What should I ask about recruiter turnover when buying a staffing firm?

Begin with a roster of recruiters, showing start dates and any exits. Look at tenure and at the revenue each person generated. Losing a top biller costs more than losing a new trainee, so ask which departures mattered most to the books.

Ask what happened to the clients and candidates tied to each person who left. Did the firm keep the accounts, or did they follow the recruiter to a competitor? Ask your lawyer what the firm’s agreements with recruiters say about solicitation, and whether those terms can pass to a new owner.

Look at the pay plan. Commission-heavy plans attract strong sellers but invite moves when a competitor offers more. Ask about how splits work, how long ramp-up takes and what support new recruiters receive. Poor onboarding often explains early exits. Talk to the current team. Ask the seller if you may meet the leading recruiters before closing. Learn what they like about the firm and what would make them leave. Consider how a retention arrangement could be handled in the purchase. Finally, check that the financial statements show recruiting, training and commission costs consistently, so you can see what turnover costs.

Key takeaways

• Review the roster by tenure and by revenue produced per recruiter.
• Find out whether departing recruiters took clients or candidates with them.
• Meet the current top recruiters and learn what would keep them.
• Check that training and commission costs are shown consistently in the books.