The Recruiting Flywheel

by Ben Hess, Managing Director, ThirdPool Recruiting

In a recent podcast, Steve Murray quickly dissects the most recent Real Trends Up and Comers data to demonstrate how the most successful companies reliably grow.

Of the 1,750 firms on the list, 1,150 have been on the list for at least five years (i.e. they’re not start-ups)

Of the 1,150, 730 firms grew their transactions every year over that period.

Of the 730, 80% of these companies grew organically without the help of merger and acquisition activity.

How do you grow organically?  

Increase agent count through recruiting and/or increase per agent productivity by investing in agent development.

Jim Collins’ flywheel analogy explains how this works.

Small and consistent investments in recruiting and development start to create organic growth momentum. But, the results come slowly at first.

By reinvesting some of the profits, the momentum builds and the flywheel seems to take on a life of its own.

But, don’t be fooled. It’s not a perpetual motion machine. Continued investment in agent recruiting and development (especially during difficult times) are necessary to reap the benefit of the momentum.

Steve summarizes:

[In a time where unit sales are flat to declining], we’re going to start to see the pendulum swing further into the direction of companies who practice the right habits of recruiting and developing people and investing in those people.

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