How to Double Production With Half The Cost in Recruitment

“I got into recruitment because I wanted to help people…” said no agency recruiter, ever.

When I was starting Kofi Group back in 2017 as a fully remote recruitment agency, dozens of people told me it was a terrible idea because recruiters needed an office to be successful.

I did it anyway because I worked at a large agency and saw firsthand how much money they wasted on a large office and a bunch of stuff that didn’t lead to more placements.

Then COVID happened and the world went fully remote.

Fast forward to 2020 and I had a small team that consistently achieved seven figures in revenue.

But there was one glaring problem — our labor costs were super high.

Hiring good recruiters is expensive in the USA and it’s not getting any cheaper. Overall, the market is moving toward higher base salaries/draws and smaller commissions. Good recruiters can command salaries ranging from $60–80k/yr and commissions ranging from 20–50%.

When you factor in payroll taxes, the rising cost of healthcare insurance, and LinkedIn Recruiter jacking up their prices every chance they get, the pressure is mounting on recruitment business owners.

In 2020 —

• We had a team of 4 people with a gross profit margin of around 30%
• I had to regularly jump into recruiting and business development to keep driving us forward
• We were pretty efficient at covering open roles, but we often had to turn down potential clients because we were at maximum capacity

Now in 2024 —

• We’re a team of 9 with a gross profit of 62%
• I rarely need to to source or speak with candidates and have automated business development
• We cover new roles lighting fast and can take on a lot more work

What did I change?

I stopped hiring recruiters in the USA and started hiring Virtual Talent Sourcers (and Virtual BDRs) in the Philippines

I had A TON of concerns about this, and it took me almost a year to pull the trigger, but it ended up far exceeding my expectations.

My concerns:

• Getting scammed
• How it would affect our reputation with candidates and clients
• Time zone differences
• Communication/language/culture barriers
• Internet connection issues
• Offshore people pretending to work, but not doing anything
• Crappy results…after all, you get what you pay for, right? How can someone offshore realistically compete with someone in the States?

After working with Virtual Talent Sourcers for almost 4 years — I’ve never been scammed, candidates and clients either can’t tell the difference or don’t care, the right people are willing to work according to my schedule, the right people communicate well and understand USA culture, internet connection issues are minimal, and there are systems you can put in place to ensure people are held accountable.

The most surprising thing I discovered is that the top percentile of people in the Philippines can run circles around people in the USA with the same level of experience — they value their jobs more and hustle harder but at a fraction of what it costs to hire people in the USA.

Now, before you create an Upwork account and start posting recruiter jobs in the Philippines, there are two important things to consider before hiring a virtual talent sourcer —

1. Not all offshore talent is created equal —

You need to work with the right partners and source talent from the right locations.

There are a few gems out there on Upwork, Fiverr, and similar sites but it’s very inconsistent. The majority of the virtual talent sourcers out there are freelancers and juggle multiple projects at the same time. I avoid freelancers because they lack focus, take much longer to ramp up, and don’t have the level of dedication as someone who’s focused exclusively on my business. Send me a note and I can point you in the right direction with this.

2. You need to have good systems in place for this to work —

Business Process Outsourcing companies can be a PAIN to deal with and usually have poor customer service. They also don’t teach you how to navigate key cultural differences and maximize the productivity of your virtual team.

Last I counted, I’ve interviewed 300+ Virtual Talent Sourcers from over 20 different companies and platforms.

It took me over 3 years of trial and error to build the right systems and I would have saved even more money if I knew a few things earlier on.

Here’s a 30,000-foot view of my system:

1. Screening — I ask all candidates to complete a 20-minute independent work assignment that shows me how well they can follow instructions, their eye for details, and whether they’re the kind of person who will just run with assumptions or seek clarity before working on something. The assignment currently has a 95% failure rate — most candidates fall flat on their faces (even though it’s very simple), but the ones who perform well on it almost always perform well in the role.
2. Interviewing — If they perform well on the assignment, I hop on a video call and talk through their work experience, and what’s important to them as they explore roles. I pay close attention to how they communicate, their attitude, how they respond to constructive criticism, and their coachability. It’s important to keep in mind that there are some cultural differences between the USA and the Philippines, so you have to adapt your interview style.
3. Onboarding — Extensive documentation and written, step-by-step instructions are critical. I provide visual examples, message templates, reference links, and FAQs. I also record all of my conversations with them, starting during onboarding, and share the links to the recordings so they can refer back to specific instructions.
4. Clear expectations and self-management — Each of our 4 virtual talent sourcers is required to pitch at least 50 candidates per day for our open roles. When they present a candidate to my USA team, they’re required to provide a short write-up explaining why the candidate fits all of our requirements.
5. Ongoing training and feedback — We meet for around 1 hour each week to stay in sync. I have a well-defined structure for our team meetings and have each person walk through their workflow and decision-making process. Then I open the floor for questions and address everything in a group setting. We talk through Boolean strings, companies they’re poaching from, candidates they think are good fits, and candidates they’re passing on. This shows me how well they understand the roles they’re sourcing for and gives me the chance to course correct. Having group discussions helps to encourage more questions and accelerates everyone’s learning.
6. Tools and automation — I equip and treat each virtual sourcer the same way I would if they were a full-time recruiter in the USA.
7. Incentives — This gives each person something to fight for and motivates them to stretch beyond what they would normally do.

I’m currently in the process of documenting every aspect of my system and building a resource library for other business owners.

Have you hired virtual talent sourcers before or are you considering expanding your recruitment agency offshore? I’d love to compare notes and share what I’ve learned — feel free to reach out on LinkedIn or at george@kofi-group.com

If you found this information valuable, then you may want to check out How to Automate New Client Acquisition With a Virtual BDR