How Sterning Group is Shaking Up the Traditional Recruitment Model to Find Success
We’re thrilled to bring you the latest installment of the Recruitment Speaks Out series in which top Australian recruitment leaders share unique stories on their agency’s origins and what drives their business growth. 
Sterning Group, based in Surry Hills, Sydney, describes itself as a “progressive community of specialist recruiters sourcing hard-to-find skills for some of the world’s top companies.” The agency offers it’s recruiters a smarter way to work with an alternative model that allows them to concentrate solely on finding and placing top talent. Joseph Merz, Founder and CEO of Sterning Group, shared his thoughts about his unique group with me.
Sally Wong [SW]: Tell me about how you founded Sterning Group?
Joseph Merz [JM]: My background was in marketing and communications. I founded a small communications agency when I was about sixteen years old. I eventually sold that business and moved to Sydney. From there, I didn’t really know what I wanted to do. It was my brother who said to me, ‘why don’t you try something in recruitment?’ I got a job as a recruiter and just found so many things in the traditional model that could be improved. There were so many issues that recruitment companies were facing and they all seemed to be the same sort of problems.
I always thought recruiters could also have had a much nicer experience working so I wanted to adjust the traditional model to be more distributive. I started working on an alternative, something that I thought would be an easier way for recruiters to start their own business. It was a model that would allow recruiters to have their own business only focusing on recruitment and Sterning Group would do everything else for them. They would be free to just focus on what they knew and I’d focus on what I know, which is business. Our recruiters are able to keep way more of their money (90 percent of their billings) with us. That’s how Sterning was born.
SW: What’s your focus in the recruitment industry? In which area is your company most passionate?
JM: There wasn’t a very genuine approach from a lot of agencies. One thing that I thought could be done better was to be genuine and real, and not put on any facade of something we weren’t. I wanted to start an agency that revolved around the people who came in and our recruiters were always going to be the core.
Recruiters don’t last a long time in a lot of agencies so there’s this constant movement happening and agencies get very protective about the relationships the recruiters have built. I didn’t want it to be like that, my focus was to embrace the fact that the relationships were often held solely by the recruiter and leverage that as much as possible. I wanted to give the recruiter the power to be true to who they were (e.g., negotiating whatever they want as far as terms go), which gives a lot more freedom and in turn brings a much more genuine approach and builds much stronger relationships between themselves, their clients and candidates.
SW: Can you tell us about your company structure and how you’ve seen success with it?
JM: Sterning is a slightly different model to a traditional agency. It’s not really a standard franchise model as a lot of people may think. It’s true we utilise a licensing structure as far as contracts and things go and that makes the most sense for us.
However, our model itself is built around one idea: let our recruiters run their own businesses focusing only on recruiting. Everything else we bring to the table – the more intangible aspects to making a business run the better (eg. collaboration).
We’ve seen a lot of success with it. Recruiters can make a lot more than what they would at a traditional agency. We’ve also got a lot of things built into our model. The group buying ability we have means they’re more successful financially than they would be generally setting up on their own businesses. They get much more time with their family at home, they can work the way they want to work, we’re not pushing them to be a certain way. It’s very much around lifestyle and earning potential. I’m a huge believer in people working for themselves and creating more distributive businesses. It’s about getting them up and running as fast as possible as well. There’s a lot less risk for them, too, because there’s a partnership approach to risk. We’ll risk certain things, they’ll do the same, and together it’s all worthwhile.
SW: You now have six different brands under the Sterning Group. How do you ensure you’re attracting right consultants to the company?
JM: When we launch a new brand in a new industry that we haven’t worked with before, it’s really important that the recruiter brings strong existing client and candidate relationships with them. We also need to be mindful of maintaining our own brand when the recruiters have so much control in their divisions. It’s something that we focus on a lot. The way we do that is by finding people that are really like-minded to us in their vision.
It’s not about selling the brand because if we’re selling this to recruiters and it’s not right for them then we’re both going to lose out. It’s about trying to find the people that this is genuinely the right thing for, which means we have to be quite picky about who we bring on board. It’s also not about scaling as fast as we can, it’s about building a quality ethical brand at a pace we can maintain quality control with. We want to take a non-sales approach to this and are in it for the long term.
SW: In a recruitment market that’s generally candidate short, how do you make your brand stand out?
JM: We launched Hire Purpose, initially as more of a charitable side to Sterning. It’s now become a lot more than that. It’s a regular meet-up series for candidates to upskill their personal and professional development. We’ve found that the best candidates we deal with are constantly looking to improve their skills, they’re constantly looking to learn more. It’s the same thing for our recruiters—our top performers are always looking to learn more. We want to support that mindset as much as possible and we felt this is the way we can do that. The focus is to bring in as much quality content with lots of really practical takeaways, too, like both soft and hard skills such as leadership or how to code better if you’re a JavaScript developer. It’s all about being able to apply our sessions to real life situations. We’ll be running these across all the divisions of Sterning.
SW: Tell me about something your agency does to make sure the experience your candidate’s have with Sterning Group is the best it can possibly be.
JM: I think this ties in with our model. The main thing is every recruiter within Sterning is a business owner and operator. This means they have the power to call their own shots as far as what they’re going to do with their business. So clients and candidates are always dealing with a stakeholder, someone who genuinely has the best interests of their business at heart. They want their brand to be built in a strong way and they want it to be remembered. All the people at Sterning are in it for the long haul, so they really want to form lasting, good quality relationships.
SW: How would you like to see the recruitment industry evolve in the future from what it currently is now?
JM: The media influences a lot of younger people looking to get into business or start a business. They set really unrealistic expectations on what it’s like starting a business. We all read about these companies in Silicon Valley who go to billion-dollar evaluations in a matter of months. Younger people start to think that’s the norm and it really isn’t.
I might sound old school but it’s not worth losing your values for a pecuniary gain. I really want the industry (and society) to be more realistic with business as a whole and not so focused on the end result or concepts like ‘blitzscaling’. A lot of companies are way too preoccupied with the destination while totally forgetting about the journey. If the focus is just on the destination and end goal, then you’re not going to enjoy what you’re doing. The journey is really what it’s about, it’s where the good stuff is.
Looking for resources to help you attract and engage candidates? Check out this Candidate Engagement Toolkit for nine resources designed to help you make a lasting impression.