The Rule Of 40


I’m less than two years away from hitting my 40th birthday. It’s a big one, that, and presents challenges that – for all our sakes – I won’t over-share.

But 40 is a big number for recruiters, too. When it comes up, it tends to cause problems. It seems a headcount of 40 is when a firm’s sparkle begins to fade. It’s when the firm’s brightest and best start looking for somewhere else to ply their trade.

I’m not the only one to notice this phenomenon. Deloitte research shows that staff churn rates increase sharply as fee incomes rise into the £2m-£10m zone. And while we have around 24,000 agencies in the UK, 87% of them have incomes of less than £10m. It seems that growth isn’t as simple as growing.

Communication gap

The main issue at the 40-staff level is the cavernous gap that will have grown up between a company’s directors and its employees – particularly new starters.

As my business grew beyond 20 staff, I brought in team leaders, an internal recruiter and a performance coach. For a while, it was bliss not to get the call from a gravel-voiced trainee calling in sick. But that call might have made me realise that trainee had not been getting the support she needed in her challenging first weeks.

Some directors promote their top billers. It might seem natural, since they’re great at generating revenue. But not all firms are able to develop the future superstars – particularly in line with the values of the business.

Risk to values

It’s those values – which you worked so hard to instill – that get washed away by poorly behaving top billers. They get the power they’ve always wanted, but that everyone else has been fearing. Suddenly, all that talent in the team is a sitting duck for the new kid to shoot at.

Maybe, if I weren’t terrible at golf, I’d be playing the role of the boss who spends Monday to Thursday practicing his swing, then drops in to shout at people who are having a bad week, before taking his favourites out for an early Friday pint.

I don’t play golf. And, as ISL is only just approaching 35 people, I can’t tell you how we’ve pushed on from 40 staff, either. But we’re alert to the problem, and working on the basis that prevention is better than cure. These are some of the measures that can help:

  • Gauge the temperature: I can’t have one-to-one sessions with everyone, every week. But I can sit down with a good spread each month, to ‘gauge the temperature’.
  • Survey employees: A survey on the key issues can provide rich data to help with decisions. It might also give some people a safe environment to voice their real concerns.
  • Share the vision: When I still had my name on the sales leaderboard and a staff of 15, it was a lot easier to sell my vision. At a staff level of 40, it’s not so easy. Speculation becomes gossip, and gossip costs faith. So you need to get everyone together to share the vision.

As in life generally, what happens when you’re 40 frequently depends on the plans you make when you’re 25. Our strategy is sharing the vision, even if we’re not constantly there. I’ll let you know how we get on.

This article was first published in September’s Recruiter Magazine. Register to read it here

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