Change is a constant for the recruitment industry. Poised as it is at the frontline of the employment relationship there is little that doesn’t affect the industry – economic circumstances, social change, government legislation and priorities, even the weather can impact on certain sectors. Add to this the changes experienced by every business which is seeking to grow and develop and it is clear that a business that doesn’t change will not be around for long.
Drawing on the recent impact of compliance changes, Andrew Heggie, group commercial director at Woodrow says the impact of IR35 in the public sector contractor market had a significant change impact on his company: “Placing candidates in NHS roles was our best-performing market at the time and we saw a dramatic drop in business almost overnight,” he comments. “In 12 months we saw our contract revenue from the NHS drop from 55 per cent of our gross profit to five per cent.
In the face of this challenge the business changed radically: “During this time we set up our finance division, so managed to retain staff and keep gross profit at a similar level but revenue streams changed completely,” explains Heggie. “During this change we also moved some of our most successful consultants onto new markets outside the NHS, predominantly within technology and learning. These consultants have now organically grown new revenue streams and are still some of the biggest contributors to our business.”
“Our significant expansion has brought about the biggest changes within our business,” says David Morel, CEO, Tiger Recruitment. Following 12 years as a boutique office headquartered in London, the business opened a new branch which required a huge amount of time and investment. Everything was researched beforehand – competitor landscape, target clients and logistical requirements.
“Once we had completed the groundwork and identified the right individual to run the new office, we then optimised our internal communication so existing employees were clear on why this had happened, the benefit to the business, how they could support this growth and help drive its success,” says Morel. “We needed to ensure that everyone understood and bought into the new offer, so that they could cross-sell the new business area to existing clients and candidates.”
That first change has since triggered more change with a new launch occurring every year. A private division was opened in 2016, 2017 marked the Dubai launch and 2018 saw the introduction of a hospitality division.
Grow and change
Nigel O’Donoghue, chief commercial officer and co-founder of Mason Frank International agrees that the change of expansion is always a challenge. In 14 years the company has grown from three people to nearly 2000 and from one Newcastle office to 16 worldwide locations.
“To do this, we had to make sure we had the right people on board to help us identify the best opportunities,” notes O’Donoghue. “Logistics then come into place, so when expanding we looked to places where language or location wouldn’t be an issue. That meant America for us, as the software market there is so big, followed by Europe.”
Despite radical change, O’Donoghue says several core things stayed the same. “We have always placed a lot of importance on our culture and identity. People joining the organisation have to buy into that, to believe in it, and that is what drives us forward,” he says.
“Making sure employees are invested in the company is the key to any change. If people believe in the culture, what you are doing, and want to be a part of it, it will be much easier to implement any new ideas.”
At Heat Recruitment growth and change became something more for the company. “Our eureka moment was when we started to run out of office space this year,” says Steve Preston, managing director. “It seemed to happen suddenly. Considering that in early 2017 we had 45 members of staff and at the end of 2018 we had 72 – we are now standing at 83. We realised we really needed to get forward planning in order to substantiate and accommodate the level of growth we were experiencing.”
Whilst exploring logistical options, office space and expansion ideas the company took time to appreciate the talent it had and how it wanted to hold on to that talent. “From this, the idea of updating our company values was born,” explains Preston. “They were slightly outdated, and we really wanted to reflect the ideas and innovations of our team as the foundations of our business. After all, without them, we don’t have a business.”
The company had a full, open and honest discussion with its employees, shared a few in-office beers and finally came up with the new pillars of the business: Fun, Passion, Integrity, Partnership and Excellence.
“Our significant growth allowed us to acknowledge that team involvement in critical business tasks such as drafting the values and visions of our business was integral,” says Preston. “Of course, our growth isn’t slowing, and this will be a continuous change. But if there is one thing we are sure of, the first thing to go up on the wall of our new office will be our vision and values – and that is a significant thing for us, our employees and the future talent of Heat Recruitment.”
While some companies experience change with organic growth, others grow through acquisition – requiring a very conscious management of the change ahead. Interestingly, both types of expansion show a contrast between things that are changed and elements that are retained: on the one hand this means company culture (and staff) should be appreciated and held on to, but on the other growth and change can drive a company towards a ‘best of both worlds’ for the future.
In 2007 Acorn acquired Concept Staffing. At the time Acorn’s turnover was around £17 million and the purchase represented a great change for Acorn to grow across the region which they did initially by leveraging the existing brand and reputation of Concept.
"The acquisition process allowed us all to grow,” says Karen Sharpin, former Concept Staffing employee and now Acorn’s senior operations director for the South West. “Concept’s best practices were preserved – indeed some were to taken on board across the wider UK group – and Acorn’s strategies adopted and larger resources utilised to strengthen our service. Working with a Board that facilitated this is why I and other key members of the team have stayed with Acorn.’’
In January 2013 Concept completed their transition with a name change to Acorn. Despite this change, however, the business still retained its regional independence in how it was being managed and led.
"The essence of our success is that we are able to offer bespoke recruitment services to both SMEs and larger organisations right across the West Country,” explains Sharpin. “We have the corporate security and internal support of the wider Acorn Group, and our clients consider this as providing the best of both worlds – a recruitment service that is locally run and delivered, with the added support of superb in-house marketing, quality management, accounts and HR services – giving additional confidence to employers and jobseekers alike.”
The support to change
Back in 2016 Air Energi and Swift combined to create Airswift. According to Rachel Twining, group PMO director, involving HR early on can prevent a lot of headaches around the changes required.
“HR professionals are well equipped to assist in mapping out the new organisation’s structure, communicating changes in responsibility or reporting lines in merged or newly created teams and creating transition plans,” she comments. “The M&A event may create new roles, involve some redundancies or prompt international relocations. HR professionals aid recruitment, handle employment packages and severance payments or country payments triggered by moves.”
While ensuring people within the recruitment business are happy and know what’s happening it is equally important to stay in touch with the vendors, suppliers and partners used by both former businesses. “Consolidating this list will be high on the new company’s priorities as it is a financial drain to run systems in parallel, and can lead to things falling between the gaps,” Twining says.
M&A events are difficult times from an HR and global mobility perspective. However, says Twining, the core element of M&A success boils down to one point: “create cross functional groups in every area upfront and early on, and allow them to fully focus on the change, without additional day-to-day responsibilities.”
Change is unavoidable in today’s business world, but the confusion and negative impact of change is avoidable. By attaining an overview of where the business is going, what will change radically and what will essentially stay the same, it is always possible to make the best of every change ensuring whatever happens the business will constantly improve.