Twenty two years ago I met Mark Smith when he joined my Recruitment Solutions Sydney
Mark went travelling and worked in London and
Brisbane before returning to Sydney and rejoining Recruitment Solutions.
Manda and Simon moved into leadership roles and then married.
The purchase of Recruitment Solutions by Chandler
Macleod saw the landscape change for each of them and in 2004, Mark, Manda
and Simon, decided to go into partnership with their former Recruitment
Solutions Director, Greg Savage and people2people was born. The new business
opened its doors in Market Street, Sydney on 2 February 2005.
Co-founder, Mark Smith, kindly agreed to answer my
questions about the people2people journey of the past ten years.
Ross: What was
the founding directors’ motivation for starting p2p?
Solutions Limited was bought by Chandler Macleod Group in late 2003 and, as a
result of this change, I was considering my options.
Manda and Simon were at a fund raiser with Greg
Savage in late 2004 and following a discussion they approached me again,
having declined an initial approach in 2003, to see if I wanted to join them
in a new venture.
We believed that there was a gap in the market for a
recruitment firm who valued longevity in its employees. At the time the job
market was strong, candidate short and generally very aggressive. This meant
many clients were dissatisfied with a very transactional service from
consultants, many of whom were transient. We were confident we could do
Ross: What were your
original goals for p2p and have you accomplished these goals?
Mark: At the start we
wanted to build a strong accounting and business support recruitment business
in Sydney. We achieved this, growing very quickly before being interrupted by
the GFC in late 2008. One of the most important decisions was to start
building our temporary business from the first day.
start, our temp business was slow to grow but with consistent effort and
investment, we eventually gained critical mass and it now forms 60% of our
gross margin. We are building a team of specialist temp and perm recruiters
within ten clearly defined specialisations. We have a long way to go, but we
are on our way.
Ross: In the early
days, what was the hardest aspect of running your own business, considering
the executive directors all came from the same large recruitment agency
(Chandler Macleod/Recruitment Solutions) as employees?
hardest thing was knowing that the buck stopped with you. From day one we had
to take responsibility for all aspects of the company. It is why we took
months to open our doors. We wanted to make sure we did it the right way. We
had employees on day one who were relying on us to provide them with the
tools to enable them to do their jobs well and make money.
in these tools up front was risky, but not supporting our people was even
riskier. It hurt when we were spending big money without seeing a decent
financial return but we were adamant about how we wanted to do business and
resource our employees.
service offerings did p2p start with in 2005 and how have these services
evolved over the subsequent ten years?
Mark: Our original
temp and perm accounting and business support recruitment business has grown
to ten specialisations and a small RPO business, called onsiite. More
recently, we have seen opportunities in sectors where we did not have a
presence previously, such as Supply Chain and Operations. We enter a new
market when we can exploit a niche or leverage an existing competitive
advantage. Similarly, our onsiite
business process outsourcing team was born after a client requested a
tailored service offering.
Ross: What did you do
in the early days to define and create a distinct p2p culture and how has
this evolved over the subsequent ten years?
Mark: At p2p we
started on the premise of providing a great service with integrity. We never
compromise our integrity to make a placement. This shapes our culture. As we
grew we made the decision to develop our own consultants. Our rotational
graduate program was structured to do away with specialised admin staff.
Administration is undertaken by graduates or trainees.
working in our office is either a recruitment consultant or training to be a
recruitment consultant. The management of the company is highly inclusive;
company performance, tactical and in some cases, strategic decisions are made
through consensus via our annual Strategy Day. Finally, I’ll repeat what I
say to everyone who joins p2p. “I wish I could have hired just one
normal person” – maybe that’s our culture!
Ross: p2p are well
known as having a ‘grow your own’ approach to hiring its own recruitment
consultants. Why did you do take this approach, how well has it worked and
what have been the most significant learnings along the way?
Mark: When we started
to grow, we did decide to also grow and develop our own consultants. We did
this because we had trained new consultants previously but also at that time
we were unable to hire experienced consultants as they didn’t want to join a
‘start up’! Now, ten years on, it is clear that this is one of the best
decisions we have made. The managers of three of our teams have come through
program enhances our culture and instills loyalty as shown through 18 of our
50 people (36%) having been with the company over
five years. Our consultant turnover last year was just 6%. The
graduate program is not the only reason for this, but it is a big part of it.
People are able to have a career with us.
Ross: P2p has expanded
from one office to four offices. What have you learned about growing through
the expansion of your physical presence?
Mark: It’s not easy!
Having success in one location does not automatically lead to success in
another. People are tribal and each office has evolved on its own. People
need to have experienced success in one office before they move to one of the
can then transfer the systems, procedures and more importantly the
behaviours, of their original office. Secondly, you need to have your systems
and procedures in place. It’s old news now, but get everything in the cloud
so you can apply a ‘cookie cutter’ approach to every new office.
Ross: What role has
Greg Savage, as a non-executive director, played in the growth or p2p? How
has it changed (if it has) over the ten years?
has been an advisor to Manda, Simon and I since we opened. Whenever there is
a big call to make or a significant strategic decision, we would run it by
Greg for his view. Most times (pleasingly), Greg confirmed our own thinking
but with some decisions he provided an invaluable perspective we hadn’t
considered. A good example of this would be the way we handled the GFC.
Greg’s advice, we were able to steer the company through the turmoil and gain
market share. I would also suggest having a non-executive Director on the
board, whether you have the opportunity to have Greg or someone else, creates
a reporting line that many new recruitment company owners don’t have. This
means that in your day-to-day actions you will make decisions not purely
based for your own benefit but also with the consideration of how you report
this decision to the Board. This is a great discipline as it keeps you from
getting distracted and/or making ill-considered decisions.
are the most significant changes that p2p (and more broadly, the recruitment
industry) have had to deal with in terms of client and candidate behaviour
Mark: The rise and
subsequent disruptive effects of social media and technology is the biggest
change. This change is most evident in the sourcing of both new clients and
candidates. You have to be very savvy in managing your candidate pool. Just
running ads on job boards is not enough.
need to build a community and brand integrity, so that when your consultants
approach people directly, you are likely to get ‘I know you guys’ rather than
being ignored ….and believe me, it’s much easier to be ignored now than it
was ten years ago! As a business owner, I spend more time thinking about how
the company can generate leads for our consultants than anything else. Their
time is expensive and I want them to make every call count.
me a little about the role that technology plays at p2p in 2015.
Mark: Technology can
be both highly beneficial and a big drain on your business. At people2people
we have embraced technology as part of our growth plan. Our goal was to be
scalable and efficient, which technology has enabled us to do. As an example,
it costs us $6.15 per person to process their salary/wages in a month. The
Australian average is $12.00.
have achieved this by using integrated systems and technology. On the downside,
technology can absorb an inordinate amount of time with little benefit and
can be expensive if you don’t have the internal resources to maintain it.
Luckily at p2p we have a couple of nerds, including myself, who are keen to
Ross: What are you
most proud to have accomplished at p2p?
Mark: Manda, Simon and
I are most proud of the way we have developed our people. It sometimes sounds
a little twee, but we view the people2people team
as our family. It is particularly rewarding to see young fresh-faced
graduates develop over time, become managers, build successful careers and be
rewarded financially. Being a part of our people’s success, which is
inextricably linked to the success of the company, is our most notable
Ross: What changes, if
any, do you think the recruitment industry needs to make to its traditional
business model (perm and temp contingent recruitment) in order to remain
relevant to its customers over the next decade?
simply, recruiters need to have access to talent and/or job opportunities
which people cannot access themselves. Brand integrity, both as a company and
an individual, is critical.
need to promote this brand relentlessly, so that when you approach talent and
employers directly, they will recognise your brand and take action. What has
not changed is the fundamental skill of a consultant to facilitate and coach
the best talent and employers through the recruitment process. Without that
fundamental human skill, the social media and technology advances mean
Ross: What are the p2p
goals for the next five years? Do the Directors intend to change the growth
model (ie any plans to raise capital or realise shareholder value through a
minority/majority/full sale or an IPO?)
Mark: We are looking
to continue to grow people2people
in Australia and New Zealand. We want to build greater depth in
our ten specialisations and take a greater market share. Our journey is just
beginning, so any IPO and sale is not on our agenda. Most likely, it will be
building partnerships with successful recruiters in new geographical markets,
who can take advantage of our brand and systems and who want to be part of a
Ross: How did p2p
celebrate its ten year anniversary?
Mark: Quietly on the
day and without fuss, however, later in the year we will make a bit of a
splash with all of those people who have shared in our success over the last
ten years. People we have helped with their career or employers who we have
helped build their teams… and our consultants both past and present; some
of whom have married each other! Officially, our birthday was 2 February and
it was a quiet affair in the office. Manda, Simon and I shared a quiet beer
and the next day we were back at it.
Mark, I appreciate you taking the time to answer my questions.
Ten years of success: The Six Degrees Executive journey
Full steam ahead: A conversation with Hays Aus/NZ MD,