Freedom vs. Security

Dec 1, 2007

Freedom versus security. My coach once asked me to rate which was more important to me. I continually re-ask myself this question every time I embark on a new endeavor.

It’s been about 14 years since I became a business owner. Owning a staffing business was not really something I had planned on. It was something I did in reaction to my employer going out of business. I was more than eight months pregnant, and had two small children already at home, a new mortgage, and a marriage that was definitely not set up for the trials and tribulations of business owner-ship.

I often hear young rookies, as well as seasoned veterans, speak about how great it would be to own their own firm or break out on their own and go independent. These days, it seems, “being my own boss” is some-thing of an American dream. However, I can’t help but wonder if I knew then what I know now, would I have done it, or would I have done it the way I did it?

In Robert Kiyosaki’s book “Rich Dad, Poor Dad” he writes that there are four financial quad-rants: employee, self-employed, business owner, and investor. Many of us in this industry, even if working for someone else, are considered self-employed. Some of us who run contract staffing operations could also be considered business owners even if we work for a parent company. The point is that we are in a unique, lucrative, and rewarding profession that promises financial freedom for anyone who buckles down, masters the game, and stays in it for the long haul.

The question many recruiters ponder at one point or another is “Where should I do this wonderful work of recruiting? Should I work as part of a high-performing group like Hobson Associates, or as a free agent member of Agent HR, or as an independent member of Hire-Ability or Top Echelon, or should I do it better than anyone else and start my own firm?” The answers to these career-defining questions often come out of a response to what one is facing at the moment rather than what is the best move for an individual’s personality, work style, lifestyle, goals, and objectives.

When I look back at my career in recruiting, I am blessed to have had the privilege of working in three of the four financial quadrants about which Kiyosaki speaks and I am planning on working in the fourth sooner rather than later. Given that I am about to close one chapter of my life in recruiting and open another, it seems as good a time as any to share my experience of working in these quadrants; my intention is that maybe you can learn from some of my road bumps and spare yourself the pain of making the wrong move for you and your family.

As I look back, I remember significant attributes and problems with the four companies (including my own) and work situations – a.k.a. quadrants – that I have been part of.

I don’t have any regrets, just grist for the mill, and with grist it is always a good idea to put it to use; so I share what worked and share what didn’t, and if one person can learn just one thing from me, then my sharing has made a difference.

My first job, in 1983, was probably my best job. I was considered an employee, but I was really self-employed in an employee/employer setting. It was a place where everyone who made it out of training (1 out of 30) had to earn a minimum of $68,000 their first year on a desk or they were not welcome to stay. I did not know it then, but I know now what a gift it is being in an environment where everyone is committed to working hard and winning the game, to a recruiter, or for that matter, to anyone. The other thing I remember about the good old days is that work was for work and we were all there to make things happen, for ourselves and for each other. What did not work for me was that I was very young, in my early 20s, and when after three years I grew bored with placing secretaries, rather than dealing with my boredom and creating new challenges for me, my manager poked fun at me. It was that firm’s lack of harnessing and leveraging their talent that eventually made 90% of their top producers walk away after three to five years and take their book of business with them.

The second job took me 22 phone interviews and nine offers to find. I wanted Utopia. I wanted a professional environment, good mentoring, a strong team, flexible hours (after all, I had kids), and I wanted freedom from territories and I wanted ongoing training, great Christmas parties, four weeks off, and a great bonus. To find this job, I did what I did for candidates and got on the phone and marketed my MPC – which this time was me. Much to my dismay, no one operated even remotely like my previous employer. By the end of my first week in the search, I realized that the only way I could create my past was to work for myself, and I resolved that one day, I would start my own place when the timing was right. Then someone gave me an offer I couldn’t refuse. A higher commission and flextime. WOW. My big list was boiled down to two deal breakers. (Good lesson to keep in mind for those candidates who want it all.)

What my youthful mind could not foresee was that the level of flexibility in the pay and hours came at a high cost. No two people in that organization worked the same. There were no systems, processes, or policies, the place was a free-for-all, and my credibility that I had worked so hard to build was constantly being challenged by the level of talent with whom I was partnered. The average recruiter income at this company was $45K. I stayed for four years, and even though I worked fewer hours for a bit more money, I remember that my stress and unhappiness level increased tenfold.

And then came the dream-come-true opportunity, or was it? I had never made a recruiting call, let alone received one – and then it happened. A woman had called one of my staff, a rookie, and was trying to recruit her. The rookie was scared, so she handed me the phone and the woman on the other end said, “Margaret, Margaret Graziano, you are the one I was looking for.” (Flatter me some more.) She went on to tell me that several of my “alma maters” were currently on her team, and that they wanted me to join them. She told me that everyone on the team billed in excess of $300K (in 1990 that was pretty significant for office-support placement), so I would be among peers. Best part – she told me that I could join if I paid a fee for rent, phones, to be with the best, and then I could keep 90% of the take. WOW, everything I ever dreamed of, the RE/MAX of recruiting. How could I say no?

I quit my job and the next thing I knew, America was going to war. With a new mortgage, a new marriage, and a kid on the way, I was scared, freaked out, to say the least. I walked in on my first day and made more phone calls than anyone in all three offices. I got to my desk, smiled and dialed until I had enough workable job orders to produce $30K per month. I needed to succeed and nothing was going to stop me. This is the way it was here for four years. The only problem was that there was only one other person in the entire enterprise with my level of billings, commitment, and client list. In the beginning that didn’t bother me entirely because I always had candidates to fill my jobs and felt like I had total freedom, I came and went as I pleased, and I was raking in the dough. Life could not get any better, or so I thought.

Turns out that that perception is not always real. The problem with having only two people out of 40 who were actually making enough money to pay the rent was that the company was in major financial crisis. Even though the RE/MAX program was a good concept in theory, because of poor management and execution, it was a bad concept in reality. There were serious integrity issues and serious money issues.

One by one, people were leaving and opening up their own firms, and when they left they took things that didn’t belong to them. Contacts, job orders, contracts were downloaded, copied, and pillaged. With everyone deemed a free agent, and no noncompetes in place, it got really ugly and eventually the business imploded, and what had started out as a dreamy situation turned into a lot of ugly lawsuits and wage claims.

And there I was: Another 22 phone interviews or Go Start Utopia. I chose Utopia and boy, oh boy, was I not prepared for the journey.

Employees, leases, bank loans, rent, commission plans, non-competes, training programs, policies, temp service agreements, more employees, more clients, not enough candidates, more employees, overhead, quality issues . . . Calgon, take me away.

And it got better, and it got worse, and then it got really great, and then it got really bad, and then it got better.

Business ownership is not for everyone. Often many of us have the dream of being our own boss, as Michael E. Gerber states, because we want to right our previous bosses’ wrongs, or because we want freedom and control. There are many reasons to become a business owner, and one of them can be to escape the boss, but that reason is often one that leads to failure. The reason has to be big enough to carry you through a recession, a job-order shortage, a candidate shortage, through failures, through lost clients and unhappy or unproductive employees – the reason has got to be compelling enough to give your life to it, or it’s not worth doing.

If it is freedom you’re looking for, I recommend becoming self-employed as a better solution than choosing business ownership. With business ownership, true freedom does not come into play until you turn into more of the investor and you have strong management in place to run the day-to-day operations. Without strong management in place, you are most likely working for someone much worse than your last boss. You are working for yourself! The time you used to spend producing is now spent doing things that don’t provide any immediate return on investment, and your time is often squandered by people, tasks, and issues that do not provide the same thrill as being in the trenches closing a full-fee placement.

If it is power and control that you are after, whether you want to be an independent or a new business owner, I recommend doing a lot of strategizing and planning. I recommend building a network of people to play with that can leverage your already proven talents.

I recommend you get flat on your values, your non-negotiables in your work style and service offerings, and make certain that the people you bring into your circle as employees or split partners share your fundamental beliefs about how to operate in the business. The wrong people doing the wrong things can destroy your reputation, your passion, and can cloud your vision.

As I review the past 14 years of being a staffing business owner, I can remember feeling at times a little like Citizen Kane did when all he wanted was to get back to the simple life. The reality is that some of the very best times I have had in this business were when I was working for someone else. There was always a steady stream of job orders, someone else paid the rent, someone else funded the 401(k). I came in, did my work, and left. Maybe I matched or contacted a few candidates at night, but all in all I had it made. I made more money than anyone I knew. I had virtually no stress, my weekends were mine, and when I left at 5, everything else was someone else’s problem. Security has its perks.

So before you go out and start your own bonfire club (as Danny Cahill so eloquently demonstrated in his NAPS presentation), do some real thinking. If your boss is demanding, remember that you will someday be that demanding boss. If you like doing splits, then you need people with whom to do splits. If you’re a better recruiter than a job-order person, then know that you will always need job orders and without them you will starve. If you hate research, figure the solution to that before you go out on your own.

Being a business owner has been one of the very best growth experiences of my life, I have made a lot of money, have developed as a leader, manager, and overall business person, and it has not been easy.

If you are up to it – all of it – GO FOR IT. If you are not, save yourself the 80-hour workweeks, save yourself the fights with your spouse or significant other, save yourself the agony of having to terminate someone because they have not made placements in 120 days, save yourself the pain of having to choose work (or not) over your kid’s 3 p.m. basketball games.

Being a business owner is not for the weak of heart, it is not for someone trying to escape the wrath of a demanding boss. It is for someone out to cause something extraordinary – someone who has the skill, the will, the desire, and the discipline to create an environment where people can choose to thrive.

Whether you are happy working for someone, happy being an independent, happy being a business owner, or have created a situation where you are the happy investor and someone else is dealing with the day-to-day, cherish what you have, honor your strengths, and leverage your power right where you are, every day.

Best in Success

Margaret Graziano, CPC, CTS, and mother of three, has been a top producer in the staffing and recruiting industry for the past 20 years and has owned her own firm since 1991. She prides herself on client retention and making the right hires. She has earned over $5 million in personal “desk production” income and has placed over 2,000 candidates in direct-hire positions. With the competitive business world and the war on talent in full force, Margaret’s company, Alliance HR Network, has ventured into new realms of talent acquisition, organizational development, and human capital consulting services, thus diversifying Alliance’s revenue streams and gaining new and exciting talent acquisition and assessment consulting opportunities. Margaret’s email is, and her phone number is (847) 690-0077. The strategic planning forms are listed under a Strategic Planning Downloads section at http://www.