Why do technical candidates keep turning down your offers? 

You’ve spent weeks waiting for HR to source technical talent for your team. Your other engineers are snowed under and frustrated; nothing’s getting done as fast as it should. You’re desperate to hire but everyone good seems to be taken.

You’re starting to lose faith – but you desperately need someone and tempers are starting to fray.

And then – yes! 

HR call – they’ve just got off the phone with someone who could be the perfect fit. You interview them – they’re your dream techie. You’re excited (and in no small part, relieved). You make them an offer. 

Except – fast-forward two weeks and they’ve gone quiet. You thought it was a done deal but now? Nothing. 

And then you find out. They signed with a competitor last week. 

What happened? What went wrong? 

Almost everyone has been there, unfortunately. 

The big issue is, it’s a super competitive hiring market. In both the UK and the Netherlands. 

Which means the best technical talent is in high-demand. 

In our experience, the best techies have at least three or four other opportunities on the table. And that’s for passive talent – people who were never really looking for a new role. If you’ve found an active candidate, they might be interviewing with ten or more businesses.

So you’re simply facing more competition for technical talent. That’s the market truth.

But that’s not the whole truth.  

This competition means technical salaries are inflated almost on a monthly basis. The stakes are higher. Which introduces reflection and indecision into the recruitment process – because, understandably, you don’t want to make a costly mistake. 

Especially when you might have to pay new hires 10% or 15%, even 20%, more than your current techies. 

That’s an issue because you have to get that budget signed-off. And also because, you probably need to increase wages across your team too – so they don’t get disengaged and leave. 

Scaling is expensive, whichever way you look at it. 

So suddenly, going to market isn’t easy. It’s more expensive than everyone thought and nobody’s on the same page.

And in that situation, you’re either priced-out or out-paced. 


There are three solutions. 

One – education and commitment. 

The fact is, there’s no point railing against the market truth. Yes, it’s a difficult situation but that’s the situation we’re working within. 

You can opt out if you’re not a high-growth company because you can afford to wait for the unicorn. If you’re only hiring one or two technical people a year, biding your time is fine. 

But if you need three, five, ten, twenty technical people – you need to change how you recruit. Going to market ad-hoc when you need someone will stall your growth.

What’s needed is a fundamental mindset shift. You need strong decision-making from the top-down, to pull the trigger fast and bring good people into the business.

And you need finance to be on the same page as hiring managers. You need the flexibility to move with the market and offer what’s needed. 

Two – employer brand. 

The stronger your employer brand, the more leeway you get with candidates in terms of salary and speed. Salary isn’t everything. 

You can’t afford to low-ball but you might squeak someone over the line if you’re in the right ballpark and also have an amazing employer proposition. 

Three – candidate management. 

High-growth businesses mostly work with recruitment partners – because you don’t have time to manage candidates how you need to manage them to make deals happen. 

As recruiters, we always say you work for your client up until the point you get a candidate an offer. Then you work for the candidate. Making sure their needs are met. Making sure they’ll actually accept the offer, then start the job, love the job and thrive.

The notice period is a huge danger zone for dropouts. Every single day, your new hires’ current employer is trying to persuade them to stay, offering them more money. And other businesses are trying to get them to jump ship too, offering them more money. 

We advise our clients to hold at least one company or team lunch with new technical hires during their notice period, and a night out. That’s the bare minimum, really. Plus our consultants are embedded into candidates’ lives – taking them for coffee, lunch; chatting to them a few times a week on the phone. 

That sounds like a lot of effort – because it is. But that’s what it takes to recruit top technical people. 

Arrows Group partner with some of the world’s fastest-growth businesses to elevate tech recruitment into long-term growth strategy. Let’s chat about Arrows becoming your strategic growth partner.

Does your tech interview process stop you scaling?  

If you’ve read our eBook about scaling your tech team, you’ll know interview process is one of the major hurdles that slows high-growth businesses down.  

That’s because both the UK and the Netherlands are highly candidate-driven. There’s huge competition for the best technical talent, and the best tech people are interviewing with multiple companies. 

Which means two things:

  1. Candidates have control. You’re the seller, they’re the buyer. And a slow, tedious process isn’t something most tech candidates will buy. In a candidate-driven market, the best candidate experience wins. 
  2. Your competitors are turning recruitment into a race. They know, the faster they move the more likely they’ll secure the best technical talent. And you can’t refuse to race, because candidates simply won’t wait.

Put simply, slow interview process will derail your hiring efforts. 

You’ll lose candidates when you’ve already invested time and effort interviewing. Wasted time. Time you don’t have, because the whole reason you’re hiring is to ease the burden on your team who are already working at maximum capacity. 

Which introduces a whole new concern, because overworked and stressed team members can fast become disengaged team members. And the talent market is so competitive, how long until they leave for a competitor? And before you know it, the whole team is crumbling at the seams, instead of gearing up for the next big sprint. 

Plus, a cumbersome recruitment process is almost the textbook definition of poor candidate experience. So those candidates who drop-out aren’t just accepting a role with a competitor; they’re also forming a negative opinion of you. 

Which has a compounding effect on your employer brand, which makes it more difficult to hire in the future. If this continues, you won’t be able to attract top tech talent to interview, let alone move them through the process. 

Which all means this:

Getting recruitment right really matters for growth-focussed businesses. Slow interview process doesn’t just cause frustrating and expensive drop-outs; it fundamentally hamstrings the business’ ability to compete. 

That’s the problem. Here’s what to do about it. 

Five ways to trim the fat from your tech recruitment process 

Keep it short 

There’s no one-size-fits-all interview process. But remember, your competitors are racing to make their process as fast as possible. If you aren’t even in the same ballpark, you’ll struggle to compete.

In our experience, the ideal technical recruitment process should take no longer than four weeks. Ideally two. That’s from identifying the requisition need through to having an offer accepted.

Be transparent about timelines 

Transparency is fundamental to the candidate experience. Some tech candidates will accept an offer as soon as they get one, full stop. But many are willing to wait a little (even if they have offers on the table) if they know your timeline. As long your proposition is compelling enough to wait for (that’s about employer brand). 

Remember, everyone’s in the same candidate-driven market here. Most companies wouldn’t push candidates too hard to accept an offer wait because it might risk upsetting (and then losing) the candidate. So you’ve got a little wiggle-room as long as you communicate a defined process and timeline. 

Condense interviews and bring decision-makers together 

If you’re partnering with us, you only need two interview stages because our consultants have already met (often even worked with previously) every tech candidate you’ll see. 

We help our clients condense those interviews into as short a timeframe as possible and set clearly defined decision-making timelines. For example, don’t let HR or finance become a bottleneck – hiring managers need to see candidates early but the budget and opening should be pre-agreed.  

(If you’re recruiting solo, you’re looking at three to four stages plus the bureaucracy in-between, but the point still stands). 

At the peak performance end of the spectrum, for example, is our strategic OneDayTM process. 

OneDayTM is a collaborative framework designed for businesses who can commit the time, effort and intensity needed to completely reframe recruitment. When everyone is on-side, OneDayTM culminates in a single day of interviews, and two to five technical hires. 

This ultimately becomes a recurring event to drive continuous growth, and we work towards a 2:1 interview to placement rate. It’s about more than simply condensing interviews – it’s about total commitment to the recruitment process, to deliver a faster process and better candidate experience. 

View every interview as a sales opportunity 

This is a crucial mindset shift. You’re the seller and candidates are the buyer, remember. You need to tell candidates what sets your business apart (that’s another reason to work with a strategic recruitment partner. We’re trained sales specialists who advocate for your business at every turn). 

In practice, that means you use both interview stages to test the candidate – but also to sell your opportunity. 

We generally recommend the first stage is the hiring manager, who can test for technical ability and team fit, plus someone who’s great at selling your company. Then the second stage is an HR and team interview, to test company fit but also to bring the team culture and projects to life more powerfully. 

Is your business growth hampered by discrete thinking? 

If you think about recruitment as a discrete, ad-hoc process your growth will always be disjointed, even if you dramatically shorten time-to-hire. 

A tighter recruitment process is vital. You’ll always face project-based peaks and troughs but growth should ultimately become continuous, and that takes a longer-term strategic approach to technical recruitment. 

That’s what Arrows Group help with. We partner with some of the world’s fastest-growth businesses to elevate tech recruitment and deliver sustainable, long-term growth. 

Three ways to increase diversity in your tech teams 

Diversity matters, you know that. 

You’ve heard the well-worn McKinsey stat, that companies in the top quartile for gender diversity are 15% more likely to financially outperform their peers. A figure that leaps to 35% for those in the top quartile for racial or ethnic diversity.

You know diverse teams are happier, more productive, higher performing teams. Diverse teams are more innovative teams – and nowhere does innovation matter more than high-tech.

And yet, look at your tech teams. 

Your company is rare indeed if you’ve found a true diversity balance. The Women in Technology Leadership report 2019 found nearly half of tech start-ups have no women on their leadership team, for example. 

And although the problem is global, both the Netherlands and the UK fare especially badly. The 2018 Women in Tech index finds only 16% of the tech workforce is female in NL and the UK, for instance, compared to 25% plus in countries like Australia, Romania, Bulgaria, Canada and the US. 

Increasing diversity in your tech teams is an even bigger issue when you’re a high-growth company. If you prioritise pace, you risk exacerbating your diversity problem further. You don’t want to double in size only to half in diversity.  

But scaling fast is crucial. You don’t want the business’ growth to stall because you can’t hire the engineers to support your plans. 

Here’s our perspective on increasing diversity in your tech teams, so you can scale fast – but also scale right. 

1 – Reinvest into the tech community

It would be an oversimplification to say tech’s diversity problem is all about education. But education does matter. 

PwC say only 3% of women choose a career in tech as their first choice. Nearly 80% of female students can’t name a famous female working in tech. Only 16% of female students have had a career in tech suggested (as opposed to 33% of men; that’s a difference of 106%). 

Which all adds up – only 5% of senior tech leaders are women. 

We’re talking long-term here, but you can play your part by investing into charities, projects and programs that address the accessibility of tech. 

A good example could be an apprenticeship program. Instead of hiring for ready-made senior tech people – look at bringing diverse technical talent into your business earlier, and training for success. (That’s what our FutureScaleTM program is all about). 

That way, you’d increase your long-term talent pipeline – and build-in diversity to your tech teams as you scale. Plus gain loyal employees who’ll be a more valuable asset to your business for longer. 

2 – Uncover hidden bias

Nobody likes to think they’ve got bias hiding in their people processes. But you probably do. Unconscious bias is a major and insidious issue. It stems from what the FT call “the brain’s tendency to fall back on the known and familiar when making choices”. 

Root out bias hiding in your processes, to make sure you’re attracting technical candidates from a diverse range of backgrounds and situations. 

For example:

  • Are you using gendered or implied-gendered language in your job adverts?
  • Did you unintentionally filter CVs that had certain names or backgrounds?
  • Are you filtering CVs who don’t match the implicit picture you’re imagining? 
  • Are you being too specific about candidates’ required background?
  • Are you unfairly assessing ability at interview because you like the candidate? 
  • Are you unfairly assessing ability because of candidates’ accent/appearance? 

Uncovering unconscious bias is a slow process that comes with empathetic examination of your weak spots. It helps to involve multiple people with recruitment but sometimes bias can become entrenched in your organisational culture.

In that case, working with a strategic recruitment partner can be invaluable, to help spot and solve your diversity bottlenecks as your team scales. 


3 – Assess your structures and culture

Building more diverse tech teams isn’t just about hiring more women or more people from ethnically diverse backgrounds. It’s about empowering those people to thrive, once you have hired them. 

Things like pay equality matter. The tech gender pay gap is often huge. 

(As in, the UK arms of Civica, Huawei and Siemens all paid women about 40% less than men in 2018-19. Citrix R&D paid women 77% less in bonuses). 

Value your female techies by paying them fairly, and you’ll find it easier to attract and retain those hires. 

Also think about policies like maternity leave and flexible working. If you’re an all-male leadership team you mightn’t have thought about things from the perspective of, say, a working mum.  

Or maybe you’re hiring internationally for the first time. You want new hires who settle into, not unsettle, your culture – of course. But you should still look to celebrate (not homogenise) diversity. Like, maybe new hires would appreciate days off around a different religious celebration. 

Think about how your culture manifests for diversity hires. Do people from diverse backgrounds have any visible role models? Could you build a mentor programme, to sensitively partner people from across your business? Do your managers understand cultural nuance, so they can sensitively manage performance? 

Build diversity into your culture as you scale

With diversity in tech, the industry is still miles from where we should be. That’s not about lecturing or patronising – and it’s not about discrete initiatives to hire more women or people of colour.  

It’s about building a culture of diversity into your business as you scale. Not losing what makes you unique, of course. But ensuring those values translate for diversity hires as much as they do your bulk workforce.  

That’s how you set yourself up for long-term balanced growth. 

That’s what Arrows Group help with. We help high-growth businesses find the top tech talent to help them scale – for today and for tomorrow. 

Q: When is a contractor not a contractor?

A: When HMRC deems them to actually be a company employee

This might sound like a bad joke. For contractors working in the private sector and for the companies using them, it’s about to get serious.

In May 2018, HMRC started a consultation on the enforcement of tax legislation IR35 in the private sector, ending 10 August. The intention is to get much stricter on it, starting April 2019. This will likely have major implications for contractors working through Personal Service Companies (PSC), the companies benefitting from their service (End Users) and whoever pays the contractor (Fee Payer).

Arrows Group has been working closely with our clients and contractors, helping them be clear on their responsibilities, options and create relevant solutions.

What is IR35?

IR35 is a piece of tax legislation brought in by Gordon Brown in 2000. It aims to identify whether a contractor working on an assignment for a company is a contractor or, truthfully, if they are an employee in all but name. It only applies to contractors operating through their own limited company, or PSC.

Essentially, if a contract or assignment is found to fall inside IR35, the contractor is considered to be a “disguised employee” and their income will be subject to PAYE tax and National Insurance. If it falls outside IR35, they are deemed to be a business in their own right supplying a service and can continue operating via their PSC without the deduction of PAYE and NICs.

Why is IR35 in the spotlight now?

In 2017, HMRC brought in reforms on the enforcement of IR35 in the public sector. These reforms included:

* Making the End User responsible for determining if a particular assignment falls within IR35 (n.b. the contractor can be within IR35 for one assignment and outside for another with the same End Client).

* Making liability for non-compliance flow up from the PSC to Fee Payer to End User

* Ensuring those inside IR35 have PAYE / National Insurance deducted at source

The unfortunate upshot for the public sector has been a mass cutting of independent contractors, with public sector companies worried about possible liabilities. This has meant a huge loss of talent for these companies and, ironically, increase in costs as many have had to plug the gaps with management consultants.

The expectation is the government will pursue the same reform options for the private sector from April 2019.

By thinking and planning ahead, we believe it’s completely possible to avoid the disruption that has hit the public sector.

How can you tell if a contractor is inside or outside IR35?

There are three key rules to determine if a contractor is inside or outside IR35.

1) Mutuality of obligation

If the company is obliged to offer the individual work and the individual is obliged to take it, they may be considered to be an employee.

2) Right of substitution

If the contractor cannot substitute themselves to deliver a project, they may be considered to be an employee.

3) Control

If the contractor is being managed by the end client on a daily basis, they may be considered to be an employee.

Further clarification is expected on these rules ahead of April 2019.

HMRC have suggested they will be bound by the results of their CEST online tool (Check Employee Status for Tax).

It is important to realise that IR35 is determined on an assignment by assignment basis and doesn’t apply to the individual worker – i.e. a single contractor may work on some assignments inside and some outside IR35 and have to determine their tax liabilities accordingly.

Who is liable for determining IR35?

This is one of the most frequent questions we are asked. From April 2019, the liability for paying the appropriate taxes will be with the Fee Payer and ultimately the End User.

What are the options if a contractor for an assignment is found to fall within IR35?

Many contractors think their choices are only to find work outside IR35 or become an employee, but this isn’t the case. There are actually three options open to them when assignments fall inside IR35.

1) Take on ‘deemed employment’

The contractor can actually keep working through their PSC, but they need to class the work as ‘deemed employment’ and ensure taxes are being deducted at source by the Fee Payer.

2) Work through an umbrella company

Contractors can work through an umbrella company, instead of their PSC. The umbrella company will send invoices and take on responsibility for paying PAYE and National Insurance.

3) Accept a contract of employment

There is, of course, always the option to work directly for the company under a contract of employment.

It is up to the contractor what solution they accept.

What should companies and contractors do ahead of April 2019?

Both companies and contractors should make sure they’re fully aware of the regulations and the options open to them.

Of course, there are benefits for clients and contractors of working with a workforce solutions company like Arrows Group. Our clients can be reassured that by using our workforce management solutions services to fill work, IR35 liability rests with us. We have been working with our clients on creating statements of work (SoWs) for projects for the past 7 years – i.e. creating genuine pieces of work in a construction compliant with IR35.

For our contractors, who make up around 65% of our business, we offer both advice and our preferred supplier list of umbrella companies who we audit quarterly – if the contractor wants to use that solution.

One of the other implications of the clamp down on IR35, is that it may drive up prices, as contractors mitigate their increased tax burden. This could play out as a simple increase in day rates, or a squeezing of margins across the whole chain. This is something we need to work together to resolve – the last thing the private sector wants is the exodus of talent that has taken place in the public sector.

I am absolutely on the side of HMRC. They are not looking to disrupt contractors, just find out legitimately who’s actually an employee, within the parameters of IR35. I also believe the impact will not be as high as people fear. In the government’s briefing note of May 2018, they stated their expectation that only one third of contractor assignments will fall within IR35. In the tech sector, we expect this figure to be even lower. By staying calm and talking now, we can make sure we are all prepared and have the solutions in place to keep expert contractors within companies.

If you would like more information on IR35 or are interested in knowing more about our IR35 roadshows, contact Charlie Sell on charlie.sell@arrowsgroup.com

I clearly recall my first cultural error at work. I had been in my new role as Director for the Netherlands for two months. I was still adapting to a new country, finding my feet managing our first fledgling international offshoot. There were five of us, all Dutch except me, working in a dimly-lit sous office in central Amsterdam.

It was our end-of-the-month talk. It had been an average sales month at best. With the end of quarter looming, I thought – here’s my opportunity to do a loud, rallying meeting and get the team excited for the month ahead. Exactly like we did in the UK. “OK team,” I boomed. “Here’s how we’ve done this month. Not brilliant. But it’s fine. Each one of you just needs to bill £XXX next month and we’ll be on track. It will be hard work but it will be worth it. Just think. If you make it, you’ll get £XXX in commission! That’s a lot of money!”

Pause. Wait for cheers and applause.

“Er, Charlie,” one of the team cuts in. “That’s great and all. But. We really want to understand WHY we’re doing this.”

Why? What do they mean why? Surely I had just explained the financial potential.

“The money is nice,” another one of them chipped in, “But if we reach that target, how do we compare to the rest of the company? And to other companies in the Netherlands?”

This was a crossroads moment. I had two choices. Keep conducting business in the way that had worked when I was in the UK. Or listen, and change. I chose Door B.

The changes came almost immediately. I started discussing our market share and goal within Amsterdam with them. They told me they cared more about team performance than individual results, so I switched to team targets. We created friendly internal competition between the Dutch and UK office. And from there, we made other cultural shifts. They told me they didn’t appreciate regimented office hours and break times. So we moved to a more flexible way of working. Suits were out, smart jeans and shirts in. Eventually, I even started bring my dog to work.

If you’re wondering if we did the right thing – and a vital part of this was the UK leadership giving the Dutch office the freedom to make changes – the proof, as us Brits say, is in the pudding. Financial results improved almost overnight, as did morale and a natural – as opposed to forced – work ethic. As the office started to grow, staff retention improved and we found it easier to attract new colleagues because of our genuine culture differences.

By 2014, Arrows Group international sales – now also including our new Munich office – had grown from £1.5m in 2012 to almost £9.0m per year, making us the highest entrant on the Sunday Times HSBC International Track 200.

Navigating differences between international cultures is hugely important for globalising businesses. This is true for a huge number of my clients – the UK has the most globalised ICT sector in the world according to the Economist’s ICT Globalisation Index. At the same time, a recent report suggests two thirds of senior UK business directors are worried young adults joining their company will lack the education or perspective to function in a multicultural economy.

I would love to say my positive experience in the Netherlands has given me the magic bullet for success in an international context. What it has taught me is that each country is unique, and expecting to directly export the way of working from one country to another probably won’t work.

Take my current challenge. Just over a year ago, we opened a new office in India as a means to offer our clients global staffing solutions. My first visit to the office – essentially, for cultural immersion and to get to know the team personally – was received with nothing but positive feedback. On the second visit, however, I went with a more ‘down to business’ attitude. Weeks later I received feedback from the senior manager that some of the team missed my collaborative coaching style, and thought I’d become more dictatorial. What had changed?

Nothing has changed. I just needed to push the performance button a bit more firmly. So now, I’m at that crossroads again. It’s time to listen, and balance the needs of the business against what makes different people tick.

Last year, I made one of the toughest decisions of my career when I, and my CEO, decided Arrows Group needed to close the company’s offshore centre in India. This has been a very hard process, but I am proud of the way we have carried it out from a moral and good leadership perspective.

For anyone in a similar situation, or driving any major change programme, I have shared some of my most valuable lessons.

Have the Courage of your Convictions

I returned to Arrows Group Global as Managing Director in late summer 2017 following a year’s hiatus. When I came back, I had the opportunity to thoroughly analyse business results. Over a period of several months, it became clear that there was not the anticipated return on investment from our office in India and the right thing for the business was, unfortunately, to close it.

It is easy to feel emotionally attached to an existing strategy. But, if you’ve discovered through in-depth analysis (and not as a knee-jerk reaction) that it’s not right, it’s essential to accept this finding. It was important I maintained the courage of my convictions to carry this through, putting in a change programme for the closure done in the best possible way.

Put Your People First

Once you know a major change is going to come, you have to put your people first. Think from their perspective as you go through the process of change.

Communicate Openly and Honestly

It is really important during change that people understand what is happening and why if you hope to have support for it.

The situation for Arrows Group Global is that we opened our offshore centre in India in 2014. We 100% owned it and grew it from the ground up, with the strategy of having our delivery teams run from there. In reality, it didn’t work as expected for our consulting and technology business.

The fact is, whatever improvements may come along in technology, that people buy people and relationships are built on trust, earned from meeting face to face. Our Indian office had fantastic people working there, doing a great job. But, where we thought it would take half our process time away it probably only saved us 10% as our onshore teams were still needing to meet with candidates and clients. By year three, we realised it wasn’t going to be able to add any return on investment.

My approach during the process of closing the office was to be as transparent as possible with all key stakeholders. Six months to a year before the office shut, I was very honest with the business and the Group about total company performance and what each geography was contributing. I was flying to India at least once a quarter, holding open town hall meetings. The team in India were under no false illusions about how things were going.

When the decision was ultimately taken to close the office, I put together a six-month closing plan. This included flying out to India for 72 hours and holding face-to-face consultations with each of the 70 people working there, so they could understand what was happening and ask any questions.

As well as the individuals directly affected in the Indian office, there are of course the people across the entire business to think about. Our people in the UK and the Netherlands had just adapted to having an offshore centre, it was important they had clarity on why it was closing. I presented an open book on the true costs and return. And, while there was sadness, annoyance and frustration at what was happening, everyone could clearly understand the reasons why and what was going to happen next.

Work in Consultation, not just Top Down

My biggest lesson for leaders running big change programmes is that top-down decisions are never as effective as ones made in consultation with the right people. Find the key stakeholders, who may range from the most junior graduate to senior management, and send messages openly through multiple different channels.

Understand What’s Most Important

Something like an office closure is a time of great uncertainty for those working there. It was essential to understand what people’s biggest concerns were, so we could help as much as possible.

My very trusted CFO in India, who had been through this process before, advised that being made redundant with the resulting loss of face is a big fear in India. So, we openly helped people to look for new opportunities. We found some people roles in our former sister company, ICG Medical. We also retained our complete HR Department to support this process.

Go Beyond the Legal Minimum

In India, the norm when offices are closed is that company directors turn up on Monday with letters in their hand for all employees and immediately empty the building. Legally, you just have to pay a month’s salary. I decided, morally, I did not want to do that. One of our values is people first and that applies across the business.

So, instead, we took the risk of telling the office we were closing it, but it was going to be a 3-month process. We offered everyone gratuity, which is normally reserved for those with 5+ years’ service.

Keep People if you Can

I am very excited that we are bringing eight extremely talented people from our India office to the UK and Netherlands on a global work placement scheme. These are top class individuals, and we will be delighted to keep them on board.

We are also still honouring the charitable foundation we set up, which will be run by ICG Medical.

Expect some Negativity, Listen to and Learn from it

Although I have tried to conduct our office closure in the best way, it has been no surprise during such a difficult process that we have received a small number of negative comments on Glassdoor. Although of course I’d rather there weren’t any, they provide an opportunity to listen and understand what mistakes may have been made. For example, I now know if we opened an offshore centre in the future we would absolutely relocate a few brand ambassadors from the company, as feedback tells us there was a disconnect between the Management team in India and the workforce.

Overall, I am proud on how we communicated the closure, the compensation packages and the braveness of being able to make that decision. This was a strategic decision, so you have to take the emotion out of it – but in reality, you can’t be as black and white as that, particularly when you’re in a people business. I hope I and the company have done the best we can by all our people during a tough process.

How often do you stop and reflect on the most important things you’ve learnt in your career?

I recently celebrated 12 years working for Arrows Group Global. When I joined the company in 2004, I was its first employee, working out of a small office in Clapham Common along with the two founders. Today, the company generates revenues of £100m+, has offices in London, Amsterdam and India and is in the top 20 in the Sunday Times Best Small Companies to Work For.

I have, unsurprisingly, seen a lot of changes, growth, successes and the odd miserable failure in that time. Here are my top six most valuable lessons I have learnt along the way.

1. Learn to embrace change

Change is one of life’s few certainties. Arrows Group has been through transformational change in the time I’ve worked there, evolving from a traditional recruitment business to a true consultancy.

My advice is to never see change as a roadblock and instead, try to act as a leader of change. Not every new idea has worked out. But, by approaching change with the right positive mindset, it has been easier to persuade others to follow and – when it has gone well – enjoy the results.

2. Celebrate your successes

A series of little (and big) victories have shaped and defined my career. I still remember the very first person I placed in detail. It was 50% skill and 50% luck and involved hours and hours of telephone calls (this was, after all, pre LinkedIn). It was a big moment for the business – the first deal by someone other than the two owners. I celebrated then, and I make sure I celebrate my teams’ successes now.

3. Nothing is more important than your people

One of the things I am most passionate about is helping people reach their potential. I am a huge believer in giving people the room and autonomy to be fulfilled – even if that means giving them some of the responsibilities I really enjoy myself. As a result, I have almost never had a superstar leave.

I have occasionally lost really good people because they needed something different at the time in their life. It is hard when great people go, but sometimes it is in their best interests. Then, the right thing to do is to support them on their way.

4. Joining a start-up is a recommended risk

Joining a new company, instead of a well-established business, is a gamble. I joined Arrows because I believed in the owners and their vision and I saw the growth opportunities. I can honestly say it is the best gamble I’ve ever taken.

If you want to be part of a business long-term, I would recommend joining a small growing company you can be an influencer in. There are of course flip sides – you meet more people in your industry in a big company and will probably have more structured training opportunities – but nothing takes away from pioneering something yourself.

5. Positivity and persistence are two of the most valuable personality traits

This is hardly new news, but positivity and persistence are really essential for success. Without a positive outlook, internally and externally, people won’t follow you. And persistence gets you through any setback. During the early stages of company growth, we all had to be persistent about getting out there and winning business. You can’t fall apart because of one bad month – you pick yourself up and get on with the next one.

6. What satisfies you in work evolves over time

When I first joined Arrows, I didn’t know what my career would be. I was attracted by sales and the opportunity to earn good money quickly. Today, my satisfaction comes from growing and developing business, instead of from short-term wins. I like to look year-by-year, not month-by-month.

I believe mindset and motivations change too. When I started, I worked 12-hour days or more every day. The camaraderie and energy made it worth every minute. The number of hours I work is no longer a big focus, though I still tend to do long days. I believe when people are busy counting hours, they’re missing the point of why they’re working. For me it’s about the things I want to achieve. It’s a true cliché to say you get out of work as much as you put in.

One thing that doesn’t change though: recognition. From a graduate to a director – it’s always appreciated when someone says well done. And it’s great to pass that on.

Charlie Sell is Global Director – Sales & Operations at Arrows Group International.

Follow if you would like to hear more from Charlie in the future. You can also connect with him on Twitter.

It is the age-old debate for any business. What compensation structure should you offer to keep senior managers motivated, fairly rewarded and, at the same time, encourage them to act in the best interests of the company?

The ink is now dry and the dust has settled on our budget planning process at Arrows Group Global (AGG). Almost 20 iterations later and I’m confident we have a solid plan in place.

One of the most critical issues for me during months of budget discussions has been setting the incentive plans for my management team. The consulting industry is sales-led, so it is normal from day one to offer base salaries with bonus targets. But, at a senior management level, there is an even greater expectation that part of the compensation package is linked to business performance – reflecting a higher involvement in decision-making.

Changing behaviour through compensation

Here’s a spoiler: there is no ‘one way’ for creating incentive plans. At AGG, we set bonus targets for our managers based on either EBIT or Gross Profit. I’ve worked to both myself. What experience tells me, is that the choice can make a huge difference to how people behave.

EBIT vs Gross Profit

EBIT = ‘Earnings Before Interest & Tax.’

Calculated as revenue minus expenses (excluding tax and interest). Also known as ‘operating profit’. It focuses on a company’s ability to generate earnings from operations.

Gross Profit

Total revenue / sales minus the cost of goods sold. Costs only include variable costs, like materials, equipment, contract labour etc. Costs do not include fixed costs, like rent, marketing, salaries or office supplies.

Source: Investopedia

For and against EBIT-based incentives

In my experience, EBIT-based targets drive the following positive and negative behaviours:


  • Under EBIT targets, the individual takes responsibility for the outgoing costs of the business as well as driving revenue. That means you can trust them not to be too exuberant with costs
  • They are more aligned to your interest as a shareholder – which is the bottom-line profit
  • It brings a high-level of trust. They will typically behave as though it is their own business
  • It can be very motivating for employees to have an extra sense of ownership and accountability.


  • Managers can get too sucked into operations and cost-savings instead of top-line revenue. Saving £100 on a printer isn’t important if you’re missing out on £1,000 of sales
  • Managers prone to penny-pinching won’t want to invest – e.g. in staff training or entertaining. They will think of short-term annual results, instead of the long-term importance of looking after and retaining employees.
  • Another effect of EBIT short-termism may be reluctance to hire new people as it’s an added cost, or firing people too quickly if they’re not performing

For and against gross profit-based incentives

The same exercise, but this time on the behaviours when compensation is tied to gross profit:


  • It keeps people thinking about the top-line and bringing revenue into the business
  • If someone is valuing your business – private equity companies, banks etc. – they’ll be most interested in your gross profit. So, arguably, it is better for increasing the value of your business
  • It leads to a longer-term view, looking at the growing enterprise value
  • They are more likely to hire new people and take time to train them and improve their performance


  • If EBIT compensation makes people too tight with money, gross profit can have the opposite effect. Managers may become overly generous with entertainment costs as they don’t affect their target
  • You need to have another party keep an eye on their expenditure. The behaviour is less likely to be that of someone who feels like it’s his or her business too.

A split-incentive solution

My view, having tested and worked under various types of compensation plan, is that only a small number of people should have a bonus based primarily on EBIT. It should be reserved for senior individuals who have an additional long-term motivation through, for example, equity shares.

For everyone else, they should be targeted on gross profit. Or, better yet, a split-incentive solution where, say, 80% of their bonus is from the gross profit of their team and 20% from the EBIT of the team (or company). This provides the right balance between long-term and short-term behaviours.

And finally – never under-estimate the need for a strong Finance Director, who can strike the balance between releasing money when necessary and not saying yes to every request. They will be greatly helped by a watertight budget. Which explains why we didn’t settle our budget until version 20 …

A close colleague recently sent me a quote that made me stop and think:

“People join companies to make history, not to become history.”

I wholeheartedly believe in the sentiment. As a business leader, I want to see my company and the people within it grow. But if, like me, you believe people want to make a difference in work, what is the responsibility of an employer when you realise they are not going to excel with you?

This isn’t about firing people. It’s about those ‘grey’ cases, how best to support people in their careers and how to educate and empower managers to see people as more than just assets.

Spotting the inbetweeners

You probably recognise this within your company. There are individuals who are stars, destined to be future leaders. There are disrupters, with an obviously negative impact. And then, there are a number of people who sit somewhere in the middle. Many of these can be trained and upskilled and make a valuable contribution to the organisation – and their own feeling of worth. But for some, while they might not be costing the business, they are also not thriving in the way others are.

There are always telltale signs: employees who are disengaged, not proactive, clock-watching or showing no enthusiasm. I don’t mean beware every employee who is not jumping up and down. Not everyone is extrovert. This is why managers need to understand their teams on a human as well as business level. And they have to be empowered and confident to have honest and open conversations with them.

Why managers live with the status quo

There are several reasons why managers choose not to do anything about so-so performers in their teams. It could be for selfish reasons, like the prestige of having a big team. Or, if they have an annual target based on topline numbers and not profitability, keeping a large team makes it easier to hit their target.

I believe it’s completely wrong to only look at people as assets. Great managers should also get to know their teams as individuals – the qual and the quant if you will. At Arrows Group this has been entrenched in the company, as performance reviews are based 60% on KPIs and 40% on Arrows DNA.

The manager mentor

Another reason managers might avoid taking action is a lack of confidence. Management is a big responsibility, particularly when people take it on or the first time and are in charge of young employees and graduates. They may consider that it’s always in people’s best interests to have a job – even if that job is not right for the individual.

There are several times in my career where, after open discussions, I have parted ways with people I have managed and they have gone on to do things much better suited to them – from a career in finance to returning to education. I use these examples to reassure my managers. The idea is not to empower them to fire at will. But I do want to educate them if they are keeping people for the wrong reasons.

I develop my managers to be mentors who hold open, ongoing conversations with their team. One-off confrontations don’t help as someone might just be having a bad week or month, or there could be important external factors. That’s why I believe managers should be in the same space as their teams, not locked in an office looking at spreadsheets.

People want to make history and employers should do everything they can do provide that opportunity. But, a strong leader also has to realise they might not be making history with them.