Keesa Schreane:

So let's jump into talking about something that is really resonating with a lot of folks now, the politics of ESG investing. You, Neil, are based in the UK.

Neil Farrell:

Yeah.

Keesa Schreane:

I'm here in the US and then we have listeners in Asia. And I'm wondering what's going on differently in those three regions that might be having an impact on hiring patterns around ESG investing?

Neil Farrell:

It's a good question, but I think ultimately it's all interlinked is the old kind of macro economic turn that America sneezes and the rest of the world catches a cold. And I think in this instance that's happened. So I don't want to talk too much about us, but it is relevant for the answer in that we, as you said, based in the UK but did a lot of work in the UK and then ended up working a lot of global asset managers globally basically.

So we ended up doing maybe 40% of our revenue in the US and the UK, Europe, even Australia and Singapore. And then last year, around March time when Russian raided Ukraine, my clients a lot smarter than I am and obviously investors knew what that meant in terms of the economy. So inflation, energy prices up, growth funds down and everybody started to cool off their hiring in ESG.

But the most profound impact, I think, the two profound impacts has been that because it's no longer doing so well from a fund perspective, the dormant quiet naysayers came quite heavily to the fore. And obviously, we all know what's happened in the US, the politics and what that has meant is that a lot of global firms are just sitting on their hands when it comes to strategy. And then if you add in the economic backdrop, but also regulation as well, it's a triple whammy perfect storm.

So it is been quite profound in terms of slowing down of hiring, but also strategy. So a lot of the biodiversity funds and hiring product specialists were put on the back burner while they look to promote people internally or rejigged their reporting process.

Keesa Schreane:

So right now, what roles are in demand, if any, that you focused on?

Neil Farrell:

It's been quieter obviously, but there is the geographical difference in the Middle East, which I think we're going on to talk about, is probably the one growth area. Even Asia now has slowed down. Obviously, climate was big for a long time in terms of hiring, but now it's mostly around regulations because if you think about it with SDR, SFDR, SEC coming out with regulations in future, I guess everybody just super paranoid that their funds do what they say they do and that they're able to deliver on time disclosures.

So it's either trying to find somebody who can put together a reporting process for all of the different kind of alphabet suit regulations or promoting someone internally. And that's probably been what we see more than anything, albeit there's still been a fair amount of hiring.

Keesa Schreane:

You mentioned promoting internally, which many firms advocate obviously. [inaudible 00:04:13] for folks who can really focus on the regulatory piece, do you see a lot more of an emphasis on part-time or interim hires as opposed to FTEs, full-time employees?

Neil Farrell:

Yeah, I think this is a bit contentious because we don't, and we know there's a big diversity problem and particularly in the investment side could be a good way to solve that. But I think firms are still at that point of, "We need to hire, we've got problems to solve, let's go," and maybe aren't able to or aren't taking control of slowing things down, looking for a different angle.

Maybe there's a bit that they wouldn't use headhunters for a part-time role, maybe that there is a bit more flexibility that you can use your network. But for sure, I think if people are approaching me now and saying, "I'm looking for part-time work," I'm saying, "We're not seeing much."

Keesa Schreane:

And also too, in terms of what you are seeing for those people who maybe don't have a background in polio management. Maybe they haven't worked for an institutional investor, are there opportunities to get in another area outside of portfolio management, outside of being an investor or is that primarily what the focus is for your team and what you're seeing?

Neil Farrell:

Stop me if this is a different point, but I think everything when it comes to probably on the integration side at least comes down to the balance of someone's knowledge and experience and ideology around sustainability versus investment. Where do they sit on that balance? On the investment side, I think it goes without saying that they want to hire people with investment experience, track record, DCF models or whatever might be the proof that they can do it.

But on the integration side, maybe a bit more flexibility and then they're saying, "Okay, if it's quite pragmatic, how's?" And they're just looking to implement some risk measures. Then probably it needs to be someone who leans more from an investment background. But if it's an impact fund where they're calculating water usage in Africa, then probably not someone from an investment background, probably from the sustainability background, but there needs to be a balance of both to get in.

I know I have some colleagues that are doing a lot of work on a diversity project to see if they can promote people into investment roles and asset managers who don't come from the traditional backgrounds, but we'd not get a huge amount of take up. I think there's a lot of will or a lot of interest, but maybe a lot of will to push it through. But on the integration side, I think it's probably easier to get in.

But I know from my LinkedIn work that there's a lot of frustration from the sustainability side that investment firms don't consider them because they don't have an investing background.

Keesa Schreane:

I love that you mentioned the integration piece. We had a fantastic conversation recently with ESG global advisors and they talked about the much needed education around what ESG investing is and how there's not one way to go about it. You mentioned impact investing. There's thematic. So really appreciate the differences there and that there might be opportunities depending on what the focus point is.

Neil Farrell:

Yeah.

Keesa Schreane:

Let's talk about your role specifically. So your journey as a recruiter, I'm wondering first of all in terms of really starting and maintaining a successful firm, tell us about how you engage with the companies, with companies and the asset management firms who are looking for candidates. What does that engagement look like? How did it start with you?

Neil Farrell:

If you'll allow me a brief kind of backdrop to Farrell Associates? So it was formed in 2010 and we used to just work with the asset managers literally doing portfolio management and research mandates. So look, we've always had a good process, always keen and willing, but probably it was just a kind normal recruitment company. It wasn't until 2000 and late 2019 when we were asked to really look at our first ESG "mandate" that we looked under the bonnet and thought, "Hang on. This is so worthwhile. This is fascinating."

My background is television as Sky Sports when I was younger and I never had a major passion for finance. But then when I thought, "Hey, here's something that could really change the world, and here's the levers to change it from the inside, it just created this huge passion within the business. And we pivoted within about two weeks. So we could some ways start it again. We were helping companies who were looking to hire their first ESG people." Because we had a very thorough process, but a big passion for the project, we were able to figure out what they were looking for and find that balance of sustainability and investing and worked well.

And then firms all over the world like I said earlier started to ask us to work with them over there and that's what we've come to you now. And how we approach it is we threw everything up in the air at the beginning. So, "Hey, I'm a recruiter." People are like, okay, they want to sell us something, they want to make money and profit. And we actually thought it doesn't really make sense. What we are as a service provider and we're looking to solve people's problems in terms of how do we find the best talent.

So for us, the mission is, look, if we can find really good people, put them into businesses we want to work with, that will allow that company to hit their sustainability targets and in return, we are part of the ecosystem. So we are not some sales firm lurking around on the murky edges. We're in the middle of it. I think people have responded very well to that, not least the team. We've got an amazing passionate, smart team that's self-motivated.

We've just changed everything that you expect from a normal recruitment companies, no KPIs and whatever else. It's cool. We approach a business like any consultancy, would come in, take time to talk us through your problem. We're the experts. We'll then go out and solve it for you. We're not going to push people or sell, we're just going to do it pragmatically. Give us a few weeks and we'll come back with the short list. And it's been really successful.

Keesa Schreane:

Wow. And you talk about being a part of the firm so they don't see you as an external salesy person, but you're part of the firm, you're really baked into it. From an operational standpoint, how do you go about establishing the connections and then just operating for those who are looking at starting a recruitment firm, what can they expect in terms of operating costs and how to really operate and grow a successful firm?

Neil Farrell:

Well, it depends what you want to do. I think I worked at a big multinational recruitment company, left to set up on my own. And then a lot of people who were leaving there who would think you'd do it, would always contact me and say, "What do I do?" Would take notes and everything else. I think really, it's understand why you want to do it. Why are you setting up on your own and what's the long term plan?

I had a terrible plan. I read a book and thought, "I'm going to go and build this big company and sell for hundreds of millions." Literally, I had no clue what I was good at, what part of the business I was going to be great at. So first you got to start off figuring out what you're good at. I'm reasonably good at the client side of things and there's other parts that I'm terrible at operationally and so on. You need people around you, you can do that rush, you've got no chance. But it took me a long time to figure that out.

But other than that, in terms of cost, the cliche with recruitment is it's not much. You can literally do it from your bedroom with a laptop and a... Well, not even a phone now, but if you forget about costs, the one thing I've learned and the one silver bullet is you need to be differentiated, right? All industry, everything now is bifurcated. You're either big and have cheap products and you do everything or you're a small and differentiated.

If you're just in the middle and you're a small big company, you're not going to survive or grow because why? What's the interest? Whereas if you're small and differentiated for us, differentiate with specialists was a game changer because now we have something interesting to talk about. I'm talking to you about sustainability rather than being a high performing leader or something, which I'm not.

Keesa Schreane:

Well, I want to hear more about the actual nuts and bolts of it. So you say either you can be a huge firm or you can be a small firm. Talk to us about some of your early experiences when you were starting up, what you saw then, what you would do differently if you knew at that point, what you know now?

Neil Farrell:

Yeah, probably just what I said is know your strengths and weaknesses. I know that's a cliche, but genuinely don't be afraid of having a weakness because if you try and be everything to everybody internally to your team, but externally to your clients, you'll come up short and it's literally a waste of time. If you're amazing at business development, then that's great. Be a business developer and have people around you who do the other stuff.

Trust people. I left my previous company to set up something different and then ended up spending seven or eight years creating a mini version of that company with all the stress and KPIs, and all the stuff I hated while I left. I just recreated it. Look after your people and trust them. And if they're the right people and they're motivated, they don't need to be prodded or pushed ever.

They just need to be set free, really. And the differentiator is so important because as a recruitment company, what I'd love to talk about the whole time is our process, but it's so boring. Nobody wants to hear about it because if you get someone in to clean your carpet, you don't want to know what the machine is doing. You just want the carpet cleaned. Not that we're carpet cleaners, but most people don't care. What they'll buy into is your passion or your story or what makes you different. And I spent ages trying to figure out what made us different. And luckily it's our passion and purpose.

Keesa Schreane:

So I want to get into actually the process 'cause I think that's where the risk might lie. And when you're bringing on a prospect, when you're working with a firm, usually there is some sort of inherent risk. I'm wondering as it relates to, it might be different in the UK with various regulations, et cetera, around human resources. But let's talk about the process and then the risk that one would have to be open to or at least be mindful of.

Neil Farrell:

As a candidate or an employer, or both?

Keesa Schreane:

As a recruiter. When you are onboarding and bringing in new talent, potential talent, are there risks that you need to be aware of from an employment perspective?

Neil Farrell:

I mean, risk is exactly the right word for a recruitment process. And in fact, if I'm pitching to a client, I tell them that our process is designed to de-risk the process because there's risks everywhere when your product is a human being. Not that people are unreliable. I think if you communicate with them in the right way, they'll tell you everything you need to know. But if you ask him perfect questions and don't get all of the data and details, you need, it won't run smoothly.

So if you're a recruiter and you're trying to run a solid process, the number one thing you need to do is understand the brief. What most recruiters do, or what most some recruiters do is go in and just say quickly, "Tell us what candidate you're looking for," and then go and spend ages trying to find that candidate.

What we do, which I think helps to de-risk the process, is say, "What's the purpose of your hire?" And tell us everything about the role that you're hiring for. So we can understand it implicitly almost as well as you do. And then we will push and pull a bit on that until we understand the blueprint. We'll then ask what candidate you're looking for. But we might then push back a bit and say, "If you're really tight around those parameters, you might miss out on a large swat of the candidate pool and you might get a B player because the A players don't see it as an attractive move because it's sideways."

Everyone is always quite open to that and says, "Okay, cool. Just do the search and show us." We then go approach people and headhunt them. I think what we find is just be really transparent with people. Don't be salesy, don't be pushy. If they're not interested, we just ask them for some time. And then rather than pitch something to them, which doesn't to me make sense, we ask them lots of questions about themselves before we say anything.

So we'll say, "Where are you? How are you doing? You enjoying it? If you did move, what would the dream role look like?" And you spend about 10 minutes going into that because if that dream role doesn't align with the mandate we're representing, it's a non-starter and we have to tell them there and then. If it does match, we then would run through it with them in kind of black and white detail, no frills, not holding anything back as transparent and clear and pragmatic as we can be so that they can make a decision.

And then actually it's more us making the decision than them because we are trying to figure out why they would want it. And if they would accept an offer towards the end of the process, that's the major de-risk. Because if you are pitching to someone, you don't know anything about them and you're talking them into something, the big risk is the more they learn about it, the less interested they become, which is the recruitment cliche of like, "Oh, they lied to me, or they changed their mind, or they let me down," but you just didn't ask the right questions. So de-risk it by being transparent and detailed.

Keesa Schreane:

I guess from a reputational perspective, you don't want to have several of those types of candidates where you present someone and then it doesn't happen. And then a few months later you present someone else and the same thing happens. Is that-

Neil Farrell:

Correct?

Keesa Schreane:

Is that accurate?

Neil Farrell:

Yeah, 100%. It's the complete opposite of what you want.

Keesa Schreane:

Yeah. Okay. So in terms of building a good reputation, is it just as simple as I put four candidates and the company likes a candidate, the candidate is happy, and there we go. Is it a 90-day sort of situation? You know what, you get a fabulous reputation when your candidate does well within the timeframe of certain number of months?

Neil Farrell:

Look, we haven't had anybody. So let's say if we changed tech fully in early 2020, we haven't had one person. I don't think leave... No, maybe a couple have left their jobs, but no one in the first 12 to 24 months. So that is pretty much our first and last thought when it comes to the search. And that's why we always say purpose, people for profit. It sounds like a catchphrase and it sounds quite salesy in its own right, but that's actually an internal saying because what I want the people in the business and what they want to do is for people to make the right decisions minute by minute, day by day.

By that, it means we do have opportunities to cut corners or to say something. I can get anybody to go to an interview. It's not difficult. You just say whatever, but that's cutting corners and we'll come back to bite you and reputation is everything. So we do everything we can to try and think, is this person in five years going to be their best ever hire? Because that's your best marketing. If you've placed someone in a great role or someone's loved the person you've placed, they're a fan. And that's a client forever until you mess up in future. Now, I'm not saying we always do that. Obviously, some are great, some are just good, some are okay, but we always aim for that.

Keesa Schreane:

What's the most important area of due diligence with both the prospects and with the company that you're work working with? The most important piece of due diligence that you need to do is what?

Neil Farrell:

They're all important, but the things that are overlooked, I would then say the most important. So at the kickoff meeting with the organization, it's the role because everybody asks about the candidate, but if you don't understand the role from top to bottom and you can't visualize it and picture where it sits in the business and what percentage of their day they're going to spend doing Excel modeling versus client management, it makes it a very different job. But if you don't get that detail and you don't translate it to people, they will get it in the process and they'll drop out when they learn it. So get that.

But it also allows you to make decisions when doing the search around where else you should look because you know what you're looking for, 'cause you understand the role. And then on the candidate side, similarly, it's very easy to have a quick chat and think, "Well, they sound great, they look amazing. This is fantastic." But if you don't have the same detail and data around what they've done, obviously why they've left jobs and so on. But more about what they've actually done day-to-day. You won't know if they're a fit or if this is a good move for them because what we are trying to think is if it's sideways or a step down, they're not going to move. So try and figure that out.

And a good one that I'm really fond of is everybody from a hiring perspective thinks that it's a big lottery. It is to a certain degree, obviously, but it doesn't have to be because someone's past behavior will tell you how they'll behave in future. Obviously, everyone says good things in interviews and fair play, there's an interview. They're scared, nervous, prepared, they want the job, so they're trying to impress you.

But if you can just pragmatically go through their background and see when they were promoted and see how they got on with their old boss and see what they did, that will tell you how they'll behave when they work for you.

Keesa Schreane:

Great points. I'm going to bring it back to something that you said earlier about looking at this and going into this because you felt that you were able to make a difference. What is the primary difference between general recruiting and recruiting in the ESG investing slash sustainability space?

Neil Farrell:

Well, I have colleagues that would say there's loads. Personally, I don't think there's anything. The difference is that we're passionate and we get to work in interesting subject matter. But at the end of the day, I think recruitment is recruitment and you have a job, you have a certain set of criteria, and if it's treasury risk then you're going to need to know treasury risk inside out. I don't know the exact example, but if it's treasury risk then you want to specialize in that. Then it's about the different permutations of experience and candidate availability of where they are and how to talk to them.

But ultimately if you ran the same process, you get the same result. It would take us longer to do that because we'd have to figure out all the jargon. On the sustainability side, it's quite straightforward because we know what it all means, and we've probably done something similar before, so we'll have a bit of a headstart. But ultimately a recruitment process should always look exactly the same every time you do it.

Keesa Schreane:

So someone who has a huge network in this area say in ESG investing and sustainability, and they are interested in helping others in their career, say they're really focused on talent development, would you advise that person consider recruiting or would you say, "You know what, there are some things that are missing. I understand you have a huge network and that's a great starting place, but you need to really start someplace else." So if talent development is an interest, they have a big network, would that be a good foundation for a recruiting career?

Neil Farrell:

Potentially. I don't want to maybe undermine what we said earlier about purpose because truly we are purpose driven, but I think a recruiter is a certain type of person. I think I've heard a lot over the years is I'm great with people or I love people or whatever, and I'm like, "That's cool, but it doesn't really do anything. Most of us are." I think, the core things and every recruitment business leader or recruiter might say something different, but the key things are probably being some sort of target driven, being hugely determined and having a lot of empathy.

So if somebody with a big network who likes to develop people has those things, then yeah. If they don't, then no, it won't work. Back to the carpet cleaner thing if a recruiter comes in, you brief them, they come back in three weeks, you speak to them every other week for a while, and then you put an offer out and it's closed, and it's like, "That was easy."

I'd hope people think that when they work with us because they don't get much stress, we just deliver. But behind the scenes, we're doing back to back 12 one-hour calls in a day going over the same brief, different time zones, clients reacting emotionally. Not acting emotionally, stuff going wrong, people changing their minds, stuff falling out. And probably what would make a successful recruiter is somebody who can handle that stuff and not get miserable and make bad decisions.

You have to be upbeat. You have to be positive. You have to always be thinking of solutions when things are going wrong, and you always have to have a plan you need to recover quickly from disaster. It's really hard. So a lot of people go in, I got to earn loads of money or a group of people. Two years later out, right? It's a very tough job, but some people love it. I worked in television, Sky Sports in London, wanted to be a TV presenter, was terrible, had a screen test and it was a car crash, so-

Keesa Schreane:

I wouldn't have thought that. I wouldn't have thought that.

Neil Farrell:

It was bad.

Keesa Schreane:

I've done a couple of these Zoom calls and presentations and I wouldn't have guess that. Go ahead.

Neil Farrell:

It just like 20 years ago. I did prepare. It was horrendous. And afterwards I was like, "Oh, you know what? I'm not going to be good at this." And I gave up very easily, which is bad, but I had a friend who's working recruitment. It's like, "Oh, you haven't loads of money. And I was young. I'm living in London, I need money. Let's go and try this." And I fell into it. Never in a million years thought I would do recruit, but I thought I'd be in advertising or marketing or whatever, and it just suited my personality. I have some empathy and EQ, very determined and very target driven, and it just worked.

Keesa Schreane:

Wow. I love that. Let's kind of switch positions. So I want to speak from the perspective of folks who are out there interviewing, who are engaging with recruiters. What is the best way for a candidate who wants to engage with a recruiter? What sort of things really stand out and what helps second candidate move forward?

Neil Farrell:

Look, I could only say what I like. So I'm not saying this is right for everybody, but it might not sound great in some respects. But if you think about it, if you have an empathic understanding that these days, you're not really the client, right? Because 20 years ago, recruitment was about having a database and you had to win candidates over. You had to go and press them and they'd be like, "Okay, I'm happy to work with you."

Whereas now everything is digital and online and people are just tapping you on the shoulder out of nowhere. So it's not really a commodity yet. Of course, we want to be friends with everybody and build relationships and be positive, but there's only so much time, so we can't talk to everybody who gets in touch. I think what really stands out is someone who understands that, and most people do these days.

There's not people who are abrasive and arrogant. That's a non-starter, obviously. But what absolutely love are people who approach very clear, very direct about what they want, and when we speak to them, they've really thought through what they're going to do. On the younger side, it's cool if they want a career chat, kind of happy to do it. But again, we're so busy, I can't be spending most of my day talking to people, hearing about what they feel and explain to them what their career might look like.

They should know what they want to do. It's not like, "Hey, yeah, I think I'm a good relationship manager, but I'm also a brilliant investor and fundamental research analyst." I'm like, "Well, they're different people." I want people to know who they are, what they want, have done some research, or if they haven't done any research, let me know that. I'm the first person they've spoken to and they're just digging around. I think just being clued up direct and clear about what you want is really important.

Keesa Schreane:

Great. Final question. Tell us something that we did not know about the future of ESG and sustainability recruiting.

Neil Farrell:

That's a really good question. Something you don't know is that it's going to recover and it has been very bad. It's going to recover, but probably not until next year. I think there's too many things that are happening concurrently, which are making people nervous, and there's been many revivals, but everybody is still sitting on their hands. I think until we have certainty around macroeconomy, certainty around the political situation in the us, which I think is probably going to be the last one to be resolved, out of all of them, uncertainty around the regulatory landscape, we're not going to grow.

So I think 2024 is going to be bounced back, but I also think that there's going to be the same terms thrown around that we saw before, war for talent and all these other things that were said before, which basically is just a way of saying there's more jobs than people. A lot of people I'm talking to are frustrated with their company's response to the political pushback, but also their lack of resource and they feel overworked.

So it's exactly the same as it was in 2021. I think is going to be in '24. Not the same level 'cause we didn't have a pandemic, but I think there will be a big churn next year.

Keesa Schreane:

And that sounds like a-

Neil Farrell:

I think.

Keesa Schreane:

Okay, great. Future tilt to look forward. So that sounds, we have the crystal ball in front of us, I know, but a great future to look toward and wonderful information on what it takes to be a successful recruiter, sustainability recruiter specifically, and even more importantly, what it takes to what characteristics you might need to get into a career of that nature. Neil Farrell, thank you so much.

Neil Farrell:

Thank you.

Keesa Schreane:

Thanks for joining us on today's episode of Climate Money Work. Please follow the show wherever you're listening right now. If you have any questions, feedback, or pitches, please get in touch with the team at cmw@shrugcontent.com. Again, that's cmw@shrug, S-H-R-U-G, content.com. Now, you can learn more about the show at keesaschreane.com/podcast. You can find me on LinkedIn, Twitter, and Instagram. I'm Keesa Schreane, and thank you for listening. Be well.