On this episode Josh talks with Nancy Slessenger from Vinehouse. They discuss some of the ways they have gone about recruitment that has yield a high success rate.
Nancy Slessenger started Vinehouse in 1995 in order to make it easier for entrepreteurs to manage their team and organization in a way that feels comfortable and fits in with their values.
Nancy has notched up over 20 years experience in the field of Performance Management. As a successful author she has written the book ‘Difficult People Made Easy’, on performance management, on dealing with difficult people at work (as well as at home) 17 tips booklets and writes a weekly blog ‘Grapevine’.
In today’s episode you’ll learn:
- Why is advertising better than headhunting?
- What are some expert tips for a successful hiring process?
- And ahat are most common mistakes?
- When you’re hiring somebody, what is the most important thing to hire for?
- How much does it cost to have a recruiter do a hiring process?
Narrator: Welcome to The Sustainable Business Radio Show podcast where you’ll learn not only how to create a sustainable business but you’ll also learn the secrets of creating extraordinary value within your business and your life. In The Sustainable Business, we focus on what it’s going to take for you to take your successful business and make it economically and personally successful. Your host, Josh Patrick, is going to help us through finding great thought leaders as well as providing insights he’s learned through his 40 years of owning, running, planning and thinking about what it takes to make a successful business sustainable.
Josh: Hey, this is Josh Patrick. You’re at The Sustainable Business podcast. My guest this morning is Nancy Slessenger from Vinehouse. I met Nancy at a Perry Marshall thing several months ago and her company had been talked about. They’re a recruiting firm, where they help place people in companies and is doing stuff really unusual. And I said, “Ah, this sounds like a great thing for a podcast episode” so I approached Nancy and I asked her. We went back and forth a bunch of times. We finally got her to be on the show and I’m very excited. Let’s bring Nancy in and we’ll start the conversation.
Hey, Nancy. How are you today?
Nancy: Hi. I’m very well. And good morning to you, Josh. How are you?
Josh: I’m great. Thanks so much for asking.
Here’s my first question, we start off here, is that your industry is referred sort of in a not nice manner as being headhunters.
Nancy: I know.
Josh: And you just told me you guys don’t headhunt, so what do you do?
Nancy: Well, we basically advertise all the posts that we’re looking for. We don’t go out and look for specific people and approach them, or sell them, or anything like that which is what I would normally think of as headhunters. We advertise.
Josh: Where do you advertise? Why is advertising better than actually going out and trying to get people to come to work for your clients?
Nancy: We advertise wherever our research says would be the best place to advertise for the particular post we’re looking for. The reason we advertise is because we want people who actually are looking for a job and who want to move to another job. What we don’t really want is people who love to be poached off our clients because if you poach someone, then the chances are that person my well get poached again by someone else. We have occasionally tried the poaching people route. We have never found it satisfactory in what we’re doing. I’m sure it does work for some people but it’s not the way we’re set up.
Josh: You know, often people say that you really don’t want to hire somebody unless they’re employed by somebody else but lots of times people are employed some place else and they happen to be looking for jobs, especially today, so that would make some sense.
How do you go about placing people? What makes you different than other firms besides the fact you don’t actually go out and look for folks?
Nancy: Well, we have a process that we honed over quite a few years now. We know that it’s got a 91% success rate. By that, what I mean is that, after placing a person, they are successful in that role for at least 12 months. Whereas, we know that, on average, the figures area really bad. If you look at how long they last or whether they’re successful in the post, it’s about 25% to 30%.
Josh: If they’re only successful 25% or 30% that doesn’t mean that recruiters are doing an especially good job?
Nancy: Well, that includes not just recruiters but also people just doing it themselves.
Josh: Oh, yeah, I would agree 100% with that. I mean, I tell the story a lot that I used to be in the food service and vending business and before we put our hiring system in place, we were successful about 35% of the time. After we put our system in place, we were successful about 85% of the time.
Nancy: Yep, good system.
Josh: What is your success rate with people that you place?
Josh: That’s incredible. Can you tell me what it is that you guys do and why is that so high?
Nancy: Well, the first thing we do is to spend quite a lot of time with our clients, finding out what they really need and what’s really important to them about that specific role. We go through that in— I’m sure it must be a little bit annoying sometimes for the clients because we go into such detail. We end up usually with about 50 to 70 different criteria, from the client. We then, spend a lot of time doing research on, “Does this person really exist? If they do, where are they? How much are you going to have to pay them? Where are you going to advertise?” All that kind of thing. What the demographics are. It’s quite a lot of work to find that out.
We then, devise an advertisement to attract that sort of person, not just hundreds of people but the particular type of person we’re looking for. Then, we take all those criteria that we’ve listed out and we work at how we’re going to test for each and every one of those. Now, that could either be a question or it could be an actual test the person’s going to have to do. We divide all those between our application form, our telephone interview and a final interview.
So then, when we advertise, people come back to us and we send them the application form. And at that stage, sometimes, less than 20% of them actually fill in the application form because basically they look at it and they can’t fill it in, or it’s just too much work, or they realize it’s not really the job they thought it was. You know, they just clicked on something they thought looked vaguely interesting. I think that happens a lot. It’s so easy, isn’t it, just to click on something and apply.
Josh: Yes. It’s really easy today to do that.
Nancy: Yeah. And, you know, you can’t blame people for that but we filter them out.
And then, we go through all the application forms. We go through all the answers. And you see there are between 10 and, I think, 16 is about the maximum number of questions we have on any one form. Those questions are not just vague tell-me-about-yourself questions. They’re all specifically related to what the individual actually needs to be able to do in the job or the kind of personality that we’re looking for.
We go through all those and we then identify if any of the candidates meet the criteria that we’ve agreed with our client. Now, quite often, we can go through 80 application forms before we find a candidate who actually meets those criteria. We’re working on one at the moment where a few, as in one in a hundred candidates actually meet all the criteria we’re looking for.
Josh: Wow. That’s like a needle in the haystack.
Nancy: Well, we’ve got a system that makes it easier than you think to do that. But it’s still time consuming.
So then, when we’ve identified those – at the moment, with that particular campaign, we’ve had 800 applicants. Actually, more than that, 900 and something. We’ve got six candidates who are close to the criteria that the client’s looking for. Those candidates will then get a telephone interview with us and that goes through further criteria that we can’t reveal on the application form.
Then, we’d expect about half the candidates, at that stage, to get through that part of it. And then, the last candidates will then go for a final interview with the client which we design and we go through with them. The client records that. We go through that whole interview to see whether we feel they’ve met the criteria or not. If they have met the criteria and the client’s happy with them, then they’ll offer them the job and we will then guarantee them for 12 months, from the start date. And if they don’t work out, we’ll replace them.
Josh: Wow. It sounds to me like you’re almost never replacing them though.
Nancy: Well, we did have one. Just about three weeks ago, she’d been in the job for 11 months and she was really great. They absolutely loved her but she can’t get any childcare. Her husband’s worked away a lot. He’s obviously also very senior. It’s a really great job. She loves it. They love her but it’s a childcare problem so we’re replacing her which is really sad but, you know, those things happen–
Josh: They do.
Nancy: –so yeah.
Josh: But it’s probably occasionally. It’s probably not every day.
Nancy: Oh, yeah. Well, it’s a 91% success rate. So yeah, it’s not every day.
Josh: Now, people often think that recruiters are really expensive.
Josh: The truth is most recruiters are really expensive but you just explained a tremendous amount of work that you guys do. Have you ever done any research into the cost of making a bad hire?
Nancy: We have. In fact, before we went into recruitment in a big way, as we do now, we used to have something called a difficult person calculator on our website. It was this little thing you filled in and it told you how much a particular difficult person was costing your organization or your business. And it was absolutely awful. We had one that was– I think it was 5.7 million pounds. This was not dollars – pounds.
Nancy: And we had another one that was 10 million pounds, so that’s what, $13,000 or something like that?
Josh: About $13 million.
Nancy: Yeah. Because the trouble is there are so many more costs than people realize. The 5.7 was a consultant surgeon in a hospital and he was a terrible bully. Nobody wanted to work for him so people were constantly leaving. The hospital couldn’t replace them. They had to replace them with agency staff who were much more expensive than employed staff. I stood there behind the client as he just pressed the button to work it out. After he put the figures in, and he’s like, “Yep, that’s about right. That is what it’s costing us.” And so, yeah. But even in a small business, you know, it’s very, very costly.
Josh: Yeah. I call those type of people brilliant jerks.
Nancy: [laughs] Yeah.
Josh: I’ve actually written a bunch of blog posts about brilliant jerks and done a couple of videos on why you want to keep the brilliant jerks out of your company.
Nancy: Well, I think the other thing, Josh, is that it’s not just the people who cost you an absolute fortune because it’s kind of obvious with those people. But it’s also, for example, if you have a really, really good salesperson and a sort of average salesperson, the difference in revenue between those people can be $100,000 a year, easily.
Josh: But often, that really good salesperson is a brilliant jerk and they cost you more than $100,000 in picking up the pieces that they leave behind.
Nancy: Well, by brilliant I mean one who is really good. I mean, one who, you know, gets the sales and is a really good person.
Josh: Oh, okay.
Nancy: Those people, if you look at their performance and compare it with just an average salesperson which some of our clients are able to—
Nancy: –and we’ve hired four salespeople for one of our clients. And, interestingly, the one who was on the borderline because he didn’t have industry-relevant experience turned out to be the best salesperson because he’s much better actually following the script and doing what he’s supposed to do.
Josh: That’s true a lot. I’ve gone through this a lot with clients of mine who are hiring people and they say, “I’ve got this person from this company that wants to go to work for us and in the same industry.” And I said, “Well, sometimes it works out but they often bring bad habits along with them.”
Nancy: Yeah, that can happen.
Josh: And if they’re not coachable and aren’t willing to learn your system, bringing somebody from the industry into your company is often not the best move.
And it depends very much on the job itself. You know, sometimes you want to bring in somebody who’s got lots of contacts. Sometimes, you actually don’t want to do that. Or you want somebody who is just going to follow the system. And a lot of our clients have kind of got that and, you know, that’s the way they tend to go very often.
Josh: When you’re hiring somebody – and this is my quiz because I actually have a strong opinion about this, what is the most important thing to hire for?
Nancy: I think it’s the personality – the personal profile of the person because if you’ve got the right person, very often, they can learn the things that they need to learn. If they have not got the right personality or the right values, then no matter how good they are, I think they are going to cause you problems. And we’ve seen that, more often than I’d like to say, you know, with clients who thought someone was going to be great. And then they just turned out not to be because they just didn’t have the right values or not the right personality.
Josh: I’m going to submit that that’s your secret sauce?
Nancy: Could be. It could be.
Josh: And, you know, this is— I’ve talked to lots and lots and lots of recruiters over the years, some who worked for clients, some I’ve just met along my travels. I’ve actually pushed them on that issue because I agree with you. I think that if you don’t match the company’s values, there’s no way you can be successful long term.
Josh: And by the way, those values are not always what I would consider great values because, you know, the values of a Salesforce or an Oracle, and that’s some place I would want to work.
Nancy: Absolutely, yeah.
Josh: But they’re still the values of the company, so if you’re not a hard charger who believes in win-lose, you’re not going to be successful at Oracle because that’s how they work.
Nancy: We have quite a few clients who have very clear— you know, really high moral standards on what they’re doing.
Nancy: And in the sales area, often, that manifests itself in they do not want people setting stuff that is inappropriate. They don’t want to take onboard clients who have bought stuff that then doesn’t work for them. One of the tests we have on our application form – and I’ll share this, a bit of secret sauce with you, is we say to a sales candidate, “It’s nearly the end of the week, you haven’t quite met your targets yet. This email has come in from this potential lead and it says, “Hi, blah, blah, blah.” And then, we say, “And here is the template for our ideal clients and here’s our non-ideal clients.” Now, in that email it’s quite clear the person is a non-ideal client. And so often the candidate will send an email saying, “Oh, great. Yeah, this looks like it’d be perfect for you. Can we set up a phone call?” I’ think, “No. This should be an email saying “Hi, Josh. Thank you for getting in touch. I’m so sorry but actually we don’t provide that service or this isn’t a good fit for you but let me send you some details for somewhere to go” or something like that. So many of them don’t do that.
Josh: Yeah. I would say that that’s the moral inappropriate way to respond. I mean, I have lots of clients who would say, “We have to sell to everybody because there’s not enough customers out there.” And my experience with that is that’s pure balderdash.
Nancy: Yeah, absolutely.
I think it costs you more in the end, doesn’t it, if you’re not listening?
Josh: Well, it does. If your company is set up and you’re doing it all one-off’s where you’re trying to make people who are not a good fit for your company happy with what you’re doing, you’re going to lose money on that customer.
Nancy: Well, we’ve learned that lesson over the years so we’re quite careful about who we work with. We had an inquiry, not that long ago, from someone and I said, “Well, what’s important to you about the person you want us to hire?” I won’t mention the industry. And he said, “Well, it can’t be a woman and it mustn’t not be between this age range, and it mustn’t be anyone with epilepsy, and it mustn’t be a Christian, or a Muslim, or–“ I think he mentioned some other religion as well. I was just astonished because not only is that completely immoral, it’s also completely illegal. And I said, “Well, I’m terribly sorry but we can’t work with you using those criteria. That’s it. Thank you very much.”
Josh: Are all your clients in the UK or do you work with people in the US as well?
Nancy: Actually, we have far more clients in the US than we do in the UK. We even took one on in Azerbaijan recently which is—
Josh: Oh, really?
Nancy: Yes. A totally new one for us so that was a first but that worked out very well [inaudible 00:15:33] that.
Josh: How do people find you?
Nancy: Well, it’s basically word of mouth. We get recommended through the people that we’ve worked with and that’s really how it tends to work. We’ve tried lots of advertising and stuff but the trouble is you only want to recruit someone at a very specific time and there’s no point in saying, “Oh, but there’s a half-price deal” because if you don’t need to recruit someone, you’re just not going to do it, are you?
Josh: Right. If you have an open job, you’re going to recruit for it. If you don’t, you don’t.
Nancy: Exactly, yes.
Josh: What salary range do you normally recruit to?
Nancy: Well, I mean, again, that can be anything. We’ve got some posts at the moment that’s 100,000 or above. And we’ve also got some that are way lower than that 30,000. I don’t know what the packages are and so on but we’ve done a whole range of different packages.
Josh: If you’re recruiting for $30,000, what would your fee be for that?
Nancy: Well, we basically charge the same for everyone. But if people are recruiting for a lower level that we sort of help them do parts of it themselves. Our basic fee is $15,000 for the whole package. And we have a way of filtering people and that we charge half of it upfront because if people are serious, they’re happy to do that.
Josh: That’s also pretty typical. I mean, I see most recruiters charging a pretty significant fee to put together the package to recruit people. My daughter actually works for a recruiting company that does C-Suite the million-dollar-plus people.
Nancy: Oh, yeah. Right.
Josh: The amount of work they do before they even start recruiting is unbelievable.
Nancy: Oh, yeah. Yeah, most of the work is upfront. And the better you do the work upfront, of course, the better the campaign goes.
Josh: If my job is $200,000, you charge me $15,000. And if my job is $30,000, you charge me $15,000?
Josh: That’s a bargain. I’m serious about that.
Nancy: Well, thank you.
Josh: I mean, typically, if you know how to hire and you’ve gone through the process— you know, I just hired a $30,000 job person for my office and I would never have thought of using a recruiter because there’s not enough in it for him. And, frankly, it wasn’t that hard to do.
Josh: But the truth is, most people don’t know how to hire. And if you’re not— I mean, this is where I think, in my opinion, it’s just incredibly important for folks to understand, is that if you’re only successful 35% of the time, that means for every job, you need to hire three people. And while two people are washing out while you’re doing that, even if it’s a $30,000 job you’re going to spend maybe $50,000 – $60,000 in making two bad hires.
Nancy: Yeah. It’s not just the money. It’s the extra work for you and the heartache and all the problems. It’s not fun.
Josh: No. I agree 100% with that.
You’re doing so many things which I really like. I’m going to ask you a question when we go back to Facebook Live which we don’t have time to get into right this second because it’s a completely different topic but it fits in, I think, in a great way. So if you happen to be listening to us, go to AskJoshPatrick, watch the end of the Facebook Live and you’ll see my final question.
But we’re also almost out of time for the podcast. So, Nancy, I’m going to hope and I expect some people listening to this podcast are going to follow up with you and want to maybe engage you to help them find some people. And by the way, I’ve been doing this hiring stuff for 40 years now—
Josh: –and I think I’m pretty good at it. I’ve written some ebooks on it and stuff. Everything Nancy has said, I’m going to tell you from my personal experience, not only is it right on but it’s the gold standard for how you want a recruiter to act–
Nancy: Thank you.
Josh: –and here’s the reason why. I have talked with lots of recruiters. I mentioned this. Nancy is the first person I’ve ever talked in the recruiting game who has told me culture is the most important thing. Most recruiters tell me, “We can’t interview for culture because we don’t know how to do it.”
Nancy: Oh, dear. I’m surprised to hear that. You can definitely interview for culture, it’s there, Josh.
Josh: Well, or course, you can. I have lots of little tricks for doing that but what it is I find it most recruiters are too lazy to find out what the culture is of their client and they don’t know how to ask about it because they don’t even understand where culture comes from. You folks do.
So, Nancy, we’re about out of time and I know there are some people listening who are going to want to find you, how would they do that?
Nancy: Well, they can look at our website which is vinehouse.com V-I-N-E-H-O-U-S-E. com and you can just email me directly, firstname.lastname@example.org. I’d be more than happy to have a chat with you and find out what it is you need and if there’s any way we could help you. And if we can’t, I will be completely honest. We only want to work with people who we can actually help and who are a good fit for us.
I also have an offer for you, too. I have written a book. It actually is several months ago, it came out but it’s still there. It’s called Sustainable: A Fable About Creating a Personally and Economically Sustainable Business. It’s pretty easy to find it. You can go to Amazon. You’ll find it there. It’s got a Kindle version and a print version. But I have a couple of bonuses if you go to my website which is www.sustainablethebook.com. There’s a big orange button. Click on it and you get to buy the book. And you’ll also get a free 20-minute conversation with me where I’ll guarantee you’ll get at least one piece of take home value. I wrote a 37-page cheat sheet on how to implement all the stuff in the book. I hope that you go there and get it.
This is Josh Patrick. We’ve been with Nancy Slessenger. This is The Sustainable Business. I hope to see you back here really soon.
Narrator: You’ve been listening to The Sustainable Business podcast where we ask the question, “What would it take for your business to still be around a hundred years from now?” If you like what you’ve heard and want more information, please contact Josh Patrick at 802-846-1264 ext 2, or visit us on our website at www.askjoshpatrick.com, or you can send Josh an email at email@example.com.
Thanks for listening. We hope to see you at The Sustainable Business in the near future.