Specialist marketing recruitment company Stopgap was set up in 1993 by managing director Claire Owen, with just two people working out of a small office in London.
Now employing about 100 people, including 35 recruitment consultants, it had a turnover last year of £22m and is on track to increase that to £24m this year. The Recruitment and Employment Confederation, meanwhile, says revenues in the sector declined 4% last year.
The recruitment industry has historically suffered from high staff turnover, particularly among recruitment consultants – averaging 20% to 25%.
Stopgap had successfully maintained much lower rates through a generous benefits package, including sabbaticals, flexible working, a ‘chill zone’ within the office and a ‘mind, body and soul’ allowance to spend on things such as gym membership, weekends away or hobbies.
When it came to managing performance, Owen oversaw this directly herself, with consultants being assessed on a quarterly basis, either in the office or externally, often over an informal lunch.
Owen also conducted annual appraisals that included 360-degree feedback from both staff members and clients.
But, as the business evolved, this casual approach was no longer feasible, so the company needed to put in place a more formal process for managing staff performance. How could the company appraise staff formally without losing momentum or the ‘family’ culture it had long valued?
Last year Owen recruited a dedicated training and development manager, Melanie Birch, to work with HR manager Jacqueline Evans. Birch’s job was to work closely with the consultant team and identify and address performance issues as they arose. Owen claims this is a unique appointment for a recruitment company of this size.
Birch works with consultants on a one-to-one basis, and, where necessary, offers coaching, advice and support.
“I no longer had enough time to do it properly and I felt we needed to be doing this on a one-to-one basis. The more time you invest in your people the more they will give you,” says Owen.
Birch’s role includes offering coaching on making effective phone calls and how to speak to clients.
“People are often making quite hard-nosed phone calls so she can help with that and will sometimes listen to a call on headphones,” explains Owen.
Birch also acts as a coach and mentor. “She will work with somebody until they do not need her any more or, in the worst case scenario, until it is clear they are not going to be able to do the job,” says Owen.
“If we cannot do anything about their under-performance we will often be able to move them into a different role.”
Birch was also encouraged to audit whether people were happy in their jobs and, if not, whether they could be retained in the business by redefining their job specifications.
Owen gets weekly feedback from Evans and works closely with Birch. “It is informal, but there is constant communication,” says Owen.
“I have seen a number of consultants who had previously been consistently under-performing now performing at a level that I would expect,” stresses Owen.
The relatively low-key approach has also meant that the company has not lost its friendly atmosphere.
“There is more of a feelgood factor,” she adds. “The staff see we are looking after them and investing time in them. And we have very low consultant turnover – we do not lose consultants unless they are failing to do the job they are employed to do. There is a real feeling of friendship and camaraderie.”
The fact that turnover has remained so low has had a direct benefit on the bottom line too, Owen argues.
“We are about to have one of the best months we’ve ever had – and that is largely because a lot of the consultants have now been with us for a year at least. People are happy and firing on all cylinders.”
The company has also received external accolades, having been rated sixth in the latest Sunday Times Best Small Companies to Work For poll.
The employee perspective
Just over a year ago, Stopgap recruitment consultant Nicky Pearson really felt she was struggling.
“I was working on an account, but I was very conscious I was just not creating the revenues and, to be honest, was only just keeping my head above water,” says Pearson, who joined the business in 2003.
The arrival of Melanie Birch, the firm’s new training and development manager, quickly turned things around.
“She sat with me two days a week – normally for a morning or afternoon – for three or four weeks, listening to what I was saying and how I conducted myself with clients,” she says.
The feedback she got, including the need to keep conversations and briefings shorter, was valuable, but what was most important was that Birch was able to report back that there was nothing Pearson was doing that was fundamentally wrong.
“It was partly the breadth of businesses I was working across. I had been busy chastising myself and getting more and more upset about it,” recalls Pearson.
She was also moved over to dealing with freelance, rather than permanent, placements, which tend to have a quicker turnaround.
“I feel much happier now,” says Pearson. “I am still dealing with the same variety of candidates, but I am able to place more people and I have gone from being a non-profitable consultant to a profitable one. In another agency, I would have been out of the door after six months.”
Guide to making a success of performance management in 10 steps
- Identify the key drivers of your business – which ones are on target and which being missed
- Are missed targets down to individual or departmental performance, environmental factors or simply market conditions
- Identify what successful parts of the business are doing better or differently
- Even where targets are being hit, check managers are not driving teams into the ground simply to make short-term gains
- Be clear what you want to achieve from any change
- Accept you may have to take many small steps rather than a few big leaps
- Don’t assume the solution needs to be complicated
- When appraising staff ensure both sides are fully prepared and understand the process and its objectives
- Be constructive and give open and honest feedback
- Revisit agreed performance objectives on a regular basis
By Jonathan Austin, managing director of Best Companies, which researches the Sunday Times’ 100 Best Companies to Work For list
If I could do it again…
Looking back, Owen concedes that she should probably have brought someone like Birch into the business a year earlier than she did, as it has taken much of the performance management burden off her shoulders.
“HR is often over-worked and under-appreciated, and training and development is something that can often get put back because of other recruitment needs,” she admits.
“The more people there are, the more people you need to have within the HR function. It is a false economy not to invest in HR,” she adds.
It is also a good idea to look at the wider benefits that your company offers, and view them less as a fringe perk and more as a central part of your performance management structure.