mailbox. We're like, "Oh, a handwritten note. Let me open this. What's this about?" It's about creating that bespoke experience for that recipient so they know it's not a mass message and that you have something timely and relevant to share. Even if it's a no, they're going to respect you and might give you a referral or competitor.
Lydia: That's interesting that you talked about not being afraid to reach out to people. That takes a lot of your personality to really go out there. We're living in an increasingly digital world and obviously, a lot of our first interactions with people might be through text messages, and there's that kind of barrier. What are your thoughts on that?
We're seeing digital-native generations coming into the workforce, and they're going to face all these challenges. What's the kind of mindset that they should have to overcome these fears or apprehensions?
Jeremy: Yes, absolutely. I think that we are in a digital world and if you think that it's just a phase or that social marketing is not important, then I think you're living under a rock. One of the things that I really believe in from a content marketing standpoint is having good-quality content. I don't really care about the likes and shares on Instagram or LinkedIn because I need a curated professional landing page for when somebody wants more information. They can see, "Hey, this guy's a professional. He's a subject matter expert,” or, “He's a leader in his field." That increases that landing page visit to conversion by 10x or 20x because of the quality of the content, whether there are 11 likes or 1,100 likes.
So, that's the first thing that I'll say. But regarding the digital component, I think it's important for us to recognize that we should constantly keep our name out there from a demand generation standpoint because, by the time individuals inquire, they've almost educated themselves to the point where they're ready to buy. That sales cycle time is compressed now that we have more digital marketing resources.
To answer your question, I think it's important to recognize that selling isn't really sales if you truly believe in your product or service and that you can solve the customer's pain. If I know that you're a CPA working at a firm that makes you work nights and weekends, and I saw on your social media that you just had a baby four months ago, that's going to be my sticking point. I might say, "Hey, look, I saw you just had a baby. I know that your firm makes you work nights and weekends. The firm that I'm recruiting for doesn't make you work nights and weekends. You might have to take a 20% pay cut, but are you interested?" She may say, "Absolutely, I'm interested."
So, it's important to understand the market, understand the why behind the what, and still utilize that digital media for competitive insight but tailor your pitch based on the information that you gathered. That's important.
Lydia: Thank you very much, Jeremy, for your time and the brilliant insights. You've been so generous.
So, drop us your contact details and where the audience can connect with you if they want to take up a conversation.
Jeremy: Absolutely. So LinkedIn, I'm logged in all day. It's been a resource that I've helped grow my business over the last 15 years. It's just my name, Jeremy Jenson, and there's a little goat emoji. We did a campaign about five years ago in the Houston Business Journal that was a hit, and the campaign was called, "Hire the goat to find your unicorn." So, if you find Jeremy Jensen, CEO at Encore Search Partners, and you shoot me a DM, I'll be happy to respond to you and at least give you some insight.
Lydia: Great. Thanks again, Jeremy.
We have been in conversation with Jeremy Jenson, CEO of Encore Search Partners. Thank you for joining us, and remember to subscribe and stay tuned for more weekly episodes from All-In Recruitment.
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