What happens when a recruitment powerhouse collapses under a $20 million tax shortfall? Unravel the astonishing saga of Collar Group's dramatic downfall and the ripple effects it caused across the recruitment industry. We share firsthand accounts of those impacted, including a family whose relocation ended in sudden redundancy. We also tackle the puzzling issue of large unpaid tax bills and various experiences dealing with the ATO. Plus, we shed light on the robust support systems XRecruiter offers to those keen on launching their recruitment agencies.
Curious about what it takes to start a successful recruiting business from scratch? We recount the humble beginnings of Vendito, from a logo made in Microsoft Paint to a pivotal moment that underscored the importance of professional credibility. Learn why a strong brand and appropriate fee structures are critical to avoiding financial pitfalls. We emphasize how culture, continuous learning, and support are vital for staying motivated and achieving success, especially in the first 90 days of your venture.
Discover the cutting-edge technologies that can transform your recruitment agency. We share our experiences developing over 40 lead-generating websites with seamless CRM integration and AI-powered databases. Explore the significant financial benefits of transitioning from a PAYG recruiter to running your own agency under the XRecruiter model. From strategic planning to community engagement and financial management, we provide invaluable insights for scaling your agency or maintaining a high-performance solo operation. Join us for an episode packed with actionable advice and inspiration for the enterprising recruiter.
· Our Website is: xrecruiter.io
What happens when a recruitment powerhouse collapses under a $20 million tax shortfall? Unravel the astonishing saga of Collar Group's dramatic downfall and the ripple effects it caused across the recruitment industry. We share firsthand accounts of those impacted, including a family whose relocation ended in sudden redundancy. We also tackle the puzzling issue of large unpaid tax bills and various experiences dealing with the ATO. Plus, we shed light on the robust support systems XRecruiter offers to those keen on launching their recruitment agencies.
Curious about what it takes to start a successful recruiting business from scratch? We recount the humble beginnings of Vendito, from a logo made in Microsoft Paint to a pivotal moment that underscored the importance of professional credibility. Learn why a strong brand and appropriate fee structures are critical to avoiding financial pitfalls. We emphasize how culture, continuous learning, and support are vital for staying motivated and achieving success, especially in the first 90 days of your venture.
Discover the cutting-edge technologies that can transform your recruitment agency. We share our experiences developing over 40 lead-generating websites with seamless CRM integration and AI-powered databases. Explore the significant financial benefits of transitioning from a PAYG recruiter to running your own agency under the XRecruiter model. From strategic planning to community engagement and financial management, we provide invaluable insights for scaling your agency or maintaining a high-performance solo operation. Join us for an episode packed with actionable advice and inspiration for the enterprising recruiter.
· Our Website is: xrecruiter.io
Welcome back to another episode of Confessions of a Recruiter. We're going to break down and find out exactly what happened to Collar. Next is actually understanding what we offer here at XRecruiter.
Speaker 2:What are the steps of the process that we take a recruiter working at an agency to being their own boss, working under their own brand? We reveal all and show you exactly how we do it for you and your family. Welcome back to another confessions of a recruiter episode with yours truly, blake and declan.
Speaker 2:This week, uh, we're going to be going through a couple of big bombshells that was let off over in perth, specifically collar group. We're going to be talking about an article that was let off over in Perth, specifically Collar Group. We're going to be talking about an article that was written about that and giving our thoughts and comments on the rise and potentially fall we're not sure yet of Collar. We're also going to go through another couple of articles that we think might be of interest to our community and then, lastly, due to popular demand, we're going to actually go through what the ex-recruiter framework is when looking to go out on your own as a recruiter. The one thing that we do get a lot from recruiters when they go through the process of inquiring about starting their own agency. All of them are extremely shocked at how much stuff we do at ex-recruiter.
Speaker 1:And that's probably our fault because we don't explain it well enough when it comes out. So it's people can't even comprehend. They're like, wow, I thought it was just setting up a business and a website and there's the backend, support and, and how much you know, the the whole team actually makes it all happen. So, mate, I'm excited to chat about this episode because there's a lot of good stuff about to happen. But, mate, the stuff with collar scares, the absolute shit out of me. I I texted him. He didn't reply, but I just sent him a text say I hope you're feeling well. Yeah, it's fucking hectic.
Speaker 2:It's. It's super sad. So I guess just to like even take it a little bit of a step back to what's recently happened, ephraim's won like a ceo of the year. He's the fastest growing recruitment agency, like.
Speaker 2:The rise of Collar Group was like astronomical and there was a lot of speculation around how the hell is he growing a business so quick, so fast with so many heads? When we had him on the podcast about a year ago, you know he was pretty inspirational, great guy to talk to. He's a bit controversial, I don't know why, specifically because we didn't really get any bad vibes from him at all. He seems like a great guy. But there was a big question mark that everyone always was wondering is how is he funding the growth of this business, especially in temp? You know to have 140 recruiters or something in two years on a temp desk like it takes a year for a temp recruiter to Just even get that many temps out, yeah, to pay their costs back, yeah. So to have that at times 140, it's a crazy, crazy growth trajectory. So obviously we still don't know but like. But what does this article say? The headline reads Collar VA.
Speaker 1:Update Voluntary administration Is the VA yep $20 million shortfall financier supportive, which is A positive and new business next. So there's a lot to go through. So Collar's been in talks with the voluntary, with the administrators, since January, got a director's penalty notice and was forced into you know that sped up the voluntary administration process just a couple of weeks ago. So I think the you know chatting to people from Collar and you know different walks of recruitment. I think it was a pretty abrupt. It was an email, a social media post, and you know people were logged out of their computers relatively fast.
Speaker 2:Yeah, I mean it's pretty sad to see, like you see a lot of stories, like I saw this story of this recruiter. She moved from Brisbane to Perth. Did you see this one had young family moved from Brisbane to Perth, set up a division and then you know, within a couple of months she's essentially been made redundant. Really big life moment for her that you know hasn't worked out well and you know, heartfelt kind of condolences there.
Speaker 2:But you know there's always a silver lining in these tragic moments in people's careers and businesses and hopefully we're going to see what that silver lining is soon. But yeah, sorry to hear that for all those people at Collar.
Speaker 1:Yeah, yeah, it says to confirm. Collar owes about $20 million to the ATO and another million dollars in trade creditors.
Speaker 2:A million dollars in trade creditors. That's not as bad as I thought it would be ATOs I don't know how you get away from paying the ATO for so long.
Speaker 1:Is that even Collar's fault, or is that the ATO's fault for not monitoring it?
Speaker 2:I don't know, mate. I owe like $1,200 personal PAYG tax and I get absolutely written up.
Speaker 1:Yeah, it's like the bigger the bill, the less they care, yeah, so I don't know how people get away with not paying $20 million tax.
Speaker 2:I got a notice literally last night from my accountant saying that my PAYG income is too high that my super contributions. I need to pay a little bit of money on my super. So I got a $1,200 tax bill because they're charging me 15% money on my super. So I've got a $1,200 tax bill because they're charging me 15% tax on my super contributions because I went over the threshold.
Speaker 1:Mate, it's wild. Even the sale of our house, the interest on our account now in our bank gets automatically tax deducted. Do you know that? No, yeah, so the interest charged, and then the next line came minus 47%. The amount of that was taxed straight out of my bank account. That's fucking wild.
Speaker 2:We're fucking controlled here.
Speaker 1:We're a controlled little farm Going to be eating insects in no time, but that's a whole other story. Let's focus on what matters. But Danny Barlow came out. He's the director of A Positive and he said we're supporting them with their being with Collar from day one and they're going to see them through it. So I'm not actually sure how big the tent book actually is there, if it's a million dollars in trade creditors.
Speaker 2:Yeah, I mean, surely it would have to be pretty big. I mean, if anyone knows, we'd love some insights, not because we want to gossip or anything, but just because it'd be. It's. It's interesting to know the growth trajectories and what could have gone wrong, so people in the future can can really safeguard themselves from potentially making some some mistakes that others have made before them, yep and cause, once you get in that, that stage it's, it's, it's really hard to get out of it.
Speaker 2:Hey it's. I don't know how ephraim was able to go from where he started to where it is like obviously prior to administration, but that would have been a crazy, crazy, like two years, like he's onboarding all those people getting them up, why I would be stressed as shit.
Speaker 1:I don't know what I would do. I'd honestly contemplate a lot of things if I owed 20 mil to the tax man and lost my business allegedly allegedly, yeah, allegedly allegedly so, but, um, but, yeah, it's. It's a hectic story, mate. There's a, there's a few others here, is there um?
Speaker 2:yeah, so I I guess just to kind of summarize this article and if, if, if, anyone's uh subscribed to shortlist, you probably know what we're looking at here. But, um, um, one thing that that kind of came to my mind when I heard about the voluntary administration and look, hopefully, hopefully, they get out of it. It's, it's usually not likely that companies come out of voluntary administration. If it's a case of just cutting 30% of your staff to save on costs, you would just make them redundant. You wouldn't actually go into administration.
Speaker 2:But one thing that did come to my mind when hearing about this, rightly or wrongly, was there's probably a lot of recruiters at Collar that were doing a great job.
Speaker 2:You know, I've spoken to a lot of recruiters at Collar that are billing 40k, 50k, 100k a month and they're going hey, I'm doing a great job, my job is safe and secure.
Speaker 2:And what you don't realize, especially you know, when you're on a crazy journey, like Collar was on or any other business, like GoTo was a perfect example I know a lot of recruiters at GoTo that were billing amazing, thinking their job's really safe, not realizing that the actual internal mechanisms of the business weren't functioning the way that everyone expected and then all of a sudden, everyone loses their job.
Speaker 2:So you think you've got a really stable and secure position if you're a performing biller. But you you never really know. Which is the scary part about working for someone else's business is you really got to have to put a lot of faith and trust that they're doing the right things, they're keeping up with their obligations, they're paying the super, they're doing all the things that are necessary to keep the business healthy. Whereas if you're a really high performing recruiter and you're not relying on I don't know other recruiters giving you leads or PSAs, or you're not just on panels where you're just placing roles, if you're a 360 recruiter, hunting your own business, finding your own candidates, making the placements, there is no more secure and stable position than just working for yourself.
Speaker 1:Yeah, a hundred percent, Because then you've got a clean slate. Everyone starts at zero and you can build up from there and have all your checks and balances in.
Speaker 2:You know what your income is, you know what your expenses are, you know what you can do, you know what you can't do. If you're doing well, there's no reason why you can't do it for yourself and make sure that you've got the freedom, time, flexibility to run your desk how you see fit to earn the money that you want to earn. So you have freedom of choice and you can do the things that you're really passionate about.
Speaker 1:Awesome, so that would be a great segue into chatting about what we actually do here at XRecruiter.
Speaker 2:Yeah, yeah. So the reason why we thought we'd bring this up is the process of XRecruiter and just to give more context for anyone that's listening and doesn't know what X Recruiter is. We're a business that helps high-performing recruiters, experienced recruiters and ambitious recruiters break the cycle of that mundane hamster wheel of recruitment and start a brand and work for themselves. We're really fortunate. Over the last 18 months we've helped over 50 recruiters be able to start their own brand and work for themselves, and not to mention winning startup of the year last year, business and excellence, et cetera. But what we do at XRecruiter typically surprises a lot of recruiters until they actually talk to us and they walk through what life might look like under their own brand. So do you want to kind of give us a high level overview of kind of the steps of the process that we usually take people through, through this discovery process, and what it's all about?
Speaker 1:Awesome, so discovering them, or what we offer.
Speaker 2:Yeah, yeah, yeah, so like oh, yeah, the actual offering.
Speaker 2:Yeah, yeah, yeah and like and how it all works.
Speaker 2:Like just for context, before Declan goes through this, generally what we do is when we talk to a recruiter, it's really important that we get to know them and what their goals are, because we're not just a service provider, it's a cookie cutter approach. Everyone's goals and ambitions are really different. So before we even go through the discovery process, it's important to know where you're at at the moment, what your blockers are and, ideally, where you want to be. If there's a values alignment because this is very much a values-driven business if there's a values alignment to where you want to get to in the next two, three, four, five years, then we actually take you through our discovery process where we learn more about you, what your drivers are, what makes you tick, what your strengths and weaknesses are and how we can support you in that journey. So once that's done and we find that there's a high-level alignment to what you want to do and what we can provide you, we go through the discovery process, which Declan will give you kind of like the dot points.
Speaker 1:Essentially, yeah. So once you're ready to kick off and we want you on board which is super important, like Blake said, and the reasons why many recruiters choose to partner with us is you know the market, credibility, the way they have impact on the market they don't look like a first-time business owner. That was the one thing that frustrated me the most, and I'm sure it did you as well, blake. We literally looked like we didn't know much and it came across.
Speaker 2:I found Just to thread in a quick story here. So when I first started Vendito, I created the logo in Microsoft Paint because I'm a Microsoft Paint genius and I just whacked up a random like $200, $300 website. At the time it was a one pager, it was literally like a photo and like a vendetta recruitment. And then I my my first step to starting working for myself was like all right, I've got a website up, got my logo, time for me to try and get some money in the door. So I essentially just started ad chasing and so I built a hit list of seek advertised roles and it was like all right time to just bang out some calls. I think it was like my third call or fourth call.
Speaker 2:I'm smashing out calls to this guy and he's like, oh yeah, look, we've got a role, blah, blah, blah. What if they don't last? I'm like, yep, no worries, we've got a three-month replacement guarantee, we've got a six-month replacement guarantee. And he goes, mate, he's like, how long have you been in business? I was like, oh, what do you mean? He goes? I just did an ABN lookup, mate. You registered your ABN two days ago. Mate, you're talking to me about a six-month replacement guarantee you might not even be here in six months.
Speaker 2:And I was like, holy shit, how did he do that? And I asked him I'm like, oh, why did you? Why did you? It's a bit weird to do an ABN lookup from a cold call trying to pitch you. And he goes yeah, man, I googled your business, as you repeated where you were calling from, and it looked like a scam. It was like this random one-page website and so I did an ABN lookup and I saw that you registered the ABN two days ago. And yeah, sorry, man, I appreciate the hustle. What am I your first call? Nah, like you're my second or third. And yeah, safe to say, I didn't get that job on, unfortunately. But they're the issues that you don't realize you run into when you're just kind of fumbling around doing it yourself, like you will have so many roadblocks that you don't anticipate that you have. And back to Declan's point is the credibility piece of going. You know what we look like professional, we look sharp, we look like we've got authority and credibility so you don't run into these issues when you start your business.
Speaker 1:Yeah, and the big thing is even like to flow on from that being able to charge premium fees, cause I had a family friend go oh mate you're, you've got a little serviced office and not much outgoings, just charge five to 7k flat fees. And then I found myself in a rut for 18 months trying to get ahead because I could never increase the volume of my placements. I was still only doing two or three and I never had enough money to actually get ahead. So those little things early on is why we put such an emphasis on the brand, the message, you as a recruiter because you're highly skilled, generating hundreds of thousands of dollars for other people. But when you start your own, typically that gets forgotten about and that's when a scarcity mindset comes in, self-doubt and it's really hard to get out of that rut. So those first 90 days are so important to us.
Speaker 1:Culture is another really big thing. There is not one other business in the country that is disconnected with this many high-performing recruiters. And it's not just about you know. You know working and being a high biller and running your desk from home. It's a camaraderie Like. Look at the trip in Fiji. We had the recruit tech talent Harwell, hp people Vendito. We were all there.
Speaker 2:That's it. Culture is really important because what we find is a lot of recruiters. One of their blockers is I don't know how I'm going to go working by myself, with no support, with no one to talk to, at home, in the dark, in my spare bedroom, with my hoodie on. It seems like it seems like it's going to be the best thing ever, but then you do it.
Speaker 2:Well, yeah, it's not inspiring working by yourself and if you've got ex-recruiter and all the ex-recruiter partners, it's not just a relationship between you and ex-recruiter. Once you're a part of ex-recruiter, it's actually a relationship between you and all the other agency owners that are all traveling the same path that you are, that can all share insights and advice and have been in your shoes three months ago, six months ago, 12 months ago that you can really start to learn and leverage their wisdom and experience. So culture is obviously a really big one.
Speaker 1:Huge Learning and support. So, whether it comes from us or other agency owners, that's something. And this whole business model only works if we're over delivering on expectations. So that's why I always want to make sure you've got the latest tech, the best nuances, systems, processes and making sure they're actually implemented in your business. So the 90 day induction that's what we do from July, october, april, january, throughout the whole year. So anyone that signs up before launches their business in that and we take you through five two hour sessions to ensure we embed that into your business. So that's really, really important that you start in those 90 days, because those first 90 days really set the tone for your business.
Speaker 1:It's really hard to get out of that yeah.
Speaker 2:So for more context on that, the average partner builds 118,000 in their first 90 days of business, and there's a few reasons for that.
Speaker 2:One is we have the 90 day induction that Declan just explained, where we literally hold your hand through the first 90 days of your business to make sure that you're focused, you're confident, you're feeling like you've got direction and there's no blockers for you to achieve what you need to achieve. That sets the tone for your business. What a lot of people typically tend to do outside of Executor is their first 90 days. They're still trying to figure out how to get like a seat contract. They're still trying to figure out how to get the CRM loaded up properly and how to send candidates out or do a data import. So the reason why there's so much success in the first 90 days is one we take all of the administrative business burden away from you so you can focus on being revenue generating. You can focus on what you do best and then go through our workshop to ensure that we tighten up every part of your process to get you to the road to making a hundred grand in your first 90 days.
Speaker 1:Yeah, so that's the number one focus and goal. So the revenue your ability to earn revenue is seven times faster through our four-step onboarding process and continuing that through the 90 day inductions and really being there to inspire you, motivate you, keep you accountable, because you can just drift away sometimes when you are working on your own. Reporting to yourself can be the hardest thing to report to, so that's really one of the big differences when starting. And then our six-step agency setup process. So, to give you an idea, we set up, we incorporate your business. So Samantha's our company accountant here and bookkeeper. She'll set up your entity, register you for tax, everything's complied and audited by the RCSA and that means we're supplying your domains, getting your website hosted and all that stuff in the backend.
Speaker 1:And the branding part really is the most exciting part through this agency setup process. So that's where your logo is brought to life, your brand identity, all your graphics, collateral, even set up your own Canva account so you can post to social media immediately. Tiles, terms of business Like, I think, the terms of business that Paul and Mauricio design. They're better than most pitch decks.
Speaker 1:Yeah, exactly.
Speaker 2:Yeah, so a lot of recruiters have a little bit of creative constipation when it comes to how they want to present themselves online, and so what we find is when we set up your meeting with the accountant to register your business and then we book you in for your creative workshop, that's where we kind of uncover how you want to present yourself to market, what industry you're in, what other companies that you like, the feel and the vibe of how you want to position your tone of voice to the market, your vision, mission, values.
Speaker 2:So this creative workshop will uncover and be able to allow us to create all these assets that Declan mentioned through terms of business logos, brand identity documents, social media tiles, email signatures, linkedin banners, like you name it. That all comes out through the creative workshop and then you've got a full suite of assets through your whole business where it's not like you know you look great online, but then you send through your terms of business and it just looks like a shitty word doc and there's no like congruency between your marketing material and how you present yourself. Yeah, and that even happens at big agencies.
Speaker 2:Oh mate in terms of business and most businesses they look like the most boring legal doc, whereas ours it actually looks like a really well-designed sales brochure that actually pitches retainers and sells for you, like it's actually a document that gives you an opportunity to continue to sell your services. A lot of people don't use that opportunity to present your terms as a sales tool. People don't use their terms as a sales tool. They run away from it because that's where the important stuff happens. But if you can redesign your terms of business and create it as a sales tool to further sell your services, that is where the secret sauce comes.
Speaker 2:Okay, so if there are any recruiters out there that are interested to find out what it's like to have a VA, support them in their role whether that be to bill more, reduce tasks that they don't enjoy doing or be a more effective recruiter in their niche then we definitely recommend reaching out to the outsource people or top Reach out to them, inquire on how they can implement a VA in your agency and to support you. And if you mention ex-recruiter or confessions of a recruiter, they will give you a 13% discount off your bill per month on this VA. That will allow you to scale your business, scale your desk and to bill more and make more money. So go reach out to the outsource. People say Confession sent you, get your discount and see what is possible.
Speaker 1:We've designed and developed over 40 different websites since we've started, which we're fast becoming one of the biggest website builders in the industry, just by default. All structured around lead gen. They are built to focus on what matters most, so making sure people can find you online, and also make them easy and simplistic. A lot of recruiters have 15, 20 page websites. You get on there and you're super confused. You don't know where to go, so with us, we make sure they're. Also, they've got your own native job board which is custom built, which is unheard of there's no third-party apps or anything like that integrated in with your crm.
Speaker 2:So you put on the tip of my tongue yeah, you put a job up on your crm, it'll automatically show on your job board on your website so people can start applying the moment you feel the job it comes off. So there's no manual handling, it's all automated, um, and it makes your makes your online presence just look so much more professional than doing a little one pager and trying to get away with, you know, fumbling around with outbound calls yep 100.
Speaker 1:So and you know, for, like, say, harwell h people, tech talent, a lot of these brands they're actually winning clients over that they weren't. They didn't have any chance of winning prior. So that's really interesting. Some clients didn't want to deal with, say, you know, a random looking agency because it didn't align to their brand and it's going out to market and it doesn't look good. So that's where these companies are having major wins that they've never had before because of how they come across, and then the actual wheelhouse of what's on the inside of XRecruiter as well for the technology. So this is world-class. This is the best tech stack that I think you can put together in recruitment, yeah, so AI-powered database with ChatGPT integrated.
Speaker 2:So get this. Once you create a job in your database and you start shortlisting candidates, chatgpt will automatically create a follow-up sequence of nine steps to follow up that candidate over a two or three week period based on their profile and the job description that you put in the CRM. So, let's say you create the job, the JD is McDonald's store manager. These are the responsibilities. Then, all of a sudden, you shortlist someone from HJ's. It will say hey, mary Jane, love your experience at HJ's. We're currently recruiting a role that does this, this, this, that suits your background. We'd love a chat for 15 minutes if you've got time. Then it'll send them a text message to follow up and say hey, it's me, it's Blake, I just sent you an email about an amazing job opportunity blah, blah, blah. And it'll actually follow them up for two weeks until they respond.
Speaker 2:Obviously, once they respond, it cuts off the communication, the automated communication. It's time for you to take over. So this is how you can start to get inbound candidates from an outbound focus where people come back to you and go oh, I'm so sorry, I missed your first two emails. Thank you for the text message. Let's have a chat about the role. So now, instead of shortlisting 20 candidates, calling the 20 candidates connecting with three, having to find another 20 candidates those original 20 that you've found. They will be getting followed up over three weeks, so you're never actually forgetting to follow through and call the candidate back that you haven't spoken to the week prior. So it starts to compound your outbound activity and gets way way better the results than traditional methods.
Speaker 1:Yeah. So to add to that, it's not only just getting better results, but it's also nurturing your candidate pools for you, which limits the extra costs that you don't realize you're creating for your boss right now. So you're constantly downloading new CVs, new CVs, new CVs, and they're only ever contacted once and then they're forgotten about. So that's where using actually using your database, and this is probably the first database I've actually enjoyed using, yeah that's actually a really good point.
Speaker 2:So we've used JobAdder, bullhorn, I've played around with Vinceri, or Vinceri, or however they'd like to pronounce it, tris, zoho, zoho Recruit, hubspot, yeah, hubspot and, to be fair, all of them I've never actually used properly. Jobadder and Bullhorn are the only ones that I've used. Literally, I'll sign into JobAdder or Bullhorn just to post a job ad, because it was integrated with Seek. That was literally the only time I used it. You would never naturally, when you get a job, you would never naturally go into your database and try and find existing candidates you've spoken to before. It was just never really a thing, whereas this, this database, is so user-friendly. The first place that you feel like searching is inside the database, instead of seek talent, linkedin, whatever it might be. So having a user-friendly database is really crucial to have the adoption for yourself and your team if you end up growing a business beyond yourself.
Speaker 1:Yep. But hey, we still offer all the premium resources that you're used to as well. So LinkedIn, um, corporate recruiter with talent insights, which is a huge bonus Not everyone gets that Um and 120 LinkedIn credits a month as well. The standard is a hundred. Uh, linkedin job slots, seek premium job ads, seek premium talent search.
Speaker 1:And now this part is the big kicker. So a lot of recruiters out there think you know, we're just white, white collar, perm and that's all we know how to set up. We actually run multiple temp agencies and support multiple temp partners. So that includes payroll financing. So if you were to start a temp agency tomorrow, you probably couldn't because you'd have to put your house, you'd have to guarantor it and do all that With XRecruiter. We fund your payroll. So if you want to get six tech contractors out tomorrow on a $1,000 day rate, we can. If you've got 15 starters next Monday with a warehouse, we can fund that for you. So and it's you get the peace of mind here by having trade credit insurance. It's with Allianz. They're the world's largest insurer of employment services and labor hire. So trade creditors insurance means we're always going to get paid. So if a client is you know defaults goes into administration.
Speaker 1:We're always going to get paid, so that peace of mind is and your temps are always going to get paid, so that stuff can never go wrong. And we also have full insurance coverage. So PI, professional indemnity insurance, public liabilities if you have an office, cyber work cover and much more. So that's the technology area of the business.
Speaker 2:Yeah. So if you can imagine just to give some more context on that if you can imagine so you set your business up. You get all of these resources the CRM, seek, talent search, linkedinruiter Pro licenses, payroll, financing, back office all of it set up without actually signing any supply agreements. So typically, as Declan mentioned, you would need hundreds of thousands of dollars in the bank to set up a temp recruitment agency. You don't anymore. Typically you would have to sign $40,000 a year contracts with Seek to be able to post Seek ads A $12,000 a year LinkedIn one recruiter license. With LinkedIn, you don't have to sign any supplier agreements. So you now have the freedom and the flexibility to opt in to all of these premium resources without actually having to sign up and put yourself in debt or sign over hundreds of thousands of dollars worth of liabilities.
Speaker 1:And then that brings us to making sure your book's in order and making sure your finances are set. So we do your weekly bookkeeping. So that means reconciling all your accounts in your Xero accounting software accounts, payable, receivable, so invoices getting paid weekly, any expenses you've paid. We'll do your debt collection, handling legal disputes, because not getting paid is one of the biggest fears that you have in business. So unless you're proactive in chasing debt and making sure it's paid on time, yes, recruitment's very much dealing with high tier clients and global businesses, but shit can happen. So you always want to make sure that's in order and we we run a very tight ship when it comes to that.
Speaker 1:We're also your bass agents. So we do your bass GST quarterly submissions. So you know the whole bass thing and tax scares. Most people, most recruiters, small business owners, are like oh shit, I need someone smarter than me to work that out, like I don't know what this is all about. So we actually guide you through it. We teach you every part of the business, show you even what bank accounts to set up and all that type of stuff.
Speaker 2:Yeah, the best part about this and what a lot of the partners love about this particular service of ex-recruiter is they're never going to find themselves in this position where they get a nasty surprise and all of a sudden the ATO is after them for $20 million and they've got to go into administration, or they don't have a $68,000 tax bill out of nowhere and they need to scrap around to find the money.
Speaker 2:So what happens in this process is every month you'll get a cash flow report. You'll get a balance on where your bank account's at, where your transactions are at. Every quarter you'll get a formal sit down with the accountant. They'll say, hey, look, you've got a $58,000 tax bill coming up in 172 days. It's time to start putting some money aside for that in this bank account. So let's start moving some money over there in preparation for this bill coming up. So you've really got the peace of mind knowing that we've got the reins of your financial side of things for your BAS, your tax, your PAYG obligations and you'll never have this nasty surprise that a lot of people are concerned about. We'll make sure we have the finger on the pulse and you get all this advisory as part of being a part of the extra recruiting network.
Speaker 1:Yeah, and then. So, once the setup's done, now it's if you want to scale or just get better as a high performer. This is the doing part, essentially. So strategizing what that looks like where you want to be, your goals, so we, your coil system, which we go through, your pop session as well, so that's your plan on a page and your cost of ideal lifestyle really are the anchor of your business. So that's where we set them up, and a lot of the knowledge that we've gone through and the mistakes we've made, and the information and knowledge that we can pass on to our partners is the reason why they're so successful and is the reason why they have the confidence to step into business and just absolutely blow it out of the water. And absolutely it's fast-tracking.
Speaker 1:We've got multiple partners that have 10x'd what I did in my first year yeah, it's wild. So, and then, once you're up and running, it's the mentorship and the guidance that we give to you and your business so you can grow. So that means weekly masterminds every Monday we now have an East Coast one and a West Coast one, which is really exciting and monthly one-on-ones quarterlies, whatever that dynamic you want. With X Recruiter, we can help provide that. There's some recruiters that love to just do their own thing and be like hey, I'm all good, just let's celebrate once a quarter. Or there's others that we have weekly catch-ups with and they want to have their finger on the pulse and make sure they're actually progressing every single week.
Speaker 2:Yeah, like everyone works differently and what we find is some recruiters go, hey, look, I wouldn't mind some sort of like soft touch accountability where I can give you a buzz and go, hey, I've been able to achieve X, y, z this week or last week or this month or whatever it might be. So it's nice to have a sounding board, one-on-one, in a more intimate setting, over and above all the group catch-ups and workshops that we do. So to quickly touch on the scaling of the agency that Declan mentioned, usually it's kind of split into the recruiters that join XRecruiter. Half of them want to grow an agency beyond themselves, have a retirement plan, take a clip of the ticket one day and then hire people underneath them to look after the agency, and then the other half go look, you know what? I don't enjoy managing people. I don't want to have all this staff, I just want to be a high-income earner, live my life with freedom, flexibility and fulfillment, and then do the things that I'm passionate about on the side. Whether you want to scale your agency or you want to maintain your high performance one man band, so to speak business we can facilitate both and make sure you get the most out of that transition.
Speaker 2:Then on the mentoring and the masterminds, it's not all about recruitment. So we did a mastermind last week around love languages, and a week before that it was around how to save money and reinvest all this excess cash that you have from making all this money as a recruiter. Should you put it in shares, buy property in the stock market? What is your plan now that you've achieved this level of success making $300,000, $400,000, $500,000, $600,000 a year? What are you actually going to do with it? Are you going to just go buy handbags or cool cars, or are you going to reinvest it and start to compound your wealth and start to be able to build a life that you can hand down from generation? So it's all about not just setting up your agency and making money today, but it's about what you do with that moving forward. That these sessions are really really powerful for 100%.
Speaker 1:And then the culture like I'm excited as to do more events, get all the partners together and have, you know, a lot more collaboration, because the launch parties are awesome, but being able to bring everyone together, I think would be cool. So the the lunches, the trips, we've already put um, put a larger focus on it, but, um, I reckon we really amping that up would be awesome.
Speaker 2:Yeah, so you know, we went to Fiji, just um, for context, went to Fiji for the high performers at X Recruiter. You know, all the high performers went on a five day trip and enjoyed the sunlight, um, and had a blast. Uh, we do have a few things in our roadmap over the next 12 to 18 months around community events and all that kind of stuff. So as XRecruiter continues to grow and develop, we're going to have more events at the end of the year, at the end of the quarter, more collaboration opportunities, more opportunities to learn from one another and just really start to participate in the ecosystem rather than feeling like it's just as we said before, like in your spare bedroom just ripping in and not finding fulfillment. You'll actually start to become a part of an ecosystem of networking and collaboration.
Speaker 1:Yeah, 100%. And then your agency operating costs.
Speaker 2:Yeah. So a lot of people wonder how much it costs to run a recruitment agency and generally our rule of thumb is 25% of your GP. That's a really conservative estimate on how much it'll cost to run your business. So if I could give you some tangible real life, is my phone here? No, okay, oh yeah. So let me walk you through how much it would cost Everything that we've just spoken about. Let me walk you through how much it would cost Everything that we've just spoken about accounts, payable, debt collection, crm, linkedin, recruiter licenses, website operations all of this stuff that we've just spoken about is generally about 25% of your GP.
Speaker 2:If I was just going to quick maths this on my calculator, let's say, hypothetically you're a 500K biller, you're billing 500K at your agency, you're a high performer, and what does that mean to run your recruitment agency? Well, take 25% to run your business. So for your accountants, your legal, your resources, everything that we've explained, it's probably about 120 to 125 grand a year in your expenses. That's how much it'll cost you to run your business, which means, after that 25%, your net income is $375,000. If you're a $500,000 biller, let me just explain that again. If you are billing $500,000 a year. That means, after your operating expenses of running your agency with all the resources and support we've just mentioned, you will pocket $375,000.
Speaker 2:That's fucking crazy. What's more crazy than this? And this is where, were to make $375,000 a year as a PAYG employee, you'd be billing $1 to $1.5 million a year, but you'd be paying 47% tax for earning that income as a business, as a small business owner, you only pay capped flat 25%. So not only will you earn triple, you'll actually pay half the amount of tax. And that's where the gap is between being a PAYG recruiter and running your own recruitment agency under the ex-recruiter model. It's a huge, huge gap where your life starts to become really, really interesting when you get into these earning tax brackets and you've got a lot more freedom, flexibility, you've got a lot more choice and you don't have to go through this kind of feast and famine mode that all these recruiters go through because your income is just so high. Even on a bad month, you're making 20 grand.
Speaker 1:Yeah.
Speaker 2:What do you reckon about that? Dec Mate, easy life. So they're the general rule of thumb for operating costs Budget around 25% of your billings to pay for your resources. So we've also got a. If anyone's interested to kind of figure out what that looks like from a visual standpoint, we've also got a calculator on our website, xrecruiterio. We've got an earnings calculator.
Speaker 2:Now what a lot of recruiters don't tend to do is look beyond the next 12 months. It's all about quarter to quarter, year to year. What a lot of recruiters tend to kind of miss is like what does your life look like in five years? And if I was going to use the exact same scenario of that 500k biller, that 500k biller at an agency is making maybe 110, 120 grand a year and then paying 40 something percent tax on that 120 grand. So they're netting maybe 60, 70 grand a year after tax. However, if you're running your own business and you're doing 375 and paying a flat tax of 25%, the gap between your net income as a PAYG and a business owner over five years ends up being you'll have an extra $1.45 million in your bank account over a five-year period. Can you imagine just doing exactly what you're doing right now just being supported in a different structure, to have in five years, a million dollars in cash in your bank account. Honestly, I don't think people could even fathom that.
Speaker 2:A lot of recruiters don't realize what life could be like in five years if you made the decision now, and so it's really really exciting seeing the light bulb go off and a lot of recruiters and they go holy shit, hang on a second so I can earn double, triple the amount working for myself with more support than I'm getting at my existing agency as a recruiter, pay half the amount of tax and then in five years I could have a million dollars in my bank account. It seems like it's such a big step away, but really it's not. You don't even have to bill more than you are right now. It's just maintain your current billings. You don't have to work harder, work longer, do more cold calls, just keep doing what you're doing right now, and then that's the outcome. If you're a 500k biller, if you bill more than that, then time's up by whatever you actually bill. So crazy, crazy numbers there when you start to actually work out what life might look like.
Speaker 2:So how does XRecruiter make money? This is the number one question All right, so you do all this stuff for us, you provide us all this support. Yes, it costs me 25% roughly on average to run my business and all those operating expense. But what does X recruiter get? What's the cut? What do the boys make? What are the boys making?
Speaker 1:They think it's a lot bigger than what it is.
Speaker 2:Usually, when we tell people what it actually what we actually charge to run their agency, they go you're fucking kidding me, is that it? So it's a monthly subscription. It's nine, nine, seven a month. Uh, and so ultimately, if you times out by 12 months the fee for X recruiter to facilitate all of this for you including your, your resources, providing the resources, all of this it's just under $12,000 a year. So we're talking like half a placement. If your average fee is $20,000, we're talking half a placement to facilitate this.
Speaker 2:So you don't have to sign any supplier agreements. You don't have to sign any liabilities. You get access to absolutely everything your temp, temp backend, onboarding your contractors, paying your contractors weekly, making sure you get paid, following up debt collection processes, scaling your agency weekly, masterminds it's fucking crazy how much stuff that we do and a lot of people get really excited and really baffled and go, wow, okay, now I understand why you've helped over 50 recruiters start their own agency in the last 18 months. It's because of this and a lot of people don't realize the extent of the support that we offer. So hopefully that's provided some good context and that's where XRecruiter makes its money. So we make 12 grand a year off your recruiters, so it's not a great deal for allowing you to unlock triple the amount of income, paying half the amount of tax, getting the freedom, flexibility and lifestyle back.
Speaker 2:Yeah, for sure. So how long does it take?
Speaker 1:Eight to 12 weeks, depending on which package you go with.
Speaker 2:Perfect.
Speaker 2:So there's three packages. They range depending on what type of resources you need to get started ranges from 500 bucks to 10 grand. So to set up your agency to the point that we've just explained, it ranges between 500 bucks to 10 grand really not that much at all and you'll be live recruiting for yourself under your own brand within eight to 12 weeks. So hopefully that's provided a little bit of context, a little bit of insight to what we do here at XRecruiter. When you do decide, you know what this is for me. Maybe it's time to reach out. I want to see if I'm a good fit for XRecruiter. We'd love to get to know, you find out more about you, your family, your intentions, what your goals are and how we can best support you and then walk you through our discovery process to make sure it makes sense.
Speaker 2:We wouldn't ever sign someone up and help them start their own agency if it didn't make sense or if we weren't confident there was going to be a slam dunk home run. We've got 100% client success rate so far. No one's ever actually left XRecruiter and, on that note, there's no lock-in contracts. It's month to month. So if you join Xrecruiter and in 12 months time, you go, you know what, I'm happy just doing my own thing. Then you can just go and do your own thing.
Speaker 2:The reason why we've got no lock-in contracts is because we put our money where our mouth is, and if you don't want to be a part of the ecosystem, we don't want you to be a part of the ecosystem, and so it's really important for us that we have open, transparent collaboration.
Speaker 2:So in 10 months time, if you're like, hey guys, I really need help in this, this and this, it's really pissing me off, then we can go oh, mate, let's jump on this for you and remove these blockers and vice versa. The reason why it's so empowering to have a no locking contract with us helping you run your recruitment agency is because our relationship, then, is not governed by oh, I've got six months left and then I'm bouncing in six months. It's really it's month to month. We always make sure we're delivering month in, month out to make you as successful as you possibly can be and get you from billing 500K to a million, getting you from billing a million to two million running your business and being able to level up your lifestyle to the point where you get really excited.
Speaker 1:Mate how good Makes me want to start an agency again.
Speaker 2:So if anyone's interested to find out more obviously, reach out to myself, reach out to Declan. We'd love to be able to walk you through this process. If you want some more info, if you know a recruiter that you think this is suitable for, then share this info with them, because it's really exciting to be able to see recruiters change their lives, change the lives of their family, make a positive impact in their community and that's what we're all about is doing the right thing and making sure everyone succeeds together, better together. All right, that's the episode.
Speaker 2:Thanks for sharing 45 minutes of your time and listening to us ramble on over the last 45 minutes. We really appreciate you guys, and stay tuned for next week because we've got some juicy bombs to share next week the big fella's on. Thanks for tuning in to another Confessions of a Recruiter podcast with Blake and Declan. We hope you enjoyed and got a lot of value and insights out of this episode. If you do have any questions or you would like to recommend someone to come on the Confessions podcast, we would love any introductions and remember the rule of the podcast, like share and recommend it to a friend. Until next time.