This month is the ten year anniversary since Denis Waxman, the legendary Global CEO of Hays, left the building with his place having been taken by Alistair Cox, an experienced chief executive from outside the recruitment industry.
This was potentially a risky move but ten years on, the decision to appoint Cox can be viewed as a big success, although a glance at the raw numbers from Hays’s global results may not make that immediately obvious.
|Net fees||Operating profit||Total consultants||Total offices||Total countries|
|FY 2017||£954 million||£211 million||6884||250||33|
|FY 2007||£633 million||£216 million||5022||376||25|
In the past ten years net fees have risen by 50 per cent while operating profit has declined slightly. Compared to 2007, Hays now employs 37% more consultants who work in 33% fewer offices in 32% more countries.
Headline figures disguise much. In this case the 2007 figures were propelled by the pre-GFC golden period for recruitment agencies, especially those who recruited in financial markets and financial skill sets.
In 2007 Hays (UK & Ireland) made an operating profit of £141 million from 3134 consultants in 257 offices. Ten years later the equivalent figures tell a starkly different story: an operating profit of £41 million from 1948 consultants across 98 offices.
Cox has been able to navigate a very difficult post-GFC environment by dramatically shrinking the cost base of the UK & Ireland business, growing the Continental Europe market strongly (most successfully in Germany) and methodically commencing operations in new countries through acquisition (eg USA) or aggressive organic growth (eg Singapore).
With their financial platform now very strongly re-established Hays have just released a document that clearly articulates where Cox has been focusing resources in order to keep the Hays competitive advantage alive, and growing, for the decade ahead.
The document Recruitment Remodelled: The art and science of successful recruitment lays bare how Hays view the future of recruitment in a world increasingly impacted by digital technology, data science, artificial intelligence, rapid change and skills shortages.
The Hays response is highly candidate focused – it’s all about using the available technology and science and combining it with human relationships to create what they have called an Approachability Index. Clearly Hays see this as a big winner for them and if it works consistently across the many markets Hays operates in, then I have no doubt it will have a significantly positive impact.
So where does that leave other agencies?
My view is that the opportunity for other agencies to remain competitive with, or beat, Hays is found more in what is absent from Recruitment Remodelled rather than what it contains.
Nowhere in the document is an emerging problem discussed; that of hiring managers failing to understand the true drivers of high performance in a job.
The Hays models works beautifully as long as the key selection criteria articulated by the hiring manager is actually what’s required for success in the role, both in the short term and in the longer term. Unfortunately the skill required of a hiring manager to accurately identify the true selection criteria is often lacking.
This was articulated in Kevin Chandler’s (qualified organisational psychologist and founder & former CEO of publicly listed Chandler Macleod Limited) presentation at the 2016 RCSA International Conference in Port Douglas.
Kevin shared the story of his light bulb moment when he compared the high performance competency sets developed by the managers (the supposed subject matter experts) with the high performance competency sets developed from a scientific and objective assessment of a group of that same company’s high performers – there was almost no correlation! The evidence proved that the hiring managers were largely clueless about what underpinned high performance in jobs they were responsible for!
The lesson being if you start recruiting with the wrong competencies, as the foundation of a job’s selection criteria, then hiring errors are inevitable, no matter how objectively good the candidates are and regardless of how competent the interviewer is.
The Hays approach to the future of recruitment is founded on their Approachability Index driving the success of niche candidate pools of skilled, ready-to-move candidates.
Hays is leaving hiring managers to figure out for themselves, for the time being at least, the correct competency sets for high performance in the jobs that they are recruiting.
The opportunity for other recruitment agencies is to develop a methodology that can help the hiring manage make a better job analysis and match that with the creation of an accurate high performer profile. This level of capability is not easily attained because it’s a fundamentally different client service model requiring a significant investment of resources to build, deliver and improve.
The sophistication of this approach, compared to current recruitment agency business models, is unlikely to appeal to many agency owners, however the opportunity remains tantalisingly available.Consistently beating Hays requires plenty of resources and a steely resolve, and this approach is no different.
In the meantime you can be sure that Hays will continue down the path that has made countless fortunes since the beginning of exchange and trade a few millennia ago – give the people what they want, rather than what they need.