Land & Expand: A UK recruiter's perspective on relocating to the US

Amy Davies, Director of Strategic Operations and Growth at PGC Group sat down with Stephen Pye, US Head of Operations at RocSearch to talk about his experience relocating to Austin, the US staffing market and how it differs from the UK.

Stephen, you landed in the US in February 2020, a month before COVID hit. What has life been like in the US since then?

Timing has always been my specialty! I arrived three weeks before our first lockdown in the US, so it was a very interesting time to relocate. I actually feel very fortunate that I relocated when I did and that my visa was processed in time because if I hadn't moved in February, I would have been stuck in the UK.

In February 2020, RocSearch had a record month. We were then on course to break that record in March 2020. We had this amazing Q1 and we had all these grand plans of growth and hiring. Then three weeks into me being here and boom, we're locked down and I'm stuck in my apartment in Austin, not really knowing anyone. So it was an interesting journey, 2020 was certainly an interesting time for everyone.

In Texas, we had maybe a six-week lockdown in 2020 and since then limitations have been lifted gradually. Right now, we're living a normal life out here in Austin. There are not really any restrictions in place. But in other parts of the US, as things are changing with variants there are more stringent measures.

How does the lifestyle in Austin compare to that of the UK?

It’s kind of like chalk and cheese. I had lived in London my whole life and lived the London lifestyle and the London rat race. And for me, one of the appeals of moving somewhere else after years of kind of living and being around London was slowing down a little bit and having a slightly slower pace of life. I could have moved to New York or Boston. But for me, New York is just like London, just in a different place. The environment and the lifestyle are pretty similar. So I chose Austin because it was just such a different pace of life.

It’s just a lot slower, I guess. Life is just kind of slowed down a little bit and I mean, with the weather the way it is out here in Austin, we have roughly 300 days of sunshine a year, so we're always outside. It’s the middle of December and it's 80 degrees Fahrenheit outside, so I'm walking around in a T-shirt and shorts in mid-December. So, it's really different and because the weather is so good, everything's outdoors. I do loads of outdoor activities like hiking and paddle boarding. So, it's just a very different pace of life. I live five minutes away from the office, so my commute is five minutes, whereas in London, you can't get anywhere in five minutes!

I guess it’s given me a lot more free time and given me back a lot of time. And the pace of everything is just a little bit slower, not necessarily recruitment, recruitment is still very fast! It's still a very fast-paced and similar kind of pace in the working life. I guess just the rest of my life is going to slow down a little bit because I've got more free time on my hands.   Even playing golf year-round is just incredible. I've got a tee time tomorrow. There's absolutely no way I'd ever be playing golf in December in the UK!

From RocSearch’s perspective, what have been some of your highlights of the last year?

It's been a busy year for all the right reasons, which has been a good thing. We've pretty much doubled everything in the space of a year. We've doubled our headcount this year. We've doubled our contracts, we've doubled our revenue. We came into this year in an OK position. but in all honesty, we still came into the year and we were like, “We need to step up.”

COVID impacted us just as much as it impacted every other recruitment business. We were fortunate that we didn't have to lay people off. Our CEO pledged to keep as many people as we possibly could in jobs. And that's what we did. We kept all our team that wanted to be here. We've just absolutely flown this year and we've increased our headcount to 32 staff. So we're going to come into 2022 in a really strong position where we can really just focus on achieving the same again next year.

It’s been a crazy year for all the right reasons and it’s been a really positive year. We've had all our employees earning more money than they've ever done before, earning life-changing sums of money.  We've had more promotions this year than any year before. Our Senior Leadership team in the US has grown from two to seven and that will only grow and keep getting bigger. The fact that we're able to promote so many people from within and have more people sitting around the table in the leadership team, the fact that the growth has been so good and the employees are happy and earning good money, it just sets us up for a really good 2022. 

What would you say are some of the biggest differences that you have found in the US recruitment market compared to the UK? 

1. The Margins are HUGE in the US

The number one thing for me that it always boils down to is the fees. The fees are just astronomically different in the US, compared to the UK. Our average perm fee is about $26,000. 

And you know, our biggest perms fees this year have been close to six figures. So it's the fees are just astronomically different. You're talking two or three times the average perm fee in the UK. The same with contract margins, our average weekly GP is about twelve hundred dollars and that could be even bigger.  The margins and the values are a big difference and that obviously massively helps from a profitability standpoint as a business because you're doing fewer deals for more money and your deals per head can be considerably lower out here than it does in the UK or even in Asian markets. So the fees are a big difference and it's a huge positive.

2. The US is a more relationship-driven market

Secondly, the UK is a very transactional market. It's more transactional-based than relationship-based. And what I mean by that, I guess, is that in the UK for example, you mailshot out a candidate to your database and people come back to you and say, “I'm interested” even if they have no relationship with you. Out in the US, it's a bit more relationship-driven where you can still make those placements by specing out candidates and things like that. But people want to know you before they do business with you. It's more of a relationship-driven market where if you've got a good relationship with someone, they will trust you and trust your judgment. So I think that's been one of the big differences, and I think that's the thing for recruitment companies moving out here that I’ve seen some businesses struggle with. Certainly, we struggled with it when we first came out here because it's just a slightly different way of doing business. Pre-COVID, of all the clients we placed with, we had met around 90% of them beforehand. We couldn’t really do deals with people until we had met them.

Even now in this era of COVID with meetings not going on as much, we're still meeting with all our clients over Zoom, and they want to see you in person, even on-screen, and look in the whites of your eyes. It's very relationship-driven, and if you've got a good relationship with one manager in a company, that will open up the rest of the company very easily because they'll be your champion and they'll champion you to the rest of the business.

And so for me, that kind of land and expand mentality is all very relationship-driven, and the better relationship with the Hiring Manager, the more opportunity that's going to create. So I think that's one of the things that's a little bit different to the UK because the UK can tend to be a little bit more end-product focused whereas here people care a little bit more about who they're buying from.

What would you attribute to the success of RocSearch since expanding in both New York and Austin? 

1. Training

So there are a few things I guess. One of the big ones is training. As a business, we generally hire entry-level candidates, train and develop them, and kind of push through the barriers. We're always hiring experienced consultants, but generally, the majority of our hiring is at the entry level.

Giving those individuals a platform to be successful through good training, good management, good development, is something that certainly aides us. We have an exceptional training team out here in the US. Our trainer is one of the most positive, energetic people I've ever met. Her energy and her passion certainly rubs off on the rest of the business. The entry-level trainees certainly get a good platform to achieve success. We took our first entry-level cohort on in March, and all five of the people that we hired in that cohort have had at least one promotion, two of them are going to be promoted again in January. So within their first year, they will have had two promotions. They've probably added over $1 million worth of GP between the five of them. So, you know, it's been good to be able to get those junior employees up and running very quickly.

2. Organizational Structure

We’ve grown a really strong management team this year, which always helps if you've got good leaders and good managers. That just seeps down to the rest of the business. Our promotion structures are really clear and really straightforward, so people know exactly what they need to do to get promoted at every level. That always helps because it just means that everyone's got a goal that they're working towards, and they know exactly what their next step is in their career.

3. Culture

And lastly, I think our culture as much as anything else. We like having an office. We’re not necessarily one of those businesses that is like, “Everyone work remotely and do whatever you want whenever you want, just make sure you get the work done.” Don't get me wrong, people can work from home and they can have that flexibility. We have all those flexible working policies in place, but we like having an office. We like having a place where people can come to work and they enjoy being in the office and they have fun in the office. When you come to our office, you always hear people laughing and joking. We have a fun, sociable culture. We go out a lot, we have a lot of incentives. I think having that culture in place and what we build that culture on.

Whenever we're hiring and whenever we're looking to grow, there are three things that are really important to us. We want to build an office that's fun and is a fun environment that people enjoy coming into. We want to give everyone an opportunity to earn a life-changing sum of money, and we want to give everyone an opportunity to move into a senior position. And those are the three things that we build our offices on and build our business on. If we get that right for our employees and we give them those opportunities, if we deliver on that to our employees, then they'll deliver on sales and making placements, doing a good job for our clients.

Don't get me wrong, it's still a work in progress. We’re always looking to improve and make it better and we're still building our culture. But that's the foundation of what our culture is. And I think if you get the foundation right and you know what you're trying to achieve, everything else becomes quite easy from that.

At RocSearch, everybody celebrates everyone's success. We always want an environment where you can almost feel the energy, and everyone can feed off that energy. I would describe us as one of the least ‘sharky’ places out there. Everyone wants everyone else to do well. Everyone is everyone else’s number one fan and biggest cheerleader, and, that's the environment we want to create and we want to promote.

What would you say are your main focuses heading into 2022?

Growth is our number one thing for next year. We're just reinvesting everything into growing the business and into expanding. We want to get where we want to fill up our Austin office so I have the issue of having to try and find more space in our building!  We can take 40 people in this office just about and we moved here in February and when I signed the lease, I was kind of thinking, “Yeah, we'll give it two years and we'll fill this space up.” After one year in, I'm now struggling for desk space! It's a really good problem to have.

We're also in the process of interviewing for a new office, and we're either looking at West Coast California or Florida, so we're looking at new offices in either of those locations. I think a realistic goal for next year is growth in headcount, but also by opening new offices and new locations. It's going to be another big year in 2022 and we've got massive plans in place. And all of that really is centered around growth. What that means for people joining us externally is that they've got a huge opportunity to move into senior positions very quickly. For our existing team, they're all being pushed into and growing into more senior positions and taking on more responsibility. And it's just an exciting time that we can offer our employees real opportunities to grow their careers. And now we can offer it to anyone and everyone that comes in and works hard and applies themselves and learns and develops. And if they come in and do a good job, the sky's the limit for what they can achieve.

What are your main tips for UK recruiters thinking about expanding to the US?

You really must treat the US as 50 individual countries.

If you’re only doing perm it’s fairly straightforward, the regulations across states are fairly similar for doing perm placements. From a contract perspective, every single state has completely different compliance laws. I run our compliance out here in the US and PGC has helped massively in this regard. For any recruiters that are coming in thinking that you can do a deal in California and that it would be the same deal as in Illinois, you're going to be very surprised that they are so wildly different in terms of what you can and can't do.  

Talk to experts

If you're expanding your contract business in the U.S., you need to get a really good lawyer who understands compliance or a really good partner, like PGC, because they know the compliance inside out.

Focus on one state 

What I would suggest is you go after one state to begin with before you start trying to expand anywhere else. Pick a location, build that location, and then start expanding from there once you've got your base up and running. 

Be strategic with your location choice

If I was starting a recruitment company in the U.S. right now, the last thing I would do is open an office in New York or California. I'd go somewhere that is up and coming and expanding and is a new location, a new territory. Austin is a good one, but you know, you’re almost a little bit behind the curve if you're coming to Austin now because so many of us are here and doing a really good job. Denver is a great market; low cost of living, low office costs. You want to keep your costs as low as possible when you're coming out here and office costs in New York and California are astronomical and you just don't need to be in those locations.  The Carolinas are booming, and you've got the research triangle there and loads of people are setting up second tech offices there. If I was setting up an office now, I’d be a bit smarter about the location.

Bottom line

In summary, keep the costs low and just make sure that you land and expand, start in one location and focus on that location. For example, if you're in Austin, do most of your recruitment in Austin because then you're building your client base and you find a good candidate, you've got five or six clients you can send that candidate to. It's really basic recruitment methodology, but I guess it's an important thing to remember, the U.S., because it's so big, you can kind of get a bit distracted by the bright lights and shiny new things everywhere.

Get your flag in the ground, get your stake in the ground and land and expand from there.

Interested in seeing what the US staffing market has to offer you? Find out how PGC can help you make contract placements anywhere in North America.