6 Figures in 12 Months! How to Free Yourself from Wage Slavery

[Iwokeup]

I'd like to give back to the community in the form of an executable business idea that I have personally been a part of and watched grow. This was my first encounter with entrepreneurship and I was witness to the success and failures.

This is NOT a Fastlane idea but it could become that. Rather, it is here for anyone to execute (very well!) and free themselves from having to answer to a boss. This could then become your springboard to (relatively passive) income for other ventures in life.

Disclaimer: I have absolutely no interest in this idea but I have seen it implemented and used to generate a six figure income in under a year. YMMV.

Idea: Open your own recruiting firm

The Need: companies all over the US (and I'm sure in other countries) have a desperate need for well-qualified rockstar employees. Most of what employers have to sort through is low quality or not exactly what they need. This isn't true in all industries but if you've ever watched "Dirty Jobs" with Mike Rowe, or worked in a non-tech industry then you know that the need exists.

The Model: Your company is the Golden Child middleman bringing solid to rockstar employees to employers for a fee (depending on the industry, anywhere from 15% to 20% of the first year's salary, including signing bonuses). You guarantee to the employer that your finds will be well vetted, the right fit, and will make them money over the life of the hire (cost savings to the employer from reduced search time, reduced downtime/make do work while finding the employee, which translates into money saved).

Edit: Thanks to @miked_d for another angle:

If your niche supports it, such as IT, you can offer short term contract work to employers for a premium, and if they work out then you can also charge a percentage of the annual salary if permanently hired.

Your VALUE PROPOSITION:

* I will save you time and $ on the search process
* My candidates will, if hired, prove to be assets and not liabilities to the team
* I can provide high quality short term employees as needed (industry-specific)
* I will provide a six month employer satisfaction guarantee with my candidate if hired.
* My staff is well trained, customer (both candidate and employer) oriented, and knowledgeable. No crap submissions (You would not believe how much most recruiting firms suck!)

The Challenges:

* Information withholding: you will have to source candidates without telling them where the job is. This can be problematic and if they find out where your job is, you're out of luck.

* You don't get paid until people get placed. Unless you can figure out a model where people pay you to place their resumes. Will need several months of salary once you get beyond being a one-person shop.

* Lead generation is your most important activity. Cold calling, cold email, web generation, paid search, etc. Can get expensive.

* Excellent cold callers/recruiters. Trust me, the vast majority of the people in this industry are just plain stupid or ignorant. If you want to be seriously successful, you're going to have to recruit rockstars and pay them accordingly (FYI, I was excellent at this and know what I'm talking about. Met lots of my colleagues...eh).

* Challenges from Monster.com, et. al.

The Path to Victory: Be EXCELLENT (underpromise, overdeliver). Provide OUTSTANDING, NO QUESTIONS ASKED customer service. Be ethical. Place the needs of the candidate AND the employer above your own and you WILL rock. Seriously.

Niche: Pharmaceutical industry
- Drug companies
- CTOs (clinical trial organizations - they run the Phase Trials to enable drug development)
- Medical practices that participate in clinical trials (often need Project Coordinators (RNs) to run the study)

Niche: Technology (web developers, coders, etc)

Niche: Mechanics (or any skilled tradesman)

Open to any and all questions.

 

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[Contrarian]

Yep, Iwokeup. Been a recruiter for most of my career. I don't like a recruiting firm as a fastlane idea these days because it's so competitive and commoditised, and it's an extremely hard business to scale and manage effectively as it's so hard to hire and keep good recruiters. If they leave most of their clients walk right out the door with them, and even a half-competent recruiter will get a job offer anywhere he feels like. That's if they even perform in the first place. And asset value requires a stable long-term client base...but big companies usually make awful clients for any sophisticated recruiting firm.

However, the UK recruitment market is the most competitive and commoditised in the world. YMMV in other markets. I get nowhere near as much price pressure dealing in the USA, Canada or Germany as I do here.

But, yeah, as a way to trade money for time on a high value basis to build capital...absolutely. I was going to launch a SaaS business but after looking into it thoroughly, at the moment it's far too expensive and with too much against me as I have next to no money. As soon as I have the cash to quit my job I'm going to do exactly this, because, like you say, you can make well over 100k a year and you can run a one man recruiting firm with overheads of less than £100 a month if you want to. I did it for a very short period between jobs (had no cashflow) and these were my expenses:

£25/month - Vonage VOIP phone with free international calls. A lot cheaper if you don't need to call internationally.
£25/month - virtual office address in central London
£7/month - Outlook 365 subscription
£7 - company logo from LogoGarden
£15 - Ltd company registration

£79 expenditure, £8500 income for one month's work when I eventually got paid long after I needed to get another job because the cash ran out.

It's a far harder job to do well than people generally realise, but an excellent grounding for entrepreneurial skills IMO. Personally I'm going to use it as a test base to nail social media marketing, content writing etc for future endeavours too.

 

[RoadTrip]

There's already a fierce competition in my country for this type of service.

Here is something I've thought about in the past. Instead of charging the employers 15-20%, do you think there would be a way to charge the candidate as well? The candidate would only pay once they get a job?

For some reason I thought of how recruiting is kind of similar to real estate brokers, who are pretty much a middleman to the transaction. There are both buyers agents and sellers agents in a real estate deal, but in a hiring deal there are not two sides. In a real estate deal, the commission gets split between the buyer and seller agents.

I had a hard time trusting a recruiter before, because they got paid when I got placed, so I felt they would just try to jam me in somewhere to get their cut. I was trying to think of ways that there could be valid two party representation, without it feeling like a conflict of interest. I thought that maybe splitting the fee between the company and the employee could work, so the employee would pay like 5% and the company would pay 10%?

Just a random idea, it might not have any merit. Thoughts?

I would not pay a recruiter to find a job for me. I would be really desperate if I would pay a recruiter, meaning that I can't find a job after a long time of searching. And precisely these type of candidates are not attractive for recruiters.

Actually, the hardest part of this job is not so much finding the open positions, rather finding the right candidates. And that's where good recruiters set themselves apart from the competition: by building good relationships with the candidates, timely responses and updates, etc. So that the candidate will recommend this particular recruiter to friends or colleagues. That's when you are one step ahead of the competition.

I know, because I've talked to plenty recruiters and can definitely tell the difference.

 

[Contrarian]

Great thread. Glad @Contrarian chimed in. I knew I'd seen someone with good recruiter experience introduced themselves a while back and just couldn't remember who.

I'll add the perspective of a contractor.

I was an IT contractor in the UK and Ireland from about 2000 to 2009. I didn't realise they made up to 30% margin, I thought it was about 20%. Regardless, my daily rate was £400/day back in 2000 in my first contract. Us contractors always wondered how much the agencies were making, and figured they'd only need to place and keep 4-5 contractors going to be on the same daily rate as us. Anything after that would be gravy.

As a contractor, I was never out of work, but always looking to see what contracts were out there (especially when a contract was due for renewal). www.jobserve.co.uk was my friend. I don't know if it's still going now.

I guess search terms such as "contract oracle dba roles london" would be pretty popular for guys still doing what I did. Just replace "oracle dba" with the type of job and you'll probably get your ads in front of all the contractors and people looking to go contracting.

Rockstar employees probably aren't searching around because they are already employed. They probably need head-hunted for a new role.

Contractors are probably looking every week to keep their finger on the pulse. Even just to see what is happening with rates and what versions or flavours of software are most in demand.


There are only two things a decent contractor wants out of their agent:

1. They pay the invoices on time, without being chased.
2. They are *already* negotiating a contract extension at least a month before it's due to end (ideally without being reminded)

If they can bring a new contract when the old one finishes then great, but in nearly 10 years contracting I never got my next contract through the same agent. It could be that they automatically exclude you from the running for any new contracts since they don't want you to leave your current one, and by the time you do leave, well, you've already arranged to start another the following Monday.


What struck me was that I could count on one hand the actual agents that I had any respect for. Most were extremely young and probably really poorly paid. They would have had to be working for one of the big preferred agencies that one of the big businesses used, and that's all they had going for them.

The best agent I met gave great interview tips in general, and primed you for the client interview.

I'll add some more thoughts when they arise... just thought I'd add my 2c. I see there being a fastlane in the likes of building a marketplace, or a site like www.jobserve.co.uk where all the contractors (used to?) hang out.

Too right. You'd be amazed at some of the conversations that go on behind closed doors in these wideboy-filled churn and burn recruiting firms.

Like the training session we had on "How to lull candidates into a false sense of security", making them trust you so that you can mine them for information on where they're interviewing so you can use that against them and put better candidates into play.

Or the guy whose candidate said he had an interview with TOTAL at a certain time, and also that he would really love to work for Shell above anything else. So he went back to the candidate and said he had an interview for him with Shell, and the only time they could do was when he had the interview with TOTAL. So he cancels the interview with TOTAL and the recruiter goes and fills it with someone else. The interview with Shell was fictional all along.

Or the guy who was working in a phone shop two months beforehand, who lost an outraged client who cancelled the contract when he found out he was making 53% margin on a Java developer.

Or the training session on posting fake jobs to attract candidates.

I could fill volumes...

Yeah, not that hard to stand out.

 

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[miked_d]

Recruiters are a major part of hiring in the IT industry.

You missed one very lucrative angle. Providing contract workers to companies. Many companies need a position filled for a short time. These companies pay the recruiter directly. I believe the average markup is 30%.

 

[Contrarian]

Here is something I've thought about in the past. Instead of charging the employers 15-20%, do you think there would be a way to charge the candidate as well? The candidate would only pay once they get a job?

For some reason I thought of how recruiting is kind of similar to real estate brokers, who are pretty much a middleman to the transaction. There are both buyers agents and sellers agents in a real estate deal, but in a hiring deal there are not two sides. In a real estate deal, the commission gets split between the buyer and seller agents.

I had a hard time trusting a recruiter before, because they got paid when I got placed, so I felt they would just try to jam me in somewhere to get their cut. I was trying to think of ways that there could be valid two party representation, without it feeling like a conflict of interest. I thought that maybe splitting the fee between the company and the employee could work, so the employee would pay like 5% and the company would pay 10%?

Just a random idea, it might not have any merit. Thoughts?

Applicant Paid Fee is actually how the industry got started all those years ago.

In the UK it's illegal for a recruitment agency to charge candidates for the service, not sure about elsewhere. There are merits to charging candidates for the service in certain circumstances I think (if you're working on their behalf to find them a position, rather than the other way around). But, if anything, charging BOTH sides at the same time would create a massive conflict of interest. The client is paying you to deliver the best candidates. You can't do that if you're limited to the few that would agree to pay you to place them.

There are companies (like InterExec) that act as "talent agents" for executive candidates, scouting out opportunities for them on a continual basis and who charge the candidate instead of the company. Might be one to look at if you like that business model.

 

[Iwokeup]

Another Fastlaner asked the following question:

I like your recruiting firm idea. My problem though would be where to start. I believe that is my problem with everything. I don't like hand holding or want steps. Where would you start first?

So another plug for "Ready. Fire. Aim." In the book, Masterson recommends calling different people in your target industry and telling them that you're a student doing research (which is true). Ask to interview HR folks and ask,

"What are your biggest challenges?"
"What does the modern workforce look like and how is that impacting what type of candidate you're seeing?"
"What are the challenges looming in the future?"

Trade shows.
Trade magazines.
Cold calling the employers in your target niche.
Google adwords: what are the biggest advertisers when searching for, say, "Clinical Trial Coordinator Jobs"?
Go on Monster, indeed.com, etc and see who's posting jobs for the above, and contact them directly

AS for candidates:

- lists any way that you can get a handle on them
- set up a landing page with an opt-in for emails targeted to your niche
- Paid search
- Friends, family, networks.
.
.
.
So. Who's going to take action on this?

 

[Contrarian]

Thank you for your very thoughtful and excellent response to my thread. I agree with you that it would be a very difficult business to scale; however I think that it would provide an excellent foundational opportunity for any young bucks out there. It would have it all (lead generation, sales, cold calling, marketing, team management, building excellent B2B relationships, etc).

As far as the cash outlay: you've hit the nail right on the head.

FYI, the person that I know who started their business lived on a SHOESTRING for three months before the first payment came in. But so what? The rewards were life changing.

To all those reading and lurking:

Why haven't you started today?
What's your excuse?

Approximately $120/79 pounds per month and you're on your way.

This. I'd also add, depending on your market, it's a (timezones aside) location independent business model. I'm going to set up a Hong Kong Ltd company, virtual office, HK phone numbers etc (hell you can get a bunch of "offices" around the world and have them all redirect to your phone if you really want), and live in Thailand to set mine up. So in that scenario you can place people in Australia, Singapore, HK, Malaysia etc...make five figures per placement, live very well on under $1000 a month, pay zero tax other than what you need to draw out of the company to live on (maybe not if you have to deal with a tyrannical IRS) and build serious capital.

I can't see any logical downsides to this plan, or any more straightforward way to get some net worth quickly.

 

[Iwokeup]

Well, now we have a business model, 3 books to get you started, two former recruiters (myself and @Contrarian), at least two former contract employees, and a marketer familiar with the space (@Djs87 )offering to give advice. And we know that the cost to get started isn't very expensive.

So the question now becomes: what are you going to do with this information? Who among you is going to take action?

 

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[Contrarian]

I've a question...

It's a two sided market.

If you were to choose which side to focus on getting, which would it be... the job vacancies, or the people looking for work (or rockstars who could be convinced to move)?

There's various ways to skin a cat. And to some degree it depends on the market. But I've set up new desks from scratch several times over the years, and by far the quickest way to gain traction quickly is by looking for the rockstars first. If you're dealing in the senior end of the market, the rockstars will be your clients too one day. Good markets for search are where candidates are in short supply and high demand. If you find one of those this will work.

What I did that worked best:

1) Gather a minimum of 100 potential candidate names, companies they work at, job titles & contact numbers (often just the switchboard of the company)
1a) Also gather a minimum of 100 hiring managers, in a separate spreadsheet - but we won't call those yet
2) Made loads of calls to the potential candidates, got their mobile numbers so I could contact them when they're not in the office. Did a general Q&A, explained I specialise in the market and use it as a fact finding and relationship building call. You have to do this well or they'll think you're just fishing for information and wasting their time.
3) Many of these will be open to specific moves, so if you get any relevant leads you can come back to them and explore in more detail. But you want to keep doing this until you find a marketable candidate, one that fits the criteria for actively working on to find them a position. The books I recommended explain this in more detail but put simply, just because someone is really good at what they do doesn't make them marketable, even if they are placeable.
4) Take the marketable candidate and sell them in to relevant companies far and wide over the phone. Secure them interviews, whether on an active position or on an exploratory basis.

Sometimes you will place them, and you have fee income then and there. Other times, you won't but you will build reputation for delivering great people (they have to actually be great or you'll discredit yourself). Either way, you can use this to get in the door with new clients, and then over time some of them will give you positions to work on. Over time you will find the model changes from one of primarily marketing candidates to one of filling jobs.

In my case, the marketable candidate I used first got several interviews through me but I never quite placed him. However, he gave me three senior management jobs and I filled them all either with candidates I had approached in the initial phase or through referrals from those candidates. £80k-ish fee income in month four from setup. It opened up all the doors that helped me build the business.

This is by no means the only way to build the business but it's definitely the fastest, and needs far less selling skill than hammering on clients' doors. Far easier to sell the tangible than the intangible.

 

[Iwokeup]

Actually, the hardest part of this job is not so much finding the open positions, rather finding the right candidates. And that's where good recruiters set themselves apart from the competition: by building good relationships with the candidates, timely responses and updates, etc. So that the candidate will recommend this particular recruiter to friends or colleagues. That's when you are one step ahead of the competition.

I know, because I've talked to plenty recruiters and can definitely tell the difference.

Well said!

As mentioned in my original post, if your recruiting firm builds a reputation for providing outstanding customer service, and ICK-style love for your employer clients and potential candidates, that will become rapidly evident to everyone. I promise. Your firm will stand out light a lighthouse beam in the storm.

This is because there are very few firms out there that do provide that level of service. I am aware of one that deals with executives and high level scientists and they have an outstanding reputation and can charge higher fees. But they've earned it.

 

[Iwokeup]

Yep, Iwokeup. Been a recruiter for most of my career. I don't like a recruiting firm as a fastlane idea these days because it's so competitive and commoditised, and it's an extremely hard business to scale and manage effectively as it's so hard to hire and keep good recruiters. If they leave most of their clients walk right out the door with them, and even a half-competent recruiter will get a job offer anywhere he feels like. That's if they even perform in the first place. And asset value requires a stable long-term client base...but big companies usually make awful clients for any sophisticated recruiting firm.

However, the UK recruitment market is the most competitive and commoditised in the world. YMMV in other markets. I get nowhere near as much price pressure dealing in the USA, Canada or Germany as I do here.

But, yeah, as a way to trade money for time on a high value basis to build capital...absolutely. I was going to launch a SaaS business but after looking into it thoroughly, at the moment it's far too expensive and with too much against me as I have next to no money. As soon as I have the cash to quit my job I'm going to do exactly this, because, like you say, you can make well over 100k a year and you can run a one man recruiting firm with overheads of less than £100 a month if you want to. I did it for a very short period between jobs (had no cashflow) and these were my expenses:

£25/month - Vonage VOIP phone with free international calls. A lot cheaper if you don't need to call internationally.
£25/month - virtual office address in central London
£7/month - Outlook 365 subscription
£7 - company logo from LogoGarden
£15 - Ltd company registration

£79 expenditure, £8500 income for one month's work when I eventually got paid long after I needed to get another job because the cash ran out.

It's a far harder job to do well than people generally realise, but an excellent grounding for entrepreneurial skills IMO. Personally I'm going to use it as a test base to nail social media marketing, content writing etc for future endeavours too.

Thank you for your very thoughtful and excellent response to my thread. I agree with you that it would be a very difficult business to scale; however I think that it would provide an excellent foundational opportunity for any young bucks out there. It would have it all (lead generation, sales, cold calling, marketing, team management, building excellent B2B relationships, etc).

As far as the cash outlay: you've hit the nail right on the head.

FYI, the person that I know who started their business lived on a SHOESTRING for three months before the first payment came in. But so what? The rewards were life changing.

To all those reading and lurking:

Why haven't you started today?
What's your excuse?

Approximately $120/79 pounds per month and you're on your way.

 

[Iwokeup]

Why would a pharmaceutical company hire you rather than put an ad on a newspaper and find a candidate ? Added value ....again,it takes time/ money to establish that and know the needs of every industry.

Because you deliver. That's why. The person whom I watched succeed...did it through grit, gumption, and asking for a chance to deliver good candidates. Guess what? She did it, over and over and over again. After six months (not so long, really) she had the various companies calling her to see if she could help them out.

Remember: when all is said and done, at the end of the day you are (as @throttleforward would tell you), still selling human being to human being. Make that HR person look like a star by finding them a star and good things will happen. You just gotta be tough and believe.

 

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[Iwokeup]

Here is another question: what would you do if you got a really good candidate but had no place for them to go? How would you go about finding companies who need people for the types of position your candidate would fill?

Sorry that I missed this earlier.

What I would do is to make a good faith effort to look into which companies would be a best match for them. Perhaps call up a new employer and see if there's a need. If not then thank them for their time and ask for other needs.

Always be honest with the candidate and tell them why there is no spot just yet but you will keep looking for them.

Then follow up every so often. How are you? Have any new information or skills?

Treat them like they matter and good will come to you.

 

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[WorldImperator]

In some countries there are too many companies like that. For example in Poland, few years ago we had boom in that industry, and, indeed, many people with enterprenership mind did this. Some became big players, others were big but went down. There are everywhere the same people, just moving between companies and going to higher levels and new just after their graduating. And still new are opening. There was just some time in Poland, where all people were talking like "do you have some money? open the recruit agency".


Point is, the market in my country is overcrowded. I mean, they are so desparate now, that they are often not even calling for you to offer you an interview, but to ask whether you know somebody. Adding you to friend on linkedin and other portals like that. There are too many consultants and many of them are unprofessional, offering you something completely not suited (eg. completely different branch from yours), but I know some competent as well.

I don't know situation in US, but in Poland that would be very very stupid, unless you would take with you higly experienced people and you know really huge amount of directors to inform them about your new company.

The situation is even more silly, because we have one very higly dominating job portal (not recruiting firm, but a site that is listing offers from recruiting companies) and literally each other site like this is looking extremely poor, but, they are existing somehow. That dominating site has offers mainly for corporations for new and mid to high level managers, but due to their absolute dominancy, there are lots of smaller companies as well, but, you will not find there local shop looking for a cashier.

There are also offers listed on the recruiting agencies websites, but often they are expired and are extremely hard to navigate and poorly managed.

The thing is, they are so desperate, that they started to advertising themselves in the most expensive TV time availabe (I mean those recruting agencies and other sites with job offers, other than that dominating one).

So, as a final word, I don't know situation for US, but at least I can share what is on another market.

 

[Contrarian]

May I take the opportunity to add, if anyone does decide to act on Iwokeup's information, these three books are invaluable:

Search and Placement! A Handbook for Success - Larry Nobles
Real Recruiting! Winning Search Strategies - Steve Finkel
Breakthrough! Exploding the Production of Experienced Recruiters - Steve Finkel

These three books are the combined bible of mastering the phone-based aspects of the business (which is most of it). Knowing and doing are totally separate things, but the vast majority of recruiters never read a damn thing in the first place. Get a headstart right there.

 

[Iwokeup]

May I take the opportunity to add, if anyone does decide to act on Iwokeup's information, these three books are invaluable:

Search and Placement! A Handbook for Success - Larry Nobles
Real Recruiting! Winning Search Strategies - Steve Finkel
Breakthrough! Exploding the Production of Experienced Recruiters - Steve Finkel

These three books are the combined bible of mastering the phone-based aspects of the business (which is most of it). Knowing and doing are totally separate things, but the vast majority of recruiters never read a damn thing in the first place. Get a headstart right there.

Thank you for the resources. I wish that I had had them back when I was "slinging the crack rock." (Shout out to Biggie Smalls)

 

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[Djs87]

I work in the staffing and recruiting industry for a large Internet Marketing firm. I market for recruiters all day every day. If anyone is interested in actually doing something like this I'd be the one to ask about marketing it.

 

[Andy Black]

posting fake jobs to attract candidates

Ha! All us contractors knew you were just fishing for CVs!

 

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[Iwokeup]

I've thought about this idea many times, but the area I live in is so impacted with recruiters. If you are able to successfully start one, the payout is definitely sweet (I've seen 40% markup). I have pitched this idea to a few close friends, but they are reluctant to join me. I don't blame them because I've seen three small staffing agencies close down in my area the last 2 years. Great idea for a city that doesn't already have a staffing agency on every corner.

I doubt that those staffing agencies provided LEGENDARY customer service. Just because others have failed doesn't mean that you would.

 

[Contrarian]

So, do you recommend focusing solely on the high-paid senior types of positions?

I have more personal career experience working in entry to mid level analytics positions with some management experience, so if I did something like this I would probably focus on rock star college students in business schools who are graduating soon, and then helping place them with good companies. I know that commissions would be smaller since they would be for entry level spots, so that is a downside. Also, entry level people wouldn't become my clients one day either.

Thoughts?

I've little experience working with junior positions, and companies do make a successful model out of that but you have to bear in mind the supply, demand and competition side of things. It's a lot easier for companies to recruit graduates directly than it is mid-senior level engineers. Increasingly recruitment agencies are being cut out of the equation anyway, what with technology being able to replace the middleman in many cases, in-house recruitment teams, etc. It's a lot harder to make a living out of than it used to be, and some parts of the industry are more heavily affected than others.

There are a few prominent graduate recruitment companies in the UK, but they tend to focus on sales & recruitment jobs, and the business model is a little more complex. They run assessment centres, where high potential candidates are selected to be put on the database. Then when they place someone, they put them on a residential sales training course, and training for a vocational sales qualification throughout their first year of employment, etc. I went through one of these out of school. The cost to the client will be pretty high because of the training costs etc. Pareto Law is an example of such a company.

I can't give you a definitive answer on this one because I don't have any real background in it. I'm cynical but biased.

 

[Deleted29854]

@tranquil43 Recruiter here. Late to the game on this thread but I noticed your comments and they jumped out at me. Want to help but have to be a bit blunt. (Quick aside, I often think about going into IT because its more straight forward with less hassle. We both suffer from lawn envy)

Sell what you know. Recruiting is three pillars; Sales, Knowledge/Skills of role, & Communication. You already have two of those, knowledge and communication. What better way to learn how to sell or polish your skills than talking about what you know.

Social media roles are bunch of low paying bullshit. (Social media is phenomenal for sales funnel for entres, brand awareness, etc but I've never seen a role looking to pay more than $35-40/hr so your max spread would be $15-18, maybe $20/HR). Companies had rev. streams before social media so its an after thought. Now, if you go into E-Comm (Sterling, Hybris, ATG) you are looking at rates of $100+/HR and that's where you make money. The higher you go into the operations/revenue stream, the less H1B competition you'll have and the less HR will be able to be a roadblock.

The whole business comes back to relationship value. What value do you add to the relationship. If you deliver real value, you'll always have a client. Your value point is your prior IT expertise so leverage that into revenue. Call every manager you've worked for and tell them the deal, I bet you'll get some hits.

Happy to answer any other questions you have.

 

[Glorydog]

Nice thought. Seems like a decent industry. I wouldn't be interested, but I can see where somebody here may be. Hopefully it'll help someone out.

 

[LibertyForMe]

Here is something I've thought about in the past. Instead of charging the employers 15-20%, do you think there would be a way to charge the candidate as well? The candidate would only pay once they get a job?

For some reason I thought of how recruiting is kind of similar to real estate brokers, who are pretty much a middleman to the transaction. There are both buyers agents and sellers agents in a real estate deal, but in a hiring deal there are not two sides. In a real estate deal, the commission gets split between the buyer and seller agents.

I had a hard time trusting a recruiter before, because they got paid when I got placed, so I felt they would just try to jam me in somewhere to get their cut. I was trying to think of ways that there could be valid two party representation, without it feeling like a conflict of interest. I thought that maybe splitting the fee between the company and the employee could work, so the employee would pay like 5% and the company would pay 10%?

Just a random idea, it might not have any merit. Thoughts?

 

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[PedroG]

This actually crossed my mind in the past. The last company I worked for ended up hiring only 1 out of 27 people they interviewed. So much wasted time and money on the interview process. We're talking hours of employees' time; employees who get paid six figures. It's so hard for companies to find good software people. That's been my experience. Most candidates are just not worth the time.

Another feature of a company like this would be personality-screening. Some companies will have you fill out a personality test to see if you would be a good fit. I've only had to do this once, but I thought it was a great idea.

 

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[Bila]

I'd like to give back to the community in the form of an executable business idea that I have personally been a part of and watched grow. This was my first encounter with entrepreneurship and I was witness to the success and failures.

This is NOT a Fastlane idea but it could become that. Rather, it is here for anyone to execute (very well!) and free themselves from having to answer to a boss. This could then become your springboard to (relatively passive) income for other ventures in life.

Disclaimer: I have absolutely no interest in this idea but I have seen it implemented and used to generate a six figure income in under a year. YMMV.

Idea: Open your own recruiting firm

The Need: companies all over the US (and I'm sure in other countries) have a desperate need for well-qualified rockstar employees. Most of what employers have to sort through is low quality or not exactly what they need. This isn't true in all industries but if you've ever watched "Dirty Jobs" with Mike Rowe, or worked in a non-tech industry then you know that the need exists.

The Model: Your company is the Golden Child middleman bringing solid to rockstar employees to employers for a fee (depending on the industry, anywhere from 15% to 20% of the first year's salary, including signing bonuses). You guarantee to the employer that your finds will be well vetted, the right fit, and will make them money over the life of the hire (cost savings to the employer from reduced search time, reduced downtime/make do work while finding the employee, which translates into money saved). Your VALUE PROPOSITION:

* I will save you time and $ on the search process
* My candidates will, if hired, prove to be assets and not liabilities to the team
* I will provide a six month employer satisfaction guarantee with my candidate if hired.
* My staff is well trained, customer (both candidate and employer) oriented, and knowledgeable. No crap submissions (You would not believe how much most recruiting firms suck!)

The Challenges:

* Information withholding: you will have to source candidates without telling them where the job is. This can be problematic and if they find out where your job is, you're out of luck.

* You don't get paid until people get placed. Unless you can figure out a model where people pay you to place their resumes. Will need several months of salary once you get beyond being a one-person shop.

* Lead generation is your most important activity. Cold calling, cold email, web generation, paid search, etc. Can get expensive.

* Excellent cold callers/recruiters. Trust me, the vast majority of the people in this industry are just plain stupid or ignorant. If you want to be seriously successful, you're going to have to recruit rockstars and pay them accordingly (FYI, I was excellent at this and know what I'm talking about. Met lots of my colleagues...eh).

* Challenges from Monster.com, et. al.

The Path to Victory: Be EXCELLENT (underpromise, overdeliver). Provide OUTSTANDING, NO QUESTIONS ASKED customer service. Be ethical. Place the needs of the candidate AND the employer above your own and you WILL rock. Seriously.

Niche: Pharmaceutical industry
- Drug companies
- CTOs (clinical trial organizations - they run the Phase Trials to enable drug development)
- Medical practices that participate in clinical trials (often need Project Coordinators (RNs) to run the study)

Niche: Technology (web developers, coders, etc)

Niche: Mechanics (or any skilled tradesman)

Open to any and all questions.

I run an education centre, so i am basically the middleman between teachers and parents / clients ...same concept..... The concept is great on paper, i get paid while not perfoming the actual job and i get paid for one hour, the equivalent of work of several teachers ( i have 10 tutors, so i get paid 10 times / hour ) , i do think it's fastlane as you can scale ( open more branches ) you dont trade your time for money ( i am writing this but i still get paid as my tutors are working ) you have the element of control ...etc........BUT it has it's challenges as well so it's not as easy as it seems, and sorry to blow the bubble, but 6 figures in 12 months .........easier said than done, it's the kind of business that takes time to establish and be profitable in the first place, let alone 6 figures. here why :
- You need to find the qualified people that are willing to work for you knowing that they can do the same without you, so you really have to offer added value for them and establishing a name to your business is part of that, so they will know that having your name in their CV will be a huge plus.
- The operating cost as relatively high while establishing a name ( office space, office manager if you need one ..etc)
-Why would a pharmaceutical company hire you rather than put an ad on a newspaper and find a candidate ? Added value ....again,it takes time/ money to establish that and know the needs of every industry.

It's worth it in the long run, for me anyway, but it's not as easy as it might seem .
-

 

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[LibertyForMe]

Here is another question: what would you do if you got a really good candidate but had no place for them to go? How would you go about finding companies who need people for the types of position your candidate would fill?

 

[Iwokeup]

ou missed one very lucrative angle. Providing contract workers to companies. Many companies need a position filled for a short time. These companies pay the recruiter directly. I believe the average markup is 30%

Great angle! I have edited the original post to reflect your contribution, Sir. Thank you!

 

[Iwokeup]

I had a hard time trusting a recruiter before, because they got paid when I got placed, so I felt they would just try to jam me in somewhere to get their cut. I was trying to think of ways that there could be valid two party representation, without it feeling like a conflict of interest. I thought that maybe splitting the fee between the company and the employee could work, so the employee would pay like 5% and the company would pay 10%?

Just a random idea, it might not have any merit. Thoughts?

I agree. Trust is the key here.

I don't think that requiring potential candidates to split the fee makes sense. But I would consider offering them a guarantee as well: If the job doesn't turn out well and it's not due to malfeasance or non-performance, offering folks a guarantee that you'll work hard to find them another job might work.

 

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[Andy Black]

Great thread. Glad @Contrarian chimed in. I knew I'd seen someone with good recruiter experience introduced themselves a while back and just couldn't remember who.

I'll add the perspective of a contractor.

I was an IT contractor in the UK and Ireland from about 2000 to 2009. I didn't realise they made up to 30% margin, I thought it was about 20%. Regardless, my daily rate was £400/day back in 2000 in my first contract. Us contractors always wondered how much the agencies were making, and figured they'd only need to place and keep 4-5 contractors going to be on the same daily rate as us. Anything after that would be gravy.

As a contractor, I was never out of work, but always looking to see what contracts were out there (especially when a contract was due for renewal). www.jobserve.co.uk was my friend. I don't know if it's still going now.

I guess search terms such as "contract oracle dba roles london" would be pretty popular for guys still doing what I did. Just replace "oracle dba" with the type of job and you'll probably get your ads in front of all the contractors and people looking to go contracting.

Rockstar employees probably aren't searching around because they are already employed. They probably need head-hunted for a new role.

Contractors are probably looking every week to keep their finger on the pulse. Even just to see what is happening with rates and what versions or flavours of software are most in demand.


There are only two things a decent contractor wants out of their agent:

1. They pay the invoices on time, without being chased.
2. They are *already* negotiating a contract extension at least a month before it's due to end (ideally without being reminded)

If they can bring a new contract when the old one finishes then great, but in nearly 10 years contracting I never got my next contract through the same agent. It could be that they automatically exclude you from the running for any new contracts since they don't want you to leave your current one, and by the time you do leave, well, you've already arranged to start another the following Monday.


What struck me was that I could count on one hand the actual agents that I had any respect for. Most were extremely young and probably really poorly paid. They would have had to be working for one of the big preferred agencies that one of the big businesses used, and that's all they had going for them.

The best agent I met gave great interview tips in general, and primed you for the client interview.

I'll add some more thoughts when they arise... just thought I'd add my 2c. I see there being a fastlane in the likes of building a marketplace, or a site like www.jobserve.co.uk where all the contractors (used to?) hang out.