It’s been an interesting month for the business of recruitment in Australia.
Earlier this month, IT specialist recruitment agency Talent International made a massive splash with their mega-event Talent Unleashed at the Museum of Contemporary Art in Sydney (check out the very slick 4 minute video of the event).
An audience of clients, contractors and TI staff were treated to a number of keynote presentations with Sir Richard Branson Q&A (whose publicly quoted speaking fee starts at $100,000) being the feature of the whole shin-dig.
Talent International Managing Director, Richard Earl, used the occasion to announce, amongst other things, a benefits package for contingent employees which he described as a ‘virtual concierge’ service for IT contractors. This offering would not only include recruitment services, but also peer networking and logistics help for relocating candidates which he said would help facilitate global job opportunities and create a ‘global IT army’. This service, Earl said, was created to provide rewards for contractor longevity and repeat business.
Earl also detailed the ongoing development of a software solution, Shareit, that would give clients access to the database of 10,000 of Talent International’s most recently employed contractors.
This massive show of confidence by Talent International came hot on the heels of other upbeat recent announcements by TI including:
- The hiring of ex-Manpower executive Chris Riley, into the role of Executive General Manager of the company’s Australia and NZ operations.
- The appointment of respected industry trainer, David Carman to drive internal leadership development, amongst other responsibilities.
- The purchase of New Zealand IT recruitment company Neal Andrews + Associates late last year.
Most impressively Earl lured former ISES/Ambit owner Peter Butterss out of his five-year retirement from the recruitment industry, subsequent to Butterss’s sale of Ambit to peoplebank for $100 million cash in 2007, to join the TI board.
To top it off, last week Earl was announced as a regional finalist in the Ernst & Young award for Young Entrepreneur of the Year.
In complete contrast, last week also saw the collapse into receivership of Boston Kennedy, a recruitment business that started life in 2002 as the Melbourne office of Carmichael Fisher until it was bought outright, and rebranded to Boston Kennedy by Carmichael Fisher Director, Sarah Kennedy in 2006. Boston Kennedy had offices in Melbourne, Sydney, Brisbane and Perth and, as of the day of their announced closure, they had 146 open vacancies listed on their website and 45 current employees (based on a LinkedIn search).
Their four stated specialisations were Executive Search & Selection, Market Intelligence, IT and Business Support. In November last year, the same month they opened their Perth office, Boston Kennedy won the SARA award for Best Executive Recruitment firm, after being that award’s Runner Up in 2011.
I noted with interest ShortList’s reporting of Sarah Kennedy’s comment on the receivership ‘Kennedy said she was disappointed, but the business’ performance had been severely affected by the “harsh” economic climate.’
The writing was on the wall mid-last year when highly regarded COO, Russell Fairbanks, resigned to ‘spend more time with his family’. Then earlier this year a raft of other senior staff departed the company and a new CFO was appointed (never a good sign when the other news surrounding such an appointment is negative).
The thing you know about a receivership (as distinct from administration) is that the business has no value as a going concern. The only thing receivers do is to sell off whatever individual assets exist for whatever price they can raise and then pay themselves, the ATO and, if there is anything left over, the employees and other unsecured creditors.
The Boston Kennedy tagline ‘Where Innovation Meets Experience’ clearly proved to be less of a value proposition for the Boston Kennedy clients (and shareholders) that it needed to be.
Without knowing anything about the Boston Kennedy business, other than what’s publicly available, I can only speculate about the specific reasons for the company’s collapse.
The contrast between the fortunes of Talent International and Boston Kennedy, starkly apparent this week, provides a convenient comparison about those recruitment agencies that will continue to grow and make a decent profit and those that will not.
Here’s what I have drawn from a brief Talent International/Boston Kennedy comparison:
- Specialise, specialise, specialise: Talent International focuses on IT and has around 150 staff. Boston Kennedy had less than 50 staff and no substantial depth in any specific specialisation.
- Develop and keep your leaders: As anybody who has tried to hire a TI leader will tell you – the leadership team are impossible to headhunt. Richard Earl understands that having leaders with a small equity stake in the business is a substantial help in keeping leaders focused, productive and loyal. By contrast Boston Kennedy had a succession of senior leaders depart over the past 12 months.
- Be brand smart: The Talent International website is visually appealing, engaging, vibrant. modern, updated constantly and is consistent with the positioning of TI as far more than just another big IT recruitment agency. Contrast this with the Boston Kennedy website that’s nothing more than an average recruitment agency website, with no attempt at engagement, no personal touch (Sarah Kennedy is the only staff member mentioned by name on the whole site, apart from the job ads) topped off with an embarrassingly bad corporate video which is impersonal in message and corporate cookie cutter in production values. It’s an abject lesson in how not to do a corporate video.
- Be bold: There’s an old saying along the lines of ‘if you stick to the middle of the road, one day you’ll get run over’. Clearly there’s no middle-of-the-road strategy for Talent International. They are undertaking initiatives (as detailed earlier) that are probably seen as aggressive or risky (stupid?) by other industry players. Richard Earl and his team have a clear vision for the future they want to create for themselves (and their stakeholders) and they are doing everything to make that future a reality. Whatever bold steps Boston Kennedy might have taken (I couldn’t find evidence of any) they clearly didn’t work.
Industry news service, ShortList, reported TI’s Richard Earl as saying at the Talent Unleashed event that recruiters had been victims of technology, rather than using it as means to improve their service. That innovative online and social media talent strategies had resulted in an increasingly commoditised recruitment process and left clients questioning the value of recruiters.
I believe Richard Earl’s comments are absolutely spot on and point very clearly to the differences between those recruitment agencies ‘waking up and smelling the coffee’ and those that are ‘still in bed’ waiting for easier times to return.
I know it’s not the easiest time to make money but I suspect the Boston Kennedy collapse is just the start of a significant period of readjustment in our sector where the gap between the winners, such as Talent International and the losers, such as Boston Kennedy, will occur faster than at any time in our industry’s history.
Watch this space.