Expanding Into the US Staffing Market: An Interview With Phaidon International
About Phaidon International
Kieran Behan has had a hugely successful career in recruitment, starting out in 2005. Since then, he’s experienced phenomenal highs throughout his career and is now the US Group Managing Director for Phaidon International. Phaidon International is a global specialist recruitment company that identifies, sources, and delivers business-critical talent to the most innovative industries in the world. The internationally recognized recruitment company started out in 2004, initially in the UK, and expanded to the US in 2013.
Since their US expansion, Phaidon has experienced some incredible successes with over a dozen global offices and a number of accolades and awards proving that. As Phaidon’s employer of record for onboarding, payrolling, and ensuring employee compliance of their contract workers in the US, we sat down with Keiran, the US Group Managing Director to hear their story. You can watch the video above for the full audio interview or keep reading.
Kieran, how did you get involved in the recruitment industry?
“I think like most people, I kind of fell into it!”
I joined the Phaidon International back in 2005. I had been doing a few business-to-business sales after graduating previous to that and didn't really know much about the recruitment industry. But I was looking for a career that offered more money, so I googled ‘high-paying sales jobs.’ This thing, called recruitment, started to appear in adverts!
A rec-to-rec actually called me and said, “I've got this guy who's launched a business, he's looking for his first hire. You know, I think you guys would get along on a personal level. Do you want to meet him?” I said “Yes!”, and then I went to meet the founder of Selby Jennings, which eventually became Phaidon after that. I had the privilege of joining the business right at the start. I was employee number two. We had a handful of candidates and maybe a couple of clients. We knew what market we wanted to be in. We wanted to be the go-to recruiter in mid-to-senior finance recruitment.
I did a crash course on recruiting. The training was very much, “Here's a phone, here's a computer, let's work it out together.” I really got into it. I realized recruitment was a really interesting job. The markets we worked in were interesting. The vision was always to grow and be a growth company. Within eight months, I began building teams out. I built a pretty good business, around 35, 40 people. Then the financial crisis hit. And that was my first experience of a difficult time in recruiting.
Diversifying the business
After the financial crisis we decided to diversify what we were doing in terms of brand offering. We knew we had a good recruitment model, but we wanted to protect ourselves a little bit and also provide that service to different industries. So that's when we started launching different brands. I grew up in Hong Kong. So, when we were looking at internationalizing, we were doing a good amount of business from London, particularly in Asia and a little bit in the US. That was something that I put my hand up to do.
Opening offices worldwide
I led the opening of offices in Singapore, New York, San Fran and Hong Kong. We were able to have a pretty good track record of taking people from a head office, launching on the ground, and then building local businesses off the back of that. Our founder exited Phaidon around 2015/2016 and that was when Harry Youtan, our current CEO now took the top job. I worked with him to actually launch the business in the US. He was on the ground for the first couple of years, so we did a bit of a job swap!
How Phaidon International looks today
When we started out in 2013 in the US, we were seven people brought over from London. Now here we are today in 2022, we've got nine offices across the US operating in eight different states. We've got around 650 people as of today. We surpassed $100 million in Net Fee Income (NFI) last year, which is a nice milestone to hit. It’s hard to imagine how much we have done in those 17 or 18 years but it's been a wonderful story. As a career, it's given me everything and more than I ever thought it could. And, as a business, I think it's amazing to see that the vision we had at the start, I think, outgrew us.
When you first entered the US staffing market, what did Phaidon look like and how did you build it up to the size that it is today?
Transferred a core UK team to the US
We came to the US with a core team that we had from a hub office in London. We originally decided to expand our recruitment business to the US as it is a good financial services market, particularly in New York. We were doing some business in New York, but the logic was if we go there, we might be able to do some more recruitment in the US. But we didn't know a huge amount about the US beyond that.
Built an “American business"
We launched with two brands, our financial services brand, and our supply chain brands. I think one of the things that we wanted to do from minute one, though, was to build an American business. So, straightaway when we expanded to the US we began hiring local people and graduates, teaching them about the Phaidon model. Our view was the more people we can teach how to do recruitment the Phaidon way, the bigger the business can become.
We were very adamant that we wanted American people to be part of our US expansion. If we were going to build a US business that had longevity, it couldn't just be a British outpost of a company doing some deals and recruitment and of sending the money back home. I think there is a definite difference in attitude and culture on some things around hiring and training in the US versus the UK, we worked that out really quickly.
If I look at the business we have today, the offices are run by locally grown American talent that we hired after graduating. The second-tier management in every office, is either fully or majority US staff that we hired.
How did Phaidon grow in the US?
I think we looked at how we could continue to pursue different brands in the US. We've got six brands in the Phaidon family. It’s part of my job to look at where the market opportunities are and where the best opportunities are geographically. The model we've always had is go with organically grown leader and then build around that person. I don’t think we would have achieved what we have if we tried to buy in some talent. A big part of the Phaidon story is that internal DNA.
The US is obviously a huge country. Originally, we pursued a pretty regionalized strategy. We focused on New York and then we moved up to San Francisco on the West Coast, Boston in the North-East, then Charlotte in the South-East. As we are growing more now, we are more switching to a brand-led strategy.
How important is it to take your UK employees when expanding to the US?
Work US hours from the UK before transferring staff
In the UK we basically set up a kind of shadow desk. So these guys, credit to them, were coming in at 1:00 p.m. UK time, leaving at midnight. They basically were spending their entire day connecting with and working with clients and candidates in the US. We did that for about three and a half to four months. That was a herculean effort from those guys to do those hours and it was really important that we made that our US team.
Provide a development journey for UK staff going to the US
For us, it was critically important to take our UK staff to the US because organic growth and how we develop people is part of our magic. Of all our staff that transferred from the UK to the US, all of them are still here apart from one, and I think that was a very deliberate process from us. We went through a number of interviews to make sure that these guys not only worked well individually but together. It's not as simple as going, “You guys want to be in America. Here's a ticket”. We put a lot of thought into it.
We will always try and have a core group of people that are ‘Phaidon’ and wherever we go and expand, we always want to bring new people into that. But that core is the one that helps everyone understand what it is, what our model is, and how we can scale the business and give them what we believe they should get from Phaidon which is unrivaled career potential.
What have been your biggest successes since moving into the US market?
Huge annual growth and staff retention
The results Phaidon has achieved have been incredible. I think we've grown 75% plus compound annual growth year-on-year. Probably the biggest thing for me though is how we've been able to retain a huge amount of people through that growth. We've been able to deploy in multiple cities and always end up being highly profitable and growth-driven. We've never really had a location where it didn't quite pan out, and a lot of that speaks to the time and effort we put into who we're going to deploy, what goals we are going to set etc.
Supporting and developing our team
I think a big part of our success has been how much we've invested in supporting the business as we got bigger. We have a 15-person talent acquisition team in the US now, and we have a similar sized L&D team. All of our management is still highly involved in the coaching, developing and mentoring of graduates and sales leaders. We are a very hands-on business. If you work here, you'll be able to get advice and help from anyone.
What would you say is some of the biggest differences you found in the US market compared to the UK?
The size difference
Just in terms of size and scale, you can look at a map and you can see America is a big country with 50 states. Some of those states are bigger than multiple European countries combined. Anyone with Google can can work that out! The other thing that is pretty obvious, is the scale of the industries and the companies here. I'd say if you take the equivalent business in Europe, in the HQ, there might be 500-1000 people. The equivalent office in the US might be three, four or five times as large.
Perception of the service industry
I really enjoyed seeing the perception of the service industry in the US versus Europe and the UK. You have to be good at what you do, don't get me wrong. But if you do demonstrate that you add value rather than being viewed as a transaction cost, you can build genuine long-term relationships here. Clients are willing to pay you well, and the candidates show a great deal of loyalty.
Having come from the UK market, where every percentage point is its own battle and so on, and if you said you were a recruiter at a dinner party, people would look the other way to a degree. It was lovely to come here and people were like, “Oh, that's great, you guys do staffing”. It's just a refreshing outlook on life. The caveat there is people will buy it once or twice, but if you don't deliver after that, then it kind of sounds a bit hollow. And I think that's what we really worked hard to make sure that we didn't just promise a good service but delivered it every time.
Attitude and culture
One thing I found really refreshing was the attitude of people. I may be generalizing a lot here but I think a lot of people in the US want to be successful. That might sound really obvious, but whether it's school, whether it's sports, whatever, there's quite a lot of competition built into the US academic and social structures. And I think people coming out of school here are a bit more mature and a bit more focused on what they want to be as an individual.
When you talk to them about success and you show them success, they're excited by it. I think sometimes in the UK, people can be a little bit cynical, a little bit negative and maybe want to pull you down the ladder rather than push you up. I think it’s a massive stereotype but you just feel a bit more energized here by what people want to do for themselves, which is just a great starting point if you want to work with them, basically.
Decide what company you want to be
You could go out and you could probably charge people a lot of money, but people have memories. If you are thinking of being in this market, what do you want to be? Do you want to be the company that gets away with charging the highest fees and get away with the whole time? Or do you want to be a company that is there through good times and bad times and offers you a great, fair price?
There are a million different ways to make money here in the US market. It isn't just about delivering good talent, it's about how you operate as a company, the morals, and ethics you have, and the commitment you have to markets.
I think people’s view of the US is that salaries are high, fees are high, and it’s a good recruitment market. And that is true. But if you want to build a genuinely long-lasting, successful business, you have to think a little bit more strategically than that around who you are for candidates and clients in the long-term term.
What is life in the US like?
I've been living in the US for around six years. I think New York has been the only place I’ve lived where I walked to the office in the morning and feel like things are about to happen. I didn't know what and I didn't know where but it was an exciting feeling! Having set up offices across the US and traveled a lot now with my family, the US has so much to offer. There are a lot of different large and smaller cities that are becoming more popular.
Your money can go a long way if you live outside some of the larger cities. The quality of life and the things you can do outside of work are exponentially bigger here. Did you know around 30-40% of US people don't have a passport? We all like to laugh at that in the UK, but having lived there, I get it! You don’t necessarily need one. There are so many things to do in the US and so many opportunities.
Moving to the US for me was just an amazing decision. Everything we've achieved on the professional front makes it even better. There's something for everyone here. I think if you are a committed, motivated individual who really wants to build a successful career, this is a country and a place that is eminently possible.
What's the main focus in the year ahead for Phaidon?
New US locations
We have got a Tampa office, which is launching in September 2022 so we have our first Florida destination. We also have three or four other places lined up for 2023 and 2024.
Scaling the Phaidon brand
As always, it is about organically scaling our business in either verticals or geographies where we think there is a genuine need from clients and candidates, but also a genuine possibility that we can be perceived as the number one provider without question. I think what's exciting for me is the bigger we get, the easier it is to make that statement.
Investment in our people
People are at the core of what we do at Phaidon. So making sure that we continue to look at how we on board, how we train, how we develop people. We're improving and adding to our management and leadership, in-house training modules. As we get bigger, that's becoming more key. It's always about how can we stick to our values, stick to our model, but always add just that one or 2% more around helping people learn quicker, do the job easier and again giving people opportunities to how to do what I did, you know, put a hand up and say, I'd like to go and launch this office or I'd like to be part of this brand. I think that that has always been part of who we are.
For recruitment agencies expanding to the US, what upcoming states should they look to open an office in?
To be honest, I think that they are all up and coming. I mean, maybe you could dismiss the likes of South Dakota, North Dakota and Hawaii maybe to a degree. But the biggest question I think people need to ask themselves is, if you're going to be launching a business, who's going to be doing it?
If it's yourself or it's someone who works for you, who is this person, what kind of life do they have? Whoever is going to build a business in the US is going to be working really hard and going to be spending a lot of time trying to grow and you need to be absolutely sure that they're happy.
Do your research on states to recruit in the US
You need to be doing your research because you can have everything New York has to offer but there's a trade-off with that. Florida is a place that has a totally different type of lifestyle. But is that close to your markets? Does being close to markets matter to you? If you need to access tech talent you probably need to be closer to some big cities. If it’s graduate talent, you've got to think about where the colleges are and what those colleges produce from people.
My advice to people would be to do as much research as you can get away with if you can come over and go to different cities. When I went to Charlotte, I was kind of amazed at in a way how small Charlotte City Center was, but then how business actually is in Charlotte and the North Carolina region. You can't just look at a map or look at house prices or the deals you've done.
I think the pandemic has dislocated a lot of stuff and that presents an opportunity. I think there's an opportunity now for people to go, “Let's go and see what we want to be as a business and be as people, and then see if it's viable to grow our business off the back of that”. That metho could have you end up in probably 35 to 40 of the 50 states that are in the US.
What tips would you give recruitment companies expanding to the US?
Ask yourself the right questions
I think the first question to ask is, why do you want to be in the US Everyone's probably heard how great the market is and how well that's going into this sort of stuff. But are you here for the long term or are you just trying to catch a good market and make some money? Or do you want to build a business in the US? And if so, what business do you want to build?
Do you want to build a single location or a single brand offering multi-location? I think you need to answer all of those questions before you launch rather than launch and work out along the way because that is going to impact how you can scale when you're on the ground. So again, I would really advise people not to go, ‘Everyone's making money. I'd better join them because otherwise, I've missed the boat”.
Understand the realities of operating in the US
The other thing I think people need to understand about here is there is a lot of positives to the market like we spoke about. There are also some realities people need to be aware of. The US is a relatively expensive place to operate a business, whether it's staff, resources, it's relatively complex once you work across multi-state, certainly in contract recruitment, but even just as a business.
Operating in the US requires a lot of attention, you can't just send some client some invoices and then expected to be paid back. There is a lot that someone is going to have to think about day in and day out, beyond the recruitment side. How much are you willing to reinvest in it? If you're viewing this as a dot on a map that's going to support funding businesses elsewhere, that's a different model to “It's going to be the first of many offices in the US with this strategic purpose”.
I’ve seen a lot of people come to the US in the 6-7 years I've been here, very few have actually really scaled businesses beyond 50-100 people. I don't think that's not because they didn't want to. I think it's because it's actually way harder than it looks.
Outline your purpose
Every dollar you make, you've got to be thinking, how much of that are you willing to reinvest into your expansion. I think people don't often think about that. People in the US buy into a clear purpose and culture. If that starts to become a bit unclear or unsure people have options and they will walk out the door and go somewhere else. If they're not sure that what you promised when they joined is going to be what's going to happen in a couple of years.
The US is a wonderful place, I usually always have positive things to say about it. But it isn't just this miracle place where the streets are lined with gold. It requires a lot of purpose, a lot of planning, and a lot of commitment. If you really want to be here in 5 or 10 years time, you're going to have to think beyond who you’re going to work with.
You have to figure out how you can become a US staffing firm in the American market as opposed to a UK or European staffing firm with an office in the US. Both are very different, with individual questions that need asked and goals. different questions and things to try and achieve.
Phaidon International has experienced huge success in the US by partnering with PGC to support their placement of workers in the US.
If you are interested in seeing what opportunities exist in the US for you, find out how we can help get you started in the largest staffing market in the world!