Recruiter guide to... www.recruiter.co.uk

30 Recruiter 20 April 11

Tony Goodwin, founderand chief executive ofAntal International, is intypically bullish mood.

He has just revealed plans toopen three new regional officesin Poland and to float on thePolish Stock Exchange. “Peopletell me I don’t understand theircountry,” he says. He agrees: “Idon’t live there, I don’t speak thelanguage. But trust me, it willwork.”

Goodwin can speak fromexperience. After two decades ofinternational expansion, his AntalInternational empire, with its 94offices in 33 countries, stretchesacross six continents. But even soGoodwin’s ambition shows nosigns of dissipating.

Goodwin is one of a number ofpioneering recruiters whoseambitions are not bound bygeography, but focused onexpanding recruitment’s far-flungfrontiers. And as the worldeconomy develops andmodernises, and the use ofexternal recruiters becomesmore accepted, suchopportunities are continuing to grow.

As John Rose, chief executive ofFiveTen Group [510m km sqequals the area of the world’ssurface] explains, the world is abig place, but the prize for thoserecruiters brave enough toventure off the beaten track iseven bigger.

Countries such as Brazil, wherethree of the group’s brands,Marks Sattin, EMR and LaurenceSimons have offices, and Mexico,are not only high growth, highpotential markets, there is alsoless competition from otheragencies, says Rose. They arealso increasingly profitable.

Indeed, Michael Page recentlyreported that profits in Braziljumped by 73%, making thecountry its third most profitable.In contrast, its UK profits rose amore modest 9.4%.

Jason Kennedy, global CEO ofGrafton Employment Group,adds that Central and EasternEurope accounts for 32% ofgroup revenue, but contributes38% of gross profit.

As the UK economy continuesits sluggish and uncertainjourney towards recovery, SouthAmerica, Africa, Eastern Europeand India are likely to becomeincreasingly attractive to UKrecruiters as a source of revenue,and ultimately profits.

However, while a Nottinghamrecruiter may find opening a newbranch in Norwich relativelystraightforward, expanding intoNigeria, for example — well, thatcould be said to be of a wholenew world order.

The first question any recruiterwith an eye on recruitment’sfrontier regions needs to ask ishow well their existing businessmodel travels, says Miles Hunt,

group CEO of EmpresariaGroup. “The further away fromAnglo-Saxon culture, the more itstretches the elasticity of thatmodel,” he says.

However, Goodwin for onebelieves he has an answer. “Ithink it is a case of ‘think globally,act locally’ because recruitmentis a very local activity,” he says.

“Our business model is robustenough to work in different

markets, economies and cultures,wherever they are in the world.

“It’s not the American ‘my wayor the highway’ approach, but amore British way of approachingit,” he adds.

Rose has come to a similarconclusion, adopting the term‘glocal’ — a word dreamt up by acolleague to describe FiveTen’sapproach. “More local thanglobal because we can adapt ourparticular business model to theparticular market,” he says.

Certainly, the way you go aboutyour expansion overseas can

make a massive difference to arecruiter’s chances of success inthese emerging marketplaces.Kennedy relays how Grafton gotit wrong when it first set up inChina, Singapore and HongKong. “We sent in a Westernmanagement team to build thebusiness, but the business modelwas entirely wrong,” he admits.

“Our strategy was that ‘one size fits all’, but we had nounderstanding of the market orthe culture.”

As a consequence, Kennedysays these countries were the firstthat Grafton withdrew fromduring the period ofretrenchment that followed hisappointment in 2009, though thegroup has since re-established itspresence in the Asia region.

“We have learned the hard waythat you build a local business bybasing it round local recruiters,not by shipping in teams ofWesterners,” he says.

Grafton now sticks to apartnership approach with localcompanies, says Kennedy. As heexplains, the deal is that in returnfor access to Grafton’s range ofbrands, its processes and itstechnology, the local partnersprovide an understanding of thelocal market.

This leaves Kennedy’s own roleand that of his seniormanagement team asambassadors for the Graftonbrand, helping to instil staff,

Emerging Markets

The changing face ofglobal recruitmentAs geographical boundaries no longer hinder recruitment,Colin Cottell investigates the trend for recruiters to spread theirwings and open up the frontiers beyond their comfort zones

There is a lot aboutbeing in control;clients don’t like tobe rushed orharassed and willget round to it intheir own time

REC_200411 15/4/11 15:19 Page 30

wherever they are, with Grafton’svalues of “passion andcommitment”, he explains.

Understanding the culturaland social mores of a newcountry is hugely importantto doing business, agreesEmpresaria’s Hunt.Whereas in the US, he says,physical contact andemotion is activelydiscouraged, “in contrast,a trip to Chile andArgentina involvescustomary hugging andbackslapping”, thoughhe notes only one kiss onthe cheek. “I almost weara different hat dependingon the country,” he adds.

Pedro AmaralDinkhuysen, groupmanaging director ofFiveTen Group, isresponsible for thecompany’s SouthAmerican operation.There is great emphasison the personal in theregion, he says: “It’s aboutremembering birthdays,talking about their familiesand their futures.” Having dinnerwith clients twice a week is notunusual, he adds.

While he admits this is time-consuming, it is well worth it, hesays, when the prize is tobecome accepted by clients as a“trusted HR executive” in aposition to give clients advice that

adds valueto their

business. Laura Drysdale,

chief operating officerat Change Recruitment Group,visited Africa on a business tripearlier this year. Drysdale andher team visited clients inGaborone (Botswana),Johannesburg and Nairobi,generating 61 new vacancies inHR, accountancy and sales, and

12 newclients. “It’s

about personalrelationships,” she says,

although less so than whendoing business in the MiddleEast, she adds.

According to Drysdale, there ishuge respect for senior people inthe marketplace in Africa. Andwhile in the UK it might beaccepted practice to try to hurry-up hirers’ decision making whenan outstanding candidatebecome available, this is unlikelyto wash in Africa. “There is a lotabout being in control; clientsdon’t like to be rushed orharassed and will get round to itin their own time when they areready,” says Drysdale.

Chinedu Duru, country mangerof Pedersen & Partners inNigeria, describes the country as

“a fairly vibrant market”, with twointernational executive searchfirms already based there. TheBig Four accountancy firms arealso key players in the market,taking advantage of their contactswith existing clients to placecandidates in prestigiousinstitutions, such as the NigerianStock Exchange.

However, recruiters such asMichael Page, Antal and Adeccoare also active in Nigeria, he says.Duru advises UK recruiters tohire staff already working inNigeria. Referring to himself asan example, he says: “I have builtrelationships, and networks, and Ican talk to someone who knowssomeone.” He adds: “There is alot of ‘who you know’ inrecruitment in Nigeria.”

Language is also important,says Dinkhuysen. He advisesrecruiters not to bring foreignstaff into a country as their“number one” unless theyunderstand the local language.“This is particularly important forbusiness development,” he adds.

That said, even in countriessuch as Chile and Colombia, thatfrom a recruitment perspectiveare less advanced than Brazil orMexico, speaking English is notuncommon, says Dinkhuysen.These countries are alsobusiness friendly, he says, with afair sprinkling of clients andcolleagues holding MBAs.

Smaller markets such as Chile

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3120 April 11 Recruiter

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REC_200411 15/4/11 15:19 Page 31

For more information, contact communications@spenglerfox.com

EXECUTIVESEARCH

HUMANCAPITALSOLUTIONS

TALENTMAPPINGSERVICES

BOARDSOLUTIONS

INTERIMMANAGEMENT

Connecting the best talent to the world's best organisations in emerging markets

GRAFTON:Layout 1 15/4/11 10:21 Page 32

3320 April 11 Recruiter

OPINION

Mark Hamill, Global MD with SpenglerFox

Guide To New Territories

SpenglerFox, the globally networked

executive search and human capital

solutions firm, are specialists in finding

talent for emerging markets and business critical

roles. As part of the Grafton Employment Group,

which has been operating since 1982, SpenglerFox

is globally networked and so has a unique view of

the world that is both global and local, creating a

new approach to finding and nurturing talent.

Organisations based all over the globe are

feverishly competing for senior level talent who

have numerous options and high expectations.

This takes on particular urgency in emerging

markets, where employees can quickly and easily

move to global competitors or local companies that

appear to offer greater overall rewards.

As an entrepreneurial and fast-moving

organisation we must go where the growth is and

currently, 80% of global economic growth forecast

for 2011 will come from emerging markets. Last

year emerging markets experienced 7.4% growth

and a further 6.4% is projected for this year alone.

While China is the fastest growing large economy,

almost half of the top 12 fastest growing

economies are in Africa.

Currently, SpenglerFox operates in Central and

Eastern Europe, Russia and CIS, Asia Pac,

Middle East and Africa and Latin America. We

have also focused our attention on extending our

presence in Western Europe, most recently in

Germany and with plans to expand into Austria

and Switzerland in 2011. Western Europe is

where many of the multinationals that are

expanding into emerging markets are

headquartered and so, this is where decisions

are made. We have learnt from experience that it

is vital that we consult and partner with

companies at this early decision making stage.

In larger emerging markets like China, India and

Brazil, we specialise in developing local

partnerships with a local player so we can

instantly make an impact in the market. Local

partnerships provide us with the local expertise

from the get go and we in turn can provide the

very best international talent via our global

market mapping and talent monitoring services.

In smaller emerging markets like Vietnam and

Indonesia it is possible to play a more pioneering

role when entering these markets. Expanding

organically into these markets is easier for us;

executive search by nature has low set-up costs

and lower barriers to entry. It’s vital to really

understand the local market and do your

research to understand fully the influencers, the

risks, and the political, economic, social and

regulatory environments.

Without a doubt there are challenges in terms of

operating within these newer markets with the

political dynamics playing a key role across such

vast areas including North Africa at present.

Corruption can still be an issue within some parts

of Central Eastern Europe, however the key is to

understand these markets and it is not a case of

one size fits all. We tried and failed in the Asian

market previously, however having learnt from our

experiences, two years ago SpenglerFox was in a

position to reconfirm its commitment to the market

by partnering with a local player with four hubs

across the region. This partnership has steadily

evolved over the past two years where we are

now currently engaging in potential acquisition

conversations, which will fast track our presence

in Asia considerably.

Looking to the future, at SpenglerFox we not only

have the internal talent and the passion to delve

further and deeper into the emerging markets

but we also have the commitment to ensure that

we deliver in each market we enter.

Our current strategy for 2011/2012 includes

ongoing development of our hubs in China and

Brazil as well as establishing a base in South

Africa, the regional hub for Sub Sahara. The

market here is competitive and not booming as

such, however a number of sectors have

significant growth which is expected to further

accelerate gradually in the next five years. South

Africa is a great starting point to build

relationships at a regional level. Kenya is

another focus as it is the undisputed hub for

business and finance in East Africa. The size of

its economy and population make it an important

market in Sub-Saharan African terms.

And finally, Kazakhstan continues to boom due to

high commodity prices and it is one of the few

fast growing CEE economies in addition to

Turkey, Russia, Ukraine and Poland. Exports are

now booming on the back of surging energy and

metal prices and with the Kazakhstan oil field

anticipated to start production towards the end

of next year, this will have a very significant

medium-term impact on the country’s economy

over the next decade.

As SpenglerFox grows we are always looking for experienced talent and if you would like to discuss

upcoming opportunities in emerging markets or alternatively if you are a company expanding into

emerging markets please contacts us at communications@spenglerfox.com

COMMUNITY CONTENT

REC_CC_GRAFTON_dis:Layout 1 15/4/11 12:26 Page 33

andColumbiastill have a largenumber of ‘Mom andPop shops’, that havebeen doing the samegeneralist recruitment for 20years, says Dinkhuysen.However, he says, this ischanging fast, with internationalrecruiters SThree and RobertWalters along with FiveTenGroup increasingly making theirpresence felt.

According to Dinkhuysen,while recruitment in SouthAmerica is “still relativelyimmature”, many recruiters in theregion are making decent profits.That said, he says that in thecontingent low fee end of theindustry, competition is leading toincreased commoditisation.“Don’t enter these marketsunless you are going to take aconsultative approach tobusiness,” he advises. Andrecruiters should adopt a longertimeframe than perhaps they are

used to, he warns. “You cannothave the mentality that in threemonths’ time you are going to behitting your numbers,” he says.

Goodwin says that whilemarkets such as Russia are stillrelatively immature andundeveloped, they are changingfast. People used to recruit theirfriends in Russia, he explains. Butas he points out in expandingmarkets, “you soon run out offriends to hire”. The natural

consequence ofgrowing markets is that

recruitment becomes moremeritocratic, says Goodwin. And he warns recruiters not to

fall into the trap that clients orindeed business partners on therecruitment industry’s frontierswill accept second best. “Theywill see through it immediately.They want the best — the bestbusiness model, the besttechnology and the best training,”he says.

While the prize for thoserecruiters brave enough toventure beyond the industry’saccepted geographical comfortzone is potentially great, themessage is clear: don’tunderestimate the worldliness ofthose with whom you will bedoing business. And perhapsmore importantly, the size of thechallenge.

Pedro Amaral Dinkhuysen,group MD, FiveTen GroupDon’t enter these marketsunless you are going to take aconsultative approach tobusiness

Tony Goodwin, chiefexecutive, Antal InternationalOur business model is robustenough to work in differentmarkets, economies andcultures, wherever they are in the world

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Recruiter guide to...

34 Recruiter 20 April 11

Although I see myself as a fairly open personality, I do tend tooperate as a bit of a cultural chameleon based on experience.Take, for example, a trip last month.

I started in the US and then moved to South America. In the USyou have to be very conscious of people’s space. Physicalcontact, whether just to emphasise a point or an emotion, isactively discouraged. In contrast, a trip to Chile and Argentinainvolves customary hugging and backslapping (although onlyone kiss on the cheek).

In business practices you also see marked differences inapproach. In the US everyone is direct and to the point. Thefocus is on doing business and moving on. In South Americathere is a far greater importance given to establishing personalrelationships before conducting business; one of the reasonsthat North American business culture translates with greatdifficulty.

One thing that unifies people all over the world is sport. It is

always a very useful topic to create some form of bond withsomeone from another culture. The challenge though is toknow what sport to discuss and, equally importantly, be able totalk with some knowledge about it. As a matter of course I willkeep abreast of the performance of Boca Juniors and Rio Platain Argentina, a subject that will interest particular audiencesin that country.

Another key point is to demonstrate an affinity with a locallanguage. English is used widely around the world. There arefew countries that you cannot operate in without knowing thelocal language. The exceptions would be the need for Spanishin some Latin America countries, depending on the level ofinvolvement. Having said that, to be able to say only a fewphrases in a local language demonstrates a commitment, asense of humility and an intent to engage with the local culture.To be able to converse, even if only a few words, in the locallanguage will help you enormously.

In my experience... Miles Hunt, group CEO Empresaria

Emerging Markets

You build a localbusiness by basingit round localrecruiters, not byshipping in teams of Westerners

www.recruiter.co.uk

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COMMUNITY CONTENT

3520 April 11 Recruiter

OPINION

Peter Ewen, Managing Director of Venture Finance, outlines the key cashflow solutions for recruitment firms and how to maximise the impact of an invoice finance facility

Recruitment Cashflow Advice:How to Stay Afloat and Grow

Cashflow pressuresRecruitment consultants know all about thepressures of cashflow. Whether it’s permanent –under increasing pressure to offer temp, acontingent recruitment company or a tempagency, nearly all will have to make regularpayments to staff and suppliers, as well as coveroverheads, while having to survive extendedperiods waiting for clients to pay on contracts. Recruiters commonly use invoice finance torelieve the pressure of restricted cashflow byproviding frequent funds against unpaidinvoices, as soon as they are issued. Theseservices have long helped recruiters stay afloatand grow. What are the key areas, then, that willmaximise the impact of an invoice financefacility and preserve cashflow, even in themost difficult of times?

Credit controlIt is vitally important for recruiters to ensuresales are converted into cash as quickly aspossible. The key is a proactive approach tocredit control. If your customers are simplypaying late — rather than renegotiating longerpayment periods — then you should be takingsteps to ensure they make good on their debtsand that they do so on time. As well as improving cashflow, having aFactoring arrangement in place takes away theheadache of managing a credit controloperation. Rather than wasting valuablemanagement time chasing clients for payment,it allows recruiters to outsource that chore tothe specialists, who will provide a dedicatedcredit controller and operate to your business’sdesired style of collection. This can mean that debts are settled muchmore quickly. Credit control is a core activity forFactoring providers, who typically ensure thatdebts are settled on time. One inevitable consequence of the presenteconomy is an increasing number of companiesare addressing their cashflow difficulties bydelaying payment to their suppliers. Thus, the

company that used to pay 30 days afterreceiving an invoice may now hold off onpayment for 45 or even 60 days. The evidence that late payment is on theincrease is more than anecdotal. According toan independent survey of accountancy firmscarried out on behalf of Venture, almost aquarter of Britain’s small and medium sizedcompanies (SMEs) have seen an increase indebtor days. Of those who were affected, theaverage increase in payment time is 21 days.This kind of delay can have a serious impact on cashflow. If a business generates the greater part of itsrevenue from just a handful of large customers,late payment by even one of them will affect theamount of working capital available. Thepayment for several thousand pounds that wasdue to arrive at the end of June instead makesan appearance in the latter half of July.Meanwhile, the hard-pressed business agency struggles to pay bills and meet weekly staff wages. It is also worth mentioning that recruitingagencies can combine a Factoring or InvoiceDiscounting facility with Bad Debt Protectionto shield against a customer failing to pay dueto insolvency.

Contractual Clarity All recruiting agencies should be absolutelyclear about the terms and conditions of anycustomer contracts. When new customers comeaboard you should ensure that you are in aposition to meet contractual obligations and arecomfortable with the proposed payment terms.In an ideal world, you should be able to stipulateyour payment requirements, but there is alwaysa balance of power in negotiations. In return fora major order you may well have to swallowmore days of credit than you would prefer. It’s also worth finding out as much as you canabout your client’s processes. When do theyprocess invoices? How many cheque runs dothey have every month and when is the moneysent out? By knowing this you’ll have a better ideaof when to expect payment and your cashflowwill become more predictable as a result.

And finally...Before signing on the dotted line with a newclient, recruitment agencies should be sure theyhave the finances in place to cover the gapbetween invoice and payment (traditionallywhere invoice finance can assist). However, youcan also improve your cash situation by ensuringthat as many clients as possible pay on 30 dayterms. This means that those who do pay over 60or 90 days will have less impact on yourcashflow. Equally, you should look closely at yourcredit control processes. Invoices should besent promptly when work is completed and thedate for expected payment logged on yoursystem. When payment is due, it’s important tochase it.

Find out more about cashflow solutions for therecruitment sector atwww.venture-finance.co.uk/recruitment

Managing Director peter.ewen@venture-finance.co.uk. DL: 01444 255000. Web: venture-finance.co.uk

Peter Ewen

Cambridge-based technical recruitment specialist,Epulet Technical Recruitment, has acquiredaerospace maintenance recruitment firmAircraftEngineers.co.uk with support fromindependent Invoice and Asset Based Lender,Venture Finance. Venture provided Epulet with a £500k Factoringfacility along with Bad Debt Protection, releasingcash from its invoices to finance the deal andprovide a boost to cashflow.The additional working capital also allowed Epuletto overcome the funding gap between weeklywages and monthly invoices, as well as servicethe increasing new business contracts comingits way. As a result Epulet has been able to pursueorganic growth, winning a major new contract. Stephan Smith, Managing Director at Epulet,comments: “The new facility from Venture hasenabled us to release more cash from our assets,helping us to increase our sales capacity andcontinue to deliver an excellent service to ourclients. This is a vital tool for business growth,especially for a small and independent recruitmentcompany like Epulet.”

Epulet takes off with new funding

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