The Peak Sales Recruiting Story

Peak Sales RecruitingBack in 2006, I often heard the question, how the heck did you get into the recruiting business? I didn’t know what the question meant.

Over the course of 2005 and 2006 I had been helping several companies build their sales through a combination of consulting and coaching. I got a chance to work with some promising start-ups such as Peel Wireless (acquired in 2007) as well as established non-tech companies, like Lundy Construction.

Some of the companies I worked with at the time, as well as many others, badly needed professional sales leadership and staff and I had several opportunities to join a company and run sales, but I saw a bigger opportunity. I knew that the percentage of reps at target on the average team was between 50-70% and the turnover was around 30% a year – high. The problem was even more acute in Ottawa, because of the city’s engineering base and roots (and by the way, those stats were mediocre, but they are worse today because of the economy). I figured I could help not just one company, but many companies, by providing services to help them hire the right people.

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My original approach to solving the sales talent problem was a sales-focused online job board and recruiting service. Provide better access to the right people. I pulled together a team of developers and we built an alpha site. Meanwhile I was continuing to research how companies hire sales and realized that the problem wasn’t simply access. There was also a selection challenge. Many customers didn’t understand their own selling environment and what unique set of traits were required for a sales rep to come in and be successful. High performers in one company or sector are a lot different than those in another. Products and services don’t sell themselves. If you don’t know exactly what you are looking for, you can’t hire great people.

From previous experience engaging recruiters and being fundamentally frustrated with the experience, I knew the traditional recruiting business was flawed. In my experience, recruiters didn’t understand my business or the roles I was trying to fill, so I never felt they had a clue what I was looking for, nor that they were all that interested in growing my business. They seemed more interested in throwing me a pile of resumes of people they already knew in hopes I would hire one.

Are recruiters to blame? I had employed the recruiters on a contingency basis. It seemed like a great deal: Find me a hire and I pay the fee. Pay for performance. Recruiter bears all the costs and the risks, and if I change my mind halfway through, it cost me nothing. Given that they were working for free with no guarantee of success and no exclusivity, how could they possibly afford to put a lot of time into my hire?
Several friends of mine had successfully run recruiting and search companies and I knew the standard approach was to get as many reqs (hiring projects) as possible and then throw resumes at them all and hope a few turn out to be hires.

The flaw is that there is no real partnership with the client and no incentive to dig deep into the client’s business. My plan was to offer aggressive headhunting (vs database searching) with a heavy bent on thoroughly assessing the role and the candidate. Our projects would involve behavioral testing, skill testing, interviews, role plays, and rigorous background checks. As part of our service, the client would receive “consulting” to understand what they really needed and how the new hires were going to come in and generate sales. The goal is to sell and generate revenues for our clients not fill seats.

By June 2006, I was up and running as Peak Sales Recruiting, my third start-up. Shortly thereafter I hired a support team, and immediately had recruiting contracts with some well known companies.
The first projects weren’t pretty. Although I had some good coaching from my recruiter friends on how to headhunt, my team was simultaneously hunting for candidates while figuring out the best screening techniques.

By the fall, I hooked up with Brent Thomson who I had known from other lives. He was a senior manager at Borland Software and was exploring opportunities to exit and get involved in a start-up. His extensive sales and management experience in both early stage and large publicly traded companies was a great compliment to my start-up and business development experience. We both shared a vision for how we could grow Peak beyond Ottawa and into a company with a US and Canadian footprint. He became a full partner by the end of the year and he infused a massive amount of new insight, energy, and contacts into our business and it paid dividends in 2007.

The next year we experience great growth, hitting 7 figure revenues very quickly. We killed it. We became well known in Ottawa and Toronto and grabbed hiring projects by the dozen. We had proven that companies needed great talent and would pay to get help finding and selecting it. By the end of the year, had opened sales offices in major cities across the US and Canada and were traveling across the country and closing projects as large as 30 hires per month.

While we were growing so fast, finding the right people to join our own company was a real issue. The recruiting business does not have the best reputation so it is not the first choice for a lot of otherwise qualified people. Even though we were an exciting growth story, savvy marketing was required to get to the right people and overcome their hesitancy to join. Add this to the fact that all of our recruiters were maxed out on projects and it is an understatement to say we had challenges staffing our own company.

During 2007 and 2008, we were competing with either large national companies that did not have a strong understanding of the sales domain or we were up against freelance recruiters that could not work as fast as we could or take on large projects. We were able to leverage some key differentiators to win business. We were able to quickly target high performers that fit a particular client’s needs, we could save the client time in only seeing quality people, and our hires were virtually guaranteed to outperform their peers because they had been thoroughly screened and tested.

While we started out with a contingency model to mitigate risk for the client, now most of our projects were retained, which meant we were turning away a lot of clients that couldn’t let go of the traditional contingency model.

When the economy slowed in 2009, our volume was still climbing, in part because companies needed their sales operations to produce well in the deteriorating economy. Eventually the pace did slow down and we used the opportunity to streamline our operations and outsource some aspects of the recruiting process. The result was an ability to be very aggressive on price without sacrificing quality or profits.

Looking back over the last few years now I start to understand why people asked me about how I got into the recruiting business. It is a truly zany business. I laugh about some of the characters we have met. Pathological liars, people who are selling way past their due date, and folks that should be in a profession other than sales. We have fixed many sales departments that were broken and needed a rigorous hiring process, a strong supply of talent and effective on-boarding process. We have also got to meet many highly accomplished, ambitious, and skilled sales professionals. It has been a real treat.

The recruiting business is cyclical. When the economy is rolling, there is a dogfight for talent and healthy budgets are allocated to recruiting, but when the economy slows, everything gets cut. Even though there is a higher emphasis on getting great sales people, many companies want to perform their recruiting in-house, while others have limited budget to spend on recruiting and seek the lowest cost, risk model. With virtually non-existent, barriers to entry most recruiters are happy to take on whatever work they can get at whatever terms they can.

In the midst of all this, I am very excited about how the recruiting business is being changed by the Internet and the rise of social media. Peak is now almost four years old and going strong. We have a great team of trained sales experts and recruiters that sincerely care about growing our client’s business and I see nothing but opportunity. I expect 2010 to be another great year for Peak.

Peak Sales Recruiting

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