Leading and Scaling a Recruitment Business in the US: Finatal’s Story
This article was formed from the above part transcribed interview with Mark Sattin, Managing Director from Finatal a search partner for private capital investors and portfolio companies.
In the latest episode of "Scale Up Stateside," we are joined by Mark Sattin from Finatal, who has been collaborating with PGC for over a year and relocated to the USA in early January 2024. Now leading the US operations, Mark began laying the groundwork for this expansion while still in the UK.
In this session, Amy Davies, Managing Director of PGC, and Mark Sattin share his journey and their insights on scaling a recruitment business from the UK to the US.
This guide delves into how to effectively lead and scale a recruitment business in the US. While we've touched on this topic in our other blog, "How to Scale a Recruitment Business in the US Market," this blog will be a deeper breakdown on how you can lead a business to scale in the US.
Here are the following topics we’ll cover:
From Consultant to Scaling a Recruitment Business as a Leader
Advice on Scaling a Recruitment Business from the UK to the US Market
Why US Leaders Use Networking to Scale a Recruitment Business in the US
What to Prepare Before Scaling a Recruitment Business in the US
What Helped Finatal Succeed When Scaling Your US Recruitment Business
Scaling a Recruitment Business From Consultant to Leader
Mark Sattin's journey from recruitment consultant to managing director, now leading US operations at Finatal, is a story of growth and leadership. Joining Finatal as the third employee, Mark stepped into a startup environment and helped drive its successful expansion into the US.
"Our mission was to become the leading search and interim executive provider for PE funds and portfolio companies, and to do that, we had to conquer the US."
The US market, particularly in private capital markets, represents the biggest opportunity for growth. For most recruiters it’s common to have an eye for new challenges and the drive for new experiences played a significant role in his decision to relocate and take on the US market.
"The relocation to the US was a life-changing event."
Mark explained in the podcast that moving from working in the UK market to actually living in the US was a substantial adjustment. However, the opportunity presented by Finatal's founder, David Ayer, was too significant to pass up.
Keep reading to learn how Mark achieved this and gain valuable insights you can apply when scaling a recruitment business in the US.
Advice on How to Scale a Recruitment Business from the UK to US Market
Transition to the US Market
Based on Mark's experience he shared in the full podcast episode, moving from the UK to the US brought about numerous challenges. Particularly in understanding the different states and their respective recruitment practices.
"There are many different cultures across the states. People think of the US as one big block, but it's very different in how they think about search, how quickly Americans transact, and how relationship-driven they are."
Mark emphasised the importance of recognising UK vs US work culture differences. British recruitment agencies are entering the US market, bringing their top talent with them.
Customs and business etiquette vary between the two countries, can offering unique advantages you might have not thought of.
"The US market is huge, and until you've experienced it, it's hard to manage. But despite its size, the US market is very well-networked."
A common mistake recruitment founders make when planning US expansion is assuming that US business etiquette, rules, and laws are similar to the UK and consistent across all states.
In reality, each state has its own unique culture and regulations, requiring an approach as if each state were a separate country.
Our guide on How to Start a Recruitment Agency in USA provides advice on some of the key aspects you need to consider for your recruitment business when scaling in the US, including top states to do business in.
Networking in America
Networking plays a crucial role in the US business environment when leading and scaling a recruitment business. The market is vast, but it's also very well-connected.
Having led his recruitment agency Finatal in the US, Mark explained his experience of networking in the market:
"In the US, networking is all about business cards and connections."
The US market holds high importance in building and maintaining professional relationships, which can open doors and create opportunities that might not be as easily accessible through other means.
Despite the vast size of the US market, the interconnected nature of business networks in the US means that building relationships can be a powerful tool for success. For UK recruiters entering the US market, throwing yourself into the relationship-driven approach can be a key factor in establishing and growing your presence
Tips to Build Relationships with US Clients
Mark shared valuable insights into building relationships in the US as an essential action when scaling a recruitment business in the US.
He recounted instances where clients provided references promptly, even before he asked, demonstrating the strong, relationship-driven nature of the US market.
"If you do a good job for your candidate, they're going to look after you and reciprocate that love. The same goes for clients. Once you've built a proper relationship, they don't forget it."
However, he also acknowledged that it takes time for Americans to trust and ensure that you're committed for the long haul.
For those that have just started their US expansion journey the Recruit From Afar method is a great starting point, however it can only take you so far.
To truly succeed further in scaling a recruitment business in the US, building personal connections with your US clients is critical. Without this, your growth potential may be limited, hindering your expansion efforts.
Why US Leaders Use Networking to Scale their Recruitment Business
One standout aspect of American culture, PGC’s Managing Director, Amy commented on in the full episode, is the genuine support people offer in business relationships. US businesses often ask how they can I help you and truly meaning it.
A cooperative opportunity and mutually beneficial environment, significantly benefiting recruitment leaders looking to scale their business in the US. Keep reading to learn why.
" Both candidates and clients in the US are genuinely willing to help if you do a good job for them. They remember your efforts and are more than happy to reciprocate."
This proactive networking approach can be a welcome change for UK recruiters, offering substantial benefits by easing introductions and fostering a supportive professional environment. Moving from the competitive UK market to the more collaborative US market can lead to new opportunities and quicker wins.
Before you jump into scaling your recruitment business understand first that the US isn't just one homogenous market, but a collection of different regions with their own unique networking practices, is the key.
The Competitive Advantage of UK Recruiters Helps Agencies Scale in the US
Mark noted that from his experiencing scaling Finatal in the US, the intense competition in the UK recruitment market provides recruiters with a unique edge when transitioning to the US market.
"The UK market is highly competitive, which naturally trains UK recruiters to be quicker in terms of the pace, quality of delivery, and execution."
The UK is one of the most popular locations in the world in terms of the number of recruitment agencies operating. Despite having fewer agencies operating in the US, the US staffing market still generates the most revenue and offers significant growth opportunities.
Many UK recruiters are increasingly choosing to expand their operations into the US, which if you didn’t know is the largest recruitment market in the world.
The revenue potential in the US is on an upward trend. The US staffing industry is projected to reach $189.9 billion in revenue by 2025, with a 3% moderate growth year on year. The temporary staffing sector is expected to account for 88% of that revenue, totaling $167.6 billion.
This promising outlook makes the US market an attractive destination for UK recruitment agencies looking to increase their revenue and leverage their competitive training to succeed in a larger, dynamic market.
What to Prepare Before Scaling A Recruitment Business Based on Finatal’s Experience
Expanding your recruitment business to the US involves more than just opening a new office; it requires strategic planning and execution. For further insights and advice on some of the key aspects you need to consider for your recruitment business when setting up in the US, we have a free guide you can download here.
Mark Sattin successfully transitioned from leading a UK business to establishing a strong presence in the US. Mark shared the full Finatal planning process used to expand to the US in the full episode.
However, we've broken it down into five key insights that you can use to effectively scale your recruitment business:
Put Together a Good Quality Business Plan
Have a Good Reason to Move and Expand
Understand Where the Demand Is
Focus on Profitability
Adapt to the Local Market
1) Put Together a Good Quality Business Plan
“First and foremost, you need to put together a good quality business plan."
Before even landing in the US, it’s critical to develop a comprehensive business plan. Mark emphasised, outlining your goals, strategies, and the resources needed to achieve them. A solid business plan provides a clear roadmap and helps in securing the necessary investment for US business expansion.
2) Have a Good Reason to Move and Expand
"You need to actually have a valid reason to be able to go invest a chunk of money. And it is a big chunk of money to be able to go set up a business."
A significant financial commitment is required to set up a business in the US. If you’re thinking of scaling a recruitment business to the US, you’ve likely already established a strong presence in the UK.
This means you have assets and a reputation to protect when branching into unknown markets.
A common mistake companies make is assuming their UK business insurance covers claims in the US. However, most UK insurers will automatically exclude claims related to work carried out in the US under their standard terms.
Without sitting down and working the full figure you may need before investing, you may be setting yourself up for an expensive failure.
This highlights even more the importance of having a valid reason to invest such a substantial amount. Identifying a niche market that can be quickly rolled out and become profitable is essential.
3) Understand Where the Demand Is for Your Services
Mark led Finatal's successful US expansion and noted in the full podcast episode that they pitched their business first in different areas in the US to find out if there was a demand for their recruitment services.
"We did a bit of preparatory work of doing some calls or meetings with people in the US, pitching different services that we thought would work well."
Market research is key to understanding where the demand lies. Conducting preliminary work, such as calls and meetings with potential clients in the US, helps spread the interest in your services.
If you’re considering entering the US market or hiring remote employees in other states, use a data-driven approach can strategically position you to access your ideal target market and talent, helping you build your US business effectively.
To give you an idea, the top states for growth in employee onboards from our clients can provide an indication of where the best states for business are in the US.
4) Focus on Profitability
"Once we made profit in the US, we started looking at different quality margins and how to expand."
Mark explained in the full episode that when expanding into the US, the primary focus should be on achieving profitability. Start by identifying key hires and making strategic decisions that will lead to quick wins and financial stability.
5) Adapt to the Local US Market
"You can't take what you were doing in the UK and think it will work s exceptionally in the US. We tried that, and there were a couple of things we had to adapt."
Simply replicating what worked in the UK might not be effective in the US. Mark advised against forcing UK practices on the US market. Instead, adapt to local customs, business practices, and client expectations to ensure success.
What Helped Finatal Succeed When Scaling a Recruitment Business in the US?
A common pitfall when scaling your US recruitment business is appointing the wrong leader to grow the business. Transitioning from a consultant to leading the US operations at Finatel, Mark outlined what helped Finatal succeed in the US.
Recruiting the Right People
With over ten years of experience managing and leading teams, Mark had a solid understanding of the types of individuals needed for successful operations.
For recruitment leaders aiming to scale their business, this underscores the critical need to build a team that is not only skilled but also adaptable to new markets.
"We are in the recruitment business, so it's fundamentally all about the people."
It’s essential to hire individuals who will genuinely add value to your business and contribute to its scaling, rather than just aiming to increase headcount.
Focusing solely on numbers can lead to low productivity per employee, excessive cash burn, and a diluted company culture, therefore understand the US labour market first.
2. Startup Experience
Being involved in the business from its early startup days provided Mark with valuable insights into what it takes to thrive in a challenging environment.
"Having that experience of going into a colder market and knowing what it takes and knowing the personalities that are driven to do business development and are resilient is super important."
Scaling a recruitment business involves not just expanding your market reach but also ensuring your team has the resilience and drive to navigate these new challenges, especially when you’re scaling in a new territory.
3. Resilience and Independence
"It's not a pure startup environment. We get a lot of help from our UK business, but we needed people who could operate independently in the US market."
In the US, the ability to identify resilient individuals who can handle the highs and lows and view them as part of the job is crucial.
For leaders, scaling their recruitment business this means fostering independence within your team, allowing them to take ownership and drive growth in new territories.
4. Small Office Dynamics
"You're with the same people for 50 hours a week in a pretty small space, so you need people that get along, are positive, and have a good mix of personalities."
As you scale your recruitment business, maintaining a positive and cohesive team dynamic becomes even more critical, especially when operating in smaller, tightly-knit offices. Be careful, working in a small office environment may be the answer to pose unique challenges.
5. Quick Decision-Making
"The ability to make decisions quickly is crucial. If you're senior enough within the business, you don't need to get approval for every little thing, which allows you to move faster."
Beyond people, there are significant administrative challenges in setting up a US operation. From financial and legal setups to finding office space, these tasks require someone who can make good decisions quickly and efficiently.
Scaling a recruitment business effectively means streamlining administrative processes and empowering leaders to make swift decisions. The same way using an PGC as your EOR can streamline your solution to place and payroll contractors in the US and Canada.
6. Entrepreneurial Agility
"You need to make decisions, respond to feedback quickly, and shape the proposition and pricing effectively. Until you're on the front line, you can't really do that."
To concluded on what's above, successfully transition from the UK to the US and scale your recruitment business you must:
Recruit the right people
Understand administrative challenges
Maintain entrepreneurial agility
These along with the others together make key elements for leaders aiming to achieve new heights in the US market.
Winning Contracts for Your Recruitment Business in the US
Introduce Your Services and Candidates to US Clients
"You need to be able to show that you have the best candidates at your fingertips."
Finding top candidates is just the beginning. The next crucial step is to introduce your services and candidates to potential clients.
It’s important to communicate that you have the highest quality candidates ready for placement. Given the quick turnaround times and short notice periods in the US market, demonstrating your ability to deliver top talent promptly is key.
Mark explains that the approach involved sending clear messages to clients about the quality and availability of candidates.
This helps build confidence in your services and sets the stage for successful placements. As part of their strategy involved a mix of leveraging existing UK clients and understanding the specific demands of the US market.
Know the Market, Find the Best of the Best
"We mapped out who the target US clients were and ensured we had the top 2-3% of candidates in that market,"
Understanding the market and identifying top talent should be the main objective when scaling a recruitment business in the US.
This approach ensures that jobs are filled quickly and effectively. Make sure you have your top candidates ready and that they are among the best, as your reputation depends on the quality of candidates you pitch.
Struggling to find accurate research on the US market? We have the latest data and insights for the IT market, Engineering market and Marketing market plus overall US Staffing Trends to watch for 2024.
Laying the Groundwork Before Your US Arrival
“We had essentially the product to take to market. It started long before we were physically present in the US."
Preparation is essential. Mark shares that they had been building their candidate pipeline for about six-nine months from the UK before they were physically present in the US.
This ensured that when his team arrived, they could hit the ground running and start building client relationships from day one. Find out more ways to seize contract recruitment opportunities in the US.
Hiring Local US Talent
"We send our five cultural values to the people we're recruiting and ask them why they think they fit in with our values."
Mark emphasised that iIncorporating local US talent is another important aspect of cultural integration when scaling a recruitment business in the US.
This ensures that there is no misalignment between the company's culture and the new hires. Make sure to understand what US employees typically expect from an employer also.
Which is the Best State to Scale Your Recruitment Business?
"There's a symbolism to succeeding in New York—if you can make it there, you can make it anywhere."
When it comes to scaling your recruitment business in the US, New York is a prime location. Mark highlights that New York is where most money is spent and where the private equity funds are concentrated.
This is further supported by PGC’s data on the most popular areas to place contractors in the US. Here are some reasons why New York is a prime area for scaling a recruitment business:
New York
Ideal for European and UK companies due to excellent connectivity and strong economy.
Highest number of international air travellers, 7-hour flight from the UK, 5-hour time difference.
GDP of over $2 trillion, third-largest in the US, comparable to Canada and Italy.
Home to 51 Fortune 500 companies, including PepsiCo, IBM, and JPMorgan Chase.
Although not mentioned in the full interview, here are other top states for business growth based on our 2023 client onboarding data.
California
Top state for business with highest worker onboardings for the third year in a row (2024).
Fifth-largest economy in the world, despite high living costs, taxes, and strict employment regulations.
Home to Silicon Valley, with significant venture capital investments and abundant opportunities and talent.
Texas
Offers a favorable business environment with one of the lowest tax burdens in the US.
Known for its economic growth, the state hosts 53 Fortune 500 companies, surpassing New York.
Home to over 170 colleges and universities, with Austin emerging as a major tech hub.
The state's large population and low operating costs make it an ideal location for business expansion.
North Carolina
Reforming individual income tax (4.5% in 2024) gradually each year to 3.99% after 2026.
Plans to eventually abolish corporation tax by 2030 (currently by 2.5%)
Famous 'research triangle' surrounded by major universities is a hub for tech and life science businesses and talent.
A lifestyle that appeals to all - From mountains, beaches, cities and small towns, North Carolina has it all.
Leading and Scaling a Recruitment Business Expansion with PGC
Ready to take your recruitment business to the next level across the US or internationally?
At PGC, we act as your Employer of Record, seamlessly integrating into your team. Your growth is our growth. With over 24 years of experience, we've been helping recruitment agencies successfully access the US market.
As part of Workwell International, we offer comprehensive global solutions for your expansion needs. We manage contractor payroll worldwide, handling the complexities of state and country-specific payroll compliance.
This means you can focus on growing your business without worrying about geographic limits. Let us take care of the administrative burdens so you can concentrate on scaling your recruitment business effectively.