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Recruitment on Emerging Markets


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Recruitment on Emerging Markets

  1. 1. Recruiter guide to... Emerging MarketsThe 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 ony Goodwin, founderT Countries such as Brazil, where group CEO of Empresaria make a massive difference to a and chief executive of three of the group’s brands, Group. “The further away from recruiter’s chances of success in Antal International, is in Marks Sattin, EMR and Laurence Anglo-Saxon culture, the more it these emerging marketplaces. typically bullish mood. Simons have offices, and Mexico, stretches the elasticity of that Kennedy relays how Grafton gotHe has just revealed plans to are not only high growth, high model,” he says. it wrong when it first set up inopen three new regional offices potential markets, there is also However, Goodwin for one China, Singapore and Hongin Poland and to float on the less competition from other believes he has an answer. “I Kong. “We sent in a WesternPolish Stock Exchange. “People agencies, says Rose. They are think it is a case of ‘think globally, management team to build thetell me I don’t understand their also increasingly profitable. act locally’ because recruitment business, but the business modelcountry,” he says. He agrees: “I Indeed, Michael Page recently is a very local activity,” he says. was entirely wrong,” he admits.don’t live there, I don’t speak the reported that profits in Brazil “Our business model is robust “Our strategy was that ‘onelanguage. But trust me, it will jumped by 73%, making the enough to work in different size fits all’, but we had nowork.” country its third most profitable. understanding of the market or Goodwin can speak from In contrast, its UK profits rose a There is a lot about the culture.”experience. After two decades of more modest 9.4%. As a consequence, Kennedyinternational expansion, his Antal Jason Kennedy, global CEO of being in control; says these countries were the firstInternational empire, with its 94 Grafton Employment Group, clients don’t like to that Grafton withdrew fromoffices in 33 countries, stretches adds that Central and Eastern during the period ofacross six continents. But even so Europe accounts for 32% of be rushed or retrenchment that followed hisGoodwin’s ambition shows no group revenue, but contributes harassed and will appointment in 2009, though thesigns of dissipating. 38% of gross profit. group has since re-established its Goodwin is one of a number of As the UK economy continues get round to it in presence in the Asia region.pioneering recruiters whose its sluggish and uncertain their own time “We have learned the hard wayambitions are not bound by journey towards recovery, South that you build a local business bygeography, but focused on America, Africa, Eastern Europe basing it round local recruiters,expanding recruitment’s far-flung and India are likely to become markets, economies and cultures, not by shipping in teams offrontiers. And as the world increasingly attractive to UK wherever they are in the world. Westerners,” he says.economy develops and recruiters as a source of revenue, “It’s not the American ‘my way Grafton now sticks to amodernises, and the use of and ultimately profits. or the highway’ approach, but a partnership approach with localexternal recruiters becomes However, while a Nottingham more British way of approaching companies, says Kennedy. As hemore accepted, such recruiter may find opening a new it,” he adds. explains, the deal is that in returnopportunities are continuing branch in Norwich relatively Rose has come to a similar for access to Grafton’s range ofto grow. straightforward, expanding into conclusion, adopting the term brands, its processes and its As John Rose, chief executive of Nigeria, for example — well, that ‘glocal’ — a word dreamt up by a technology, the local partnersFiveTen Group [510m km sq could be said to be of a whole colleague to describe FiveTen’s provide an understanding of theequals the area of the world’s new world order. approach. “More local than local market.surface] explains, the world is a The first question any recruiter global because we can adapt our This leaves Kennedy’s own rolebig place, but the prize for those with an eye on recruitment’s particular business model to the and that of his seniorrecruiters brave enough to frontier regions needs to ask is particular market,” he says. management team asventure off the beaten track is how well their existing business Certainly, the way you go about ambassadors for the Graftoneven bigger. model travels, says Miles Hunt, your expansion overseas can brand, helping to instil staff,30 Recruiter 20 April 11
  2. 2. Recruiter guide to... they are, with Grafton’s “a fairly vibrant market”, with twovalues of “passion and international executive searchcommitment”, he explains. firms already based there. The Understanding the cultural Big Four accountancy firms areand social mores of a new also key players in the market,country is hugely important taking advantage of their contactsto doing business, agrees with existing clients to placeEmpresaria’s Hunt. candidates in prestigiousWhereas in the US, he says, institutions, such as the Nigerianphysical contact and Stock Exchange.emotion is actively However, recruiters such asdiscouraged, “in contrast, Michael Page, Antal and Adeccoa trip to Chile and are also active in Nigeria, he says.Argentina involves Duru advises UK recruiters tocustomary hugging and hire staff already working inbackslapping”, though Nigeria. Referring to himself ashe notes only one kiss on an example, he says: “I have builtthe cheek. “I almost wear 12 new relationships, and networks, and Ia different hat depending clients. “It’s can talk to someone who knowson the country,” he adds. about personal someone.” He adds: “There is a Pedro Amaral relationships,” she says, lot of ‘who you know’ inDinkhuysen, group although less so than when recruitment in Nigeria.”managing director of doing business in the Middle Language is also important,FiveTen Group, is East, she adds. says Dinkhuysen. He advisesresponsible for the According to Drysdale, there is recruiters not to bring foreigncompany’s South huge respect for senior people in staff into a country as theirAmerican operation. the marketplace in Africa. And “number one” unless theyThere is great emphasis while in the UK it might be understand the local language.on the personal in the adds value accepted practice to try to hurry- “This is particularly important forregion, he says: “It’s about to their up hirers’ decision making when business development,” he adds.remembering birthdays, business. an outstanding candidate That said, even in countriestalking about their families Laura Drysdale, become available, this is unlikely such as Chile and Colombia, thatand their futures.” Having dinner chief operating officer to wash in Africa. “There is a lot from a recruitment perspectivewith clients twice a week is not at Change Recruitment Group, about being in control; clients are less advanced than Brazil orunusual, he adds. visited Africa on a business trip don’t like to be rushed or Mexico, speaking English is not While he admits this is time- earlier this year. Drysdale and harassed and will get round to it uncommon, says Dinkhuysen.consuming, it is well worth it, he her team visited clients in in their own time when they are These countries are alsosays, when the prize is to Gaborone (Botswana), ready,” says Drysdale. business friendly, he says, with abecome accepted by clients as a Johannesburg and Nairobi, Chinedu Duru, country manger fair sprinkling of clients and“trusted HR executive” in a generating 61 new vacancies in of Pedersen & Partners in colleagues holding MBAs. Lposition to give clients advice that HR, accountancy and sales, and Nigeria, describes the country as Smaller markets such as Chile20 April 11 Recruiter 31
  3. 3. Connecting the best talent to the worldsbest organisations in emerging marketsEXECUTIVESEARCHHUMANCAPITALSOLUTIONSTALENTMAPPINGSERVICESBOARDSOLUTIONSINTERIMMANAGEMENT For more information, contact
  4. 4. COMMUNITY CONTENT OPINION Guide To New Territories Mark Hamill, Global MD with SpenglerFox S penglerFox, the globally networked headquartered and so, this is where decisions across the region. This partnership has steadily executive search and human capital are made. We have learnt from experience that it evolved over the past two years where we are solutions firm, are specialists in finding is vital that we consult and partner with now currently engaging in potential acquisition talent for emerging markets and business critical companies at this early decision making stage. conversations, which will fast track our presence roles. As part of the Grafton Employment Group, in Asia considerably. In larger emerging markets like China, India and which has been operating since 1982, SpenglerFox Brazil, we specialise in developing local Looking to the future, at SpenglerFox we not only is globally networked and so has a unique view of partnerships with a local player so we can have the internal talent and the passion to delve the world that is both global and local, creating a instantly make an impact in the market. Local further and deeper into the emerging markets new approach to finding and nurturing talent. partnerships provide us with the local expertise but we also have the commitment to ensure that Organisations based all over the globe are from the get go and we in turn can provide the we deliver in each market we enter. feverishly competing for senior level talent who very best international talent via our global Our current strategy for 2011/2012 includes have numerous options and high expectations. market mapping and talent monitoring services. ongoing development of our hubs in China and This takes on particular urgency in emerging In smaller emerging markets like Vietnam and Brazil as well as establishing a base in South markets, where employees can quickly and easily Indonesia it is possible to play a more pioneering Africa, the regional hub for Sub Sahara. The move to global competitors or local companies that role when entering these markets. Expanding market here is competitive and not booming as appear to offer greater overall rewards. organically into these markets is easier for us; such, however a number of sectors have As an entrepreneurial and fast-moving executive search by nature has low set-up costs significant growth which is expected to further organisation we must go where the growth is and and lower barriers to entry. It’s vital to really accelerate gradually in the next five years. South currently, 80% of global economic growth forecast understand the local market and do your Africa is a great starting point to build for 2011 will come from emerging markets. Last research to understand fully the influencers, the relationships at a regional level. Kenya is year emerging markets experienced 7.4% growth risks, and the political, economic, social and another focus as it is the undisputed hub for and a further 6.4% is projected for this year alone. regulatory environments. business and finance in East Africa. The size of While China is the fastest growing large economy, its economy and population make it an important Without a doubt there are challenges in terms of almost half of the top 12 fastest growing market in Sub-Saharan African terms. operating within these newer markets with the economies are in Africa. political dynamics playing a key role across such And finally, Kazakhstan continues to boom due to Currently, SpenglerFox operates in Central and vast areas including North Africa at present. high commodity prices and it is one of the few Eastern Europe, Russia and CIS, Asia Pac, Corruption can still be an issue within some parts fast growing CEE economies in addition to Middle East and Africa and Latin America. We of Central Eastern Europe, however the key is to Turkey, Russia, Ukraine and Poland. Exports are have also focused our attention on extending our understand these markets and it is not a case of now booming on the back of surging energy and presence in Western Europe, most recently in one size fits all. We tried and failed in the Asian metal prices and with the Kazakhstan oil field Germany and with plans to expand into Austria market previously, however having learnt from our anticipated to start production towards the end and Switzerland in 2011. Western Europe is experiences, two years ago SpenglerFox was in a of next year, this will have a very significant where many of the multinationals that are position to reconfirm its commitment to the market medium-term impact on the country’s economy expanding into emerging markets are by partnering with a local player with four hubs 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.com20 April 11 Recruiter 33
  5. 5. Recruiter guide to... Emerging Markets Pedro Amaral Dinkhuysen, Tony Goodwin, chief group MD, FiveTen Group executive, Antal International Don’t enter these markets Our business model is robust unless you are going to take a enough to work in different consultative approach to markets, economies and business cultures, wherever they are in the worldLandColumbiastill have a largenumber of ‘Mom andPop shops’, that have consequence ofbeen doing the same growing markets is thatgeneralist recruitment for 20 recruitment becomes moreyears, says Dinkhuysen. meritocratic, says Goodwin.However, he says, this is And he warns recruiters not tochanging fast, with international fall into the trap that clients orrecruiters SThree and Robert indeed business partners on theWalters along with FiveTen recruitment industry’s frontiersGroup increasingly making their will accept second best. “Theypresence felt. will see through it immediately. According to Dinkhuysen, They want the best — the bestwhile recruitment in South business model, the bestAmerica is “still relatively used to, he warns. “You cannot technology and the best training,”immature”, many recruiters in the You build a local have the mentality that in three he says.region are making decent profits. business by basing months’ time you are going to be While the prize for thoseThat said, he says that in the it round local hitting your numbers,” he says. recruiters brave enough tocontingent low fee end of the Goodwin says that while venture beyond the industry’sindustry, competition is leading to recruiters, not by markets such as Russia are still accepted geographical comfortincreased commoditisation. shipping in teams relatively immature and zone is potentially great, the“Don’t enter these markets undeveloped, they are changing message is clear: don’tunless you are going to take a of Westerners fast. People used to recruit their underestimate the worldliness ofconsultative approach to friends in Russia, he explains. But those with whom you will bebusiness,” he advises. And as he points out in expanding doing business. And perhapsrecruiters should adopt a longer markets, “you soon run out of more importantly, the size of thetimeframe than perhaps they are friends to hire”. The natural challenge.In my experience... Miles Hunt, group CEO EmpresariaAlthough I see myself as a fairly open personality, I do tend to always a very useful topic to create some form of bond withoperate as a bit of a cultural chameleon based on experience. someone from another culture. The challenge though is toTake, for example, a trip last month. know what sport to discuss and, equally importantly, be able to I started in the US and then moved to South America. In the US talk with some knowledge about it. As a matter of course I willyou have to be very conscious of people’s space. Physical keep abreast of the performance of Boca Juniors and Rio Platacontact, whether just to emphasise a point or an emotion, is in Argentina, a subject that will interest particular audiencesactively discouraged. In contrast, a trip to Chile and Argentina in that country.involves customary hugging and backslapping (although only Another key point is to demonstrate an affinity with a localone kiss on the cheek). language. English is used widely around the world. There are In business practices you also see marked differences in few countries that you cannot operate in without knowing theapproach. In the US everyone is direct and to the point. The local language. The exceptions would be the need for Spanishfocus is on doing business and moving on. In South America in some Latin America countries, depending on the level ofthere is a far greater importance given to establishing personal involvement. Having said that, to be able to say only a fewrelationships before conducting business; one of the reasons phrases in a local language demonstrates a commitment, athat North American business culture translates with great sense of humility and an intent to engage with the local culture.difficulty. To be able to converse, even if only a few words, in the local One thing that unifies people all over the world is sport. It is language will help you enormously.34 Recruiter 20 April 11
  6. 6. COMMUNITY CONTENT OPINION Recruitment Cashflow Advice: How to Stay Afloat and Grow 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 Cashflow pressures company that used to pay 30 days after And finally... receiving an invoice may now hold off on Recruitment consultants know all about the payment for 45 or even 60 days. Before signing on the dotted line with a new pressures of cashflow. Whether it’s permanent – client, recruitment agencies should be sure they under increasing pressure to offer temp, a The evidence that late payment is on the have the finances in place to cover the gap contingent recruitment company or a temp increase is more than anecdotal. According to between invoice and payment (traditionally agency, nearly all will have to make regular an independent survey of accountancy firms where invoice finance can assist). However, you payments to staff and suppliers, as well as cover carried out on behalf of Venture, almost a can also improve your cash situation by ensuring overheads, while having to survive extended quarter of Britain’s small and medium sized that as many clients as possible pay on 30 day periods waiting for clients to pay on contracts. companies (SMEs) have seen an increase in terms. This means that those who do pay over 60 debtor days. Of those who were affected, the or 90 days will have less impact on your Recruiters commonly use invoice finance to average increase in payment time is 21 days. relieve the pressure of restricted cashflow by cashflow. Equally, you should look closely at your This kind of delay can have a serious impact credit control processes. Invoices should be providing frequent funds against unpaid on cashflow. invoices, as soon as they are issued. These sent promptly when work is completed and the services have long helped recruiters stay afloat If a business generates the greater part of its date for expected payment logged on your and grow. revenue from just a handful of large customers, system. When payment is due, it’s important to late payment by even one of them will affect the chase it. What are the key areas, then, that will amount of working capital available. The maximise the impact of an invoice finance payment for several thousand pounds that was facility and preserve cashflow, even in the due to arrive at the end of June instead makes Find out more about cashflow solutions for the most difficult of times? an appearance in the latter half of July. recruitment sector at Meanwhile, the hard-pressed business agency struggles to pay bills and meet Credit control weekly staff wages. Epulet takes off with new funding It is vitally important for recruiters to ensure It is also worth mentioning that recruiting sales are converted into cash as quickly as agencies can combine a Factoring or Invoice Cambridge-based technical recruitment specialist, possible. The key is a proactive approach to Discounting facility with Bad Debt Protection Epulet Technical Recruitment, has acquired credit control. If your customers are simply to shield against a customer failing to pay due aerospace maintenance recruitment firm paying late — rather than renegotiating longer to insolvency. with support from payment periods — then you should be taking independent Invoice and Asset Based Lender, steps to ensure they make good on their debts Venture Finance. and that they do so on time. Contractual Clarity Venture provided Epulet with a £500k Factoring As well as improving cashflow, having a All recruiting agencies should be absolutely facility along with Bad Debt Protection, releasing Factoring arrangement in place takes away the clear about the terms and conditions of any cash from its invoices to finance the deal and headache of managing a credit control customer contracts. When new customers come provide a boost to cashflow. operation. Rather than wasting valuable aboard you should ensure that you are in a The additional working capital also allowed Epulet management time chasing clients for payment, position to meet contractual obligations and are to overcome the funding gap between weekly it allows recruiters to outsource that chore to comfortable with the proposed payment terms. wages and monthly invoices, as well as service the specialists, who will provide a dedicated In an ideal world, you should be able to stipulate the increasing new business contracts coming credit controller and operate to your business’s your payment requirements, but there is always its way. As a result Epulet has been able to pursue desired style of collection. a balance of power in negotiations. In return for organic growth, winning a major new contract. a major order you may well have to swallow Stephan Smith, Managing Director at Epulet, This can mean that debts are settled much more days of credit than you would prefer. comments: “The new facility from Venture has more quickly. Credit control is a core activity for enabled us to release more cash from our assets, Factoring providers, who typically ensure that It’s also worth finding out as much as you can about your client’s processes. When do they helping us to increase our sales capacity and debts are settled on time. continue to deliver an excellent service to our process invoices? How many cheque runs do One inevitable consequence of the present they have every month and when is the money clients. This is a vital tool for business growth, economy is an increasing number of companies sent out? By knowing this you’ll have a better idea especially for a small and independent recruitment are addressing their cashflow difficulties by of when to expect payment and your cashflow company like Epulet. ” delaying payment to their suppliers. Thus, the will become more predictable as a result. Peter Ewen Managing Director DL: 01444 255000. Web: April 11 Recruiter 35