How to Become a Staffing CEO: Smart Paths to the C-suite

ThinkstockPhotos-456110931Ambition is a powerful thing. I have the privilege of working with industry leaders at the very top of their game — CEOs, CFOs, COOs, CMOs and more who are leading the human capital management industry. Here’s one important thing they all have in common: The same visionary skills they apply to leading businesses are also used to map their own rise to leadership. Are you planning your rise to the top?   

If you see senior leadership in your future, I have good news for you. This is an exciting, transformative time for the staffing industry. New models are emerging and disrupting the old — from online staffing to social recruiting. All this change offers ambitious professionals opportunities to stretch skills, learn, take on new challenges and embrace leadership roles. For years, I have helped determined professionals map their paths to staffing leadership, and in this blog post I will share a few of the insights I have gathered on what it takes to make it to the top.

PREMIUM CONTENT: 2015 List of Diversity Staffing Firms

Many Paths, Several Key Steps
Anyone who studies the bios of Fortune 500 CEOs will quickly tell you that there is not one proven path to executive leadership. That said, the staffing industry is its very own animal with qualities and processes that make it unique. To lead successfully in staffing, there are several unique qualities and experiences that are critical for aspiring executives:

Substantial P&L Responsibility In business, just as in sports, to play in the big leagues you need the numbers to prove you’re a big hitter. Managing a substantial P&L is how you do it, and it is very important experience in the staffing industry where margins can be famously low and the cyclical nature of the business requires keen financial sense. Successful P&L management for a substantial segment of business requires effective supervision and collaboration across business units—from sales and recruiting to finance, operations, etc. If you can demonstrate steady P&L growth and management, you are heading in the CEO direction.

P&L size should reflect your future aims. A $200M staffing firm is likely to seek out an executive who has managed a large P&L. It’s important to note that a $200M business in commercial staffing may be considered equivalent to a $100M business professional staffing when it comes to P&L management. The revenue may be higher in commercial, but the bottom line is EBITDA and growth over time. Leading staffing organizations want to hire CEOs who have demonstrated their ability to grow a business to the next level.

If managing a smaller, regional staffing firm is where you want to start in executive leadership, your P&L experience can be smaller yet still demonstrate the financial, strategic and collaborative skills required to lead.

Client-centric Mindset – All successful staffing CEOs spend significant time with clients, whether dealing with the complexities of delivering client solutions or selling and driving major account initiatives as the company’s senior ambassador. A strong willingness to be out in the market, face-to-face educating and supporting clients is an important trait in a staffing industry CEO. Senior leaders who lose touch with clients and step back from building those relationships will limit their advancement opportunities. A CEO must always understand the client perspective, always know how to sell staffing accounts (no matter how large or complex) and always be the most talented, informed person in the room.

A Readiness to Embrace Change & Challenge – The path to CEO is not always direct or straight up the same ladder. Take for example recent cases in which Gerard Stewart placed two first-time CEOs. Both executives had previously served as highly successful SVPs with large, global staffing firms. To advance to where they wanted to go—the CEO level—both realized they would need to take a step back in terms of P&L. However, a step back in terms of revenue is often a step forward in terms of entrepreneurialism, experience and opportunity.

While the new CEO roles put the two executives in organizations where the P&Ls they managed were smaller than they had been at their previous staffing divisions, the work they were doing was much broader and the responsibilities much bigger. Now all business units — from Finance and HR to Marketing and Legal — report into them and rely on their vision and leadership. The management responsibility is more sophisticated as is the reporting. As CEOs, they now report into a board of directors where before they answered to only one boss.

Another valuable difference is equity. As SVP of a large firm, you earn a salary, a bonus and stock options but, generally, there is no opportunity for equity. As a CEO, you often become an equity owner in the business and the advantage of a substantial financial payout.

Diversity of Experience – Healthcare recruiting challenges are far different from those in commercial staffing just as MSP solutions are far different from RPO solutions. Leaders with experience across multiple vertical markets and various types of engagements and industry technologies have a greater understanding of the marketplace and client needs. Demonstrating the ability to learn, stretch and adapt to new environments and challenges, diverse market and engagement experience is a highly attractive quality in a CEO candidate.

Entrepreneurial or Corporate: Whats Your Style?
As you build your portfolio of CEO skills and portfolios, you also need to think of the path you want to take to the c-suite. In staffing, there tends to be two paths: corporate or entrepreneurial.  For the vast majority of staffing executives, being a CEO at one of today’s largest staffing firms — Kelly Services, Manpower Adecco, Randstad — is a long shot. The world’s biggest staffing companies, just like the world’s biggest companies, tend to groom talent for the executive suite from the inside. It’s a process that takes decades.

That said, there are significant CEO opportunities at the small, mid-size and growing enterprise levels where it’s harder to groom and track leadership talent over decades. You need to make a decision about your path. Do you want to work your way up through an existing firm or do you see yourself striking out on your own one day? The key is knowing yourself and deciding which track suits your skills and goals.

The Entrepreneurial Track
The barriers to entry are pretty low for those wanting to open a staffing firm and strike out as an entrepreneur. That said, there is a window in anyone’s life where starting your business is easier. You will want to launch your start-up before you have significant personal overhead—such as dependents and location requirements.

In my experience, staffing entrepreneurs who have gained valuable corporate experience in their 20s and strike out on their own between their early and late 30s have a timing advantage. It seems to be a sweet spot where knowledge, confidence and experience are strong while the flexibility and freedom to invest wholly and passionately into a new business is still there. Of course, there are plenty of entrepreneurs who have started up outside of this window and have gone on to lead wildly successful businesses. Age is only a number after all.

Experience — also measured in numbers — is still essential for building your own staffing empire.  It’s good to get a solid 5 to 10 years at a strong staffing firm to gain a fundamental baseline of staffing and management skills. During this training period, leverage opportunities to learn new verticals, lead different organizations and get 360 degree business and industry perspective.  And remember: Don’t get too comfortable. When you have mastered an area of management, look for ways to advance or increase responsibilities. Soon enough, your resources and knowledge will be ripe for business building and you will know it’s time to strike out on your own.

The Corporate Track
While getting to the very top is challenging at a highly established firm, the opportunities to learn, grow and advance are rich and can lead to great places. Today’s leading, global firms offer senior leadership positions where an executive can manage a multi-million dollar segment of business (professional services, executive recruiting, commercial staffing, outsourcing, etc.) that is bigger than five mid-size staffing firms combined. This path allows you to rise very high at a large staffing firm, have broad leadership reach and autonomy while enjoying great career and fiscal success.

This path is also one that can lead to the CEO chair. As I discussed in my recent post on the high demand for staffing leadership skills, more businesses are searching for veteran leaders with human capital, recruitment and staffing expertise. Private equity firms want to bring in the staffing industry knowledge and tools to lead and grow smaller firms. This can be a tremendous and lucrative leadership opportunity for experienced industry executives who came up the corporate ladder and have gained the leadership experience and perspective needed to optimize and grow a smaller staffing firm.

Know Yourself, Map Your Path
There are many roads to leadership success but you have to plan and persevere, whether destination is the C-suite, your own staffing firm or any senior executive rank across the industry. Knowing yourself — your career ambitions and hopes — is essential to creating your career plan. The earlier you can identify where you want to go, the more prepared you will be for the opportunities, setbacks, trials, accomplishments and leaps of faith that come with a dynamic and successful executive management career.

MORE: How great leaders guide their teams to the summit

Lisa Maxwell

Lisa Maxwell
Lisa Maxwell is managing partner at Gerard Stewart, a global executive search firm.

Lisa Maxwell

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