1. Recruiter guide to... www.recruiter.co.uk
Emerging Markets
The changing face of
global recruitment
As geographical boundaries no longer hinder recruitment,
Colin Cottell investigates the trend for recruiters to spread their
wings and open up the frontiers beyond their comfort zones
ony Goodwin, founder
T
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 got
He has just revealed plans to are not only high growth, high model,” he says. it wrong when it first set up in
open three new regional offices potential markets, there is also However, Goodwin for one China, Singapore and Hong
in Poland and to float on the less competition from other believes he has an answer. “I Kong. “We sent in a Western
Polish Stock Exchange. “People agencies, says Rose. They are think it is a case of ‘think globally, management team to build the
tell me I don’t understand their also increasingly profitable. act locally’ because recruitment business, but the business model
country,” 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 ‘one
language. But trust me, it will jumped by 73%, making the enough to work in different size fits all’, but we had no
work.” 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, Kennedy
international expansion, his Antal Jason Kennedy, global CEO of being in control; says these countries were the first
International empire, with its 94 Grafton Employment Group, clients don’t like to that Grafton withdrew from
offices in 33 countries, stretches adds that Central and Eastern during the period of
across six continents. But even so Europe accounts for 32% of be rushed or retrenchment that followed his
Goodwin’s ambition shows no group revenue, but contributes harassed and will appointment in 2009, though the
signs 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 way
ambitions are not bound by journey towards recovery, South that you build a local business by
geography, 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 of
frontiers. 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 a
modernises, and the use of and ultimately profits. or the highway’ approach, but a partnership approach with local
external recruiters becomes However, while a Nottingham more British way of approaching companies, says Kennedy. As he
more accepted, such recruiter may find opening a new it,” he adds. explains, the deal is that in return
opportunities are continuing branch in Norwich relatively Rose has come to a similar for access to Grafton’s range of
to 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 partners
FiveTen Group [510m km sq could be said to be of a whole colleague to describe FiveTen’s provide an understanding of the
equals 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 role
big place, but the prize for those with an eye on recruitment’s particular business model to the and that of his senior
recruiters brave enough to frontier regions needs to ask is particular market,” he says. management team as
venture off the beaten track is how well their existing business Certainly, the way you go about ambassadors for the Grafton
even bigger. model travels, says Miles Hunt, your expansion overseas can brand, helping to instil staff,
30 Recruiter 20 April 11

2. Recruiter guide to... www.recruiter.co.uk
wherever they are, with Grafton’s “a fairly vibrant market”, with two
values of “passion and international executive search
commitment”, he explains. firms already based there. The
Understanding the cultural Big Four accountancy firms are
and social mores of a new also key players in the market,
country is hugely important taking advantage of their contacts
to doing business, agrees with existing clients to place
Empresaria’s Hunt. candidates in prestigious
Whereas in the US, he says, institutions, such as the Nigerian
physical contact and Stock Exchange.
emotion is actively However, recruiters such as
discouraged, “in contrast, Michael Page, Antal and Adecco
a trip to Chile and are also active in Nigeria, he says.
Argentina involves Duru advises UK recruiters to
customary hugging and hire staff already working in
backslapping”, though Nigeria. Referring to himself as
he notes only one kiss on an example, he says: “I have built
the cheek. “I almost wear 12 new relationships, and networks, and I
a different hat depending clients. “It’s can talk to someone who knows
on the country,” he adds. about personal someone.” He adds: “There is a
Pedro Amaral relationships,” she says, lot of ‘who you know’ in
Dinkhuysen, 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 advises
responsible for the According to Drysdale, there is recruiters not to bring foreign
company’s South huge respect for senior people in staff into a country as their
American operation. the marketplace in Africa. And “number one” unless they
There 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 for
region, 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 countries
talking about their families Laura Drysdale, become available, this is unlikely such as Chile and Colombia, that
and their futures.” Having dinner chief operating officer to wash in Africa. “There is a lot from a recruitment perspective
with clients twice a week is not at Change Recruitment Group, about being in control; clients are less advanced than Brazil or
unusual, 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 also
says, when the prize is to Gaborone (Botswana), ready,” says Drysdale. business friendly, he says, with a
become 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.
L
position to give clients advice that HR, accountancy and sales, and Nigeria, describes the country as Smaller markets such as Chile
20 April 11 Recruiter 31

3. Connecting the best talent to the world's
best organisations in emerging markets
EXECUTIVESEARCH
HUMANCAPITALSOLUTIONS
TALENTMAPPINGSERVICES
BOARDSOLUTIONS
INTERIMMANAGEMENT
For more information, contact communications@spenglerfox.com

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.com
20 April 11 Recruiter 33

5. Recruiter guide to... www.recruiter.co.uk
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 world
L
and
Columbia
still have a large
number of ‘Mom and
Pop shops’, that have consequence of
been doing the same growing markets is that
generalist recruitment for 20 recruitment becomes more
years, says Dinkhuysen. meritocratic, says Goodwin.
However, he says, this is And he warns recruiters not to
changing fast, with international fall into the trap that clients or
recruiters SThree and Robert indeed business partners on the
Walters along with FiveTen recruitment industry’s frontiers
Group increasingly making their will accept second best. “They
presence felt. will see through it immediately.
According to Dinkhuysen, They want the best — the best
while recruitment in South business model, the best
America 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 those
That said, he says that in the it round local hitting your numbers,” he says. recruiters brave enough to
contingent low fee end of the Goodwin says that while venture beyond the industry’s
industry, competition is leading to recruiters, not by markets such as Russia are still accepted geographical comfort
increased 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’t
unless you are going to take a of Westerners fast. People used to recruit their underestimate the worldliness of
consultative approach to friends in Russia, he explains. But those with whom you will be
business,” he advises. And as he points out in expanding doing business. And perhaps
recruiters should adopt a longer markets, “you soon run out of more importantly, the size of the
timeframe than perhaps they are friends to hire”. The natural challenge.
In my experience... Miles Hunt, group CEO Empresaria
Although I see myself as a fairly open personality, I do tend to always a very useful topic to create some form of bond with
operate as a bit of a cultural chameleon based on experience. someone from another culture. The challenge though is to
Take, 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 will
you have to be very conscious of people’s space. Physical keep abreast of the performance of Boca Juniors and Rio Plata
contact, whether just to emphasise a point or an emotion, is in Argentina, a subject that will interest particular audiences
actively 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 local
one 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 the
approach. In the US everyone is direct and to the point. The local language. The exceptions would be the need for Spanish
focus is on doing business and moving on. In South America in some Latin America countries, depending on the level of
there is a far greater importance given to establishing personal involvement. Having said that, to be able to say only a few
relationships before conducting business; one of the reasons phrases in a local language demonstrates a commitment, a
that 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. 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 www.venture-finance.co.uk/recruitment
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. AircraftEngineers.co.uk 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
peter.ewen@venture-finance.co.uk.
DL: 01444 255000. Web: venture-finance.co.uk
20 April 11 Recruiter 35