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As regular readers know, I take a particular interest in the performance of the publicly listed recruitment agencies.

Last week, ASX-listed Rubicor Limited announced their results for the six month period ending 31 December 2017.

The results were underwhelming, to say the least.

Revenue dropped from $104.9 million (excluding abnormal items) to $93.2 million. Underlying EBITDA was $200,000, down from $2.6 million for the same period last year.

There’s been little good news for Rubicor shareholders since a board ‘refresh’, instigated by an unhappy shareholder (Cashel Capital Partners Fund 1 Pte Ltd), led to the forced departures of CEO, Kevin Levine in mid-2015. David Hutchison (CA, MBA from management consulting and banking) replaced Levine as CEO. You can read the full tale of this nasty spat here (ShortList subscriber access only).

Pointedly, the existing Rubicor board, in attempting to hose down the shareholder revolt at the time described Hutchison’s experience as “largely in corporate finance and training, particularly in the mining, and oil and gas sectors… and it is the board’s view that this will add little to the existing Rubicor skill set”.

ShortList concluded its report on the board revolt:

Cashel told shareholders in a letter last month that one of its aims in pushing for the board changes was to stop Rubicor following ASX-listed competitor Bluestone Global, which collapsed last year

This is not an opportunistic attempt at obtaining control, this is a desperate attempt to ensure that Rubicor does not head the same way as Bluestone Group,” it said.

“Simply put, the current Rubicor board has not delivered on the promised growth and continues to haemorrhage shareholder money while drawing outrageous directors’ fees.”

At the time of the coup, Hutchison made an unconditional undertaking to the board that upon his appointment as CEO, he would transfer labour hire contracts to Rubicor to the value of $43.7 million in revenue and $5.37 million in profit, at no cost to the company.

In nutshell, the renegade shareholder believed they could bring immediate top and bottom line improvements to the business and do a better ongoing job than the existing board and executives.

So have the new board delivered?

Let’s look at the evidence accumulated in the two years and nine months since the new CEO (and shortly afterwards, Chairman), David Hutchison took the reins at Rubicor.

Key Executives 

Unfortunately for Rubicor shareholders Rubicor has experienced a carbon copy of the high executive staff turnover seen at other large recruitment agencies when an outside-industry CEO arrives.

Here’s a (likely incomplete) list of senior executive comings-and-goings at Rubicor under Hutchison’s leadership:

Executives hired by Hutchison, who are no longer employed at Rubicor, include:

CFO:  Brent Wall (Sept 2015 – Feb 2016),

CFO:  Christopher White (Jan 2016 – July 2017, also held COO role Nov 2016 – July 2017)

GM, Xpand:  Ray Fleming (Jan 2017 – Dec 2017)

GM, Professional & Technical:  Jason Darbyshire (Nov 2016 – June 2017)

GM, Professional & Technical:  Rob Sheffield (Nov 2017 – Jan 2018)

GM, Group Sales & Marketing:  Russell Shooter (Oct 2016 – Sept 2017) 

Executives in place before Hutchison arrived, who have since departed, include:

Group COO:  Sue Turk (May 2008 – Jan 2016)

Group MD (Professional):  Andy Bradshaw (Feb 2013 – Sept 2016)

MD, Apsley Rec & SMF Rec:  Lyndsay Steadman (April 2009 – July 2016)

GM, Gel Group:  Juliet Magee (Oct 2013 – Feb 2016)

Global MD, Xpand:  Ian Tyler (Feb 2013 – Jan 2017)

GM, Managed Solutions, Xpand:  Tom Mackintosh (Feb 2015 – Dec 2017)

Director (Australia), Xpand:  Matthew Munson (March 2013 – Feb 2017)

What to say about this revolving door of senior executives, especially those with deep recruitment industry expertise that Hutchison lacks? How can any Rubicor consultant be inspired about the future when senior executives are coming and going at this rate? 

Financial performance

As the power shift at Rubicor occurred at the end of the 2014/15 financial year, I can use full year data for valid comparisons.

After the recent release of the half year result for Rubicor’s current financial year (2017/18) they are on track for a full year sales result of around $181 million, an 11% decline, over a three year period, from the $204 million ($1.3 million loss) posted in 2014/15.

The April 2017 sale of Ensure Recruitment only accounts for around $7 million of this sales decline. For the same three year period, Hays (the market leader) are on track to deliver a 33% improvement in their results (gross profit). In simple terms, Rubicor have underperformed against the market leader by a factor of four.

This is especially embarrassing because the Australian recruitment industry is in the midst of a boom, as evidenced by a quick glance through recent ShortList reports of recruitment agencies’ climbing sales and profits (“Adecco’s Australian revenue growth accelerated to 15% in the December quarter and aided a “turnaround” in profitability”, Australia/NZ (up 6%) leads APAC growth for Hudson”, “Drake International’s Australian business has reported double-digit revenue and gross profit increases in its past financial yea”, “Ashley Services Group has reported strong growth in its labour hire businesses during the December half.”).

Needless to say, the multi-million labour hire contracts promised by Hutchison in June 2015 failed to materialise. Rubicor compounded their embarrassment by having to say, in response to a ’please explain’ from the ASX on the promised contracts in early 2016, that the “….status of its contract discussions are “so uncertain and indefinite that it is not in fact market sensitive information”.

CEO’s Annual Review in the 2017 Annual Report

David Hutchison’s contribution to the Rubicor 2017 Annual Report is depressingly similar to what you will read in the 2016 Clarius Annual Report.

It’s almost as if Hutchison is trolling me with the familiar list of topics addressed, or ignored, in his report.

Rebranding? Tick!
New technology? Tick!
No mention of the company’s staff or how their recruitment skills and leadership capabilities are being development? Tick! (Simply a heading Productivity and a few clinical sentences concluding with a motherhood statement).

Driving sales and returning to profit

In the Rubicor Group 2017 Annual Report you will find details of a number of cost reduction initiatives in areas like head count decrease (230 to 185), office accommodation downsizing, IT consolidation, and leave management that all appear to have delivered some cost savings, but this is focusing on the wrong stuff!

In a boom market, recruitment agency leaders need to focus on driving sales; to coin an old phrase – make hay while the sun shines. Cost reduction is really not that important if you are driving profitable sales forward, which the current Rubicor leadership appears incapable of doing.

The annual report engages in finger pointing at the previous management (“Current sales per head productivity is materially below industry benchmarks which can be explained through the disjointed and previous combative organizational culture, and inconsistent and non-aligned short and long term remuneration policies”, page 3) while offering nothing more than meaningless generalisations by way of solutions (“To ensure performance is comparable or better than industry peers in the coming years Rubicor intends to invest in productivity initiatives which will include technology, training and improved recruitment practices”, page 3).

The most embarrassing admission that the current leadership at Rubicor has no real idea how to turn things around is the, frankly laughable, ‘initiative’ mentioned in the ShortList report that detailed the company’s July – December 2017 results.

“Rubicor has also announced plans to create a new revenue stream, charging third-party providers for access to its candidate database, which numbers in the millions. 

The “candidate engagement platform” will involve partnering with career, financial wellbeing, health, and lifestyle businesses to earn subscription, distribution and referral fees.”

The stupidity of these ‘plans’ is hard to understate.

Wandering off into an area that Rubicor has no existing expertise or competitive advantage in is sheer madness; highlighted by the Rubicor executive quoted in the ShortList article; Executive Director and COO Sharad Loomba, saying that “there was “guesswork involved” in how much the program might contribute to the overall business.”

You seriously mean to tell me that there is no business case for this headlong charge into database marketing? That it’s all “guesswork”?

This from a qualified lawyer who earned $340,449 at Rubicor last financial year as the Group COO!

Here’s an idea – why don’t Rubicor use their existing candidate database to improve sales by, maybe, controversial I know, stay with me on this………… placing more candidate into jobs. Wow, there’s an idea! 

This is what highly profitable recruitment agencies do; they leverage their candidate database in order to place more candidates into jobs so they can invoice their clients more frequently. This is a reliable way to make more money and there’s no “guesswork” involved. It’s a formula that has worked for decades and despite what the many naysayers outside the industry might pontificate about, continues to deliver mountains of cash for efficient recruitment agencies.


David Hutchison is clearly a very intelligent person. He is a Chartered Accountant and a fellow of the England and Wales Chartered Accounting Institute. His MBA was earned at the London Business School and Harvard Business School in Corporate Finance. His work experience includes stints at Arthur Andersen, McKinsey & Company, Deutsche Bank, and Standard Chartered Bank.

Hutchison may be intelligent in the traditional academic sense of intelligence, but unfortunately this intelligence hasn’t translated into effective leadership of a people business. He has conspicuously failed to recruit and/or keep the talented recruitment executives he needs to lead Rubicor back to sales and profit growth. Two or three (maybe even five or six)  resignations or sackings come with the job of being a new CEO but once your list of departures tops double figures (before the end of your third year in charge) there is only place to look for the source of the problem.


At the end of June 2015 Rubicor shares were trading at 4 cents. Currently they are trading at 3 cents, having risen as ‘high’ as 7 cents in November 2016.

The share market has delivered its verdict and mine is the same – the new Rubicor leadership team talked a big game when they took over nearly three years ago, but the end result is clear: the company is going backwards not forwards and recent utterances and decisions only confirm that the current board, led by David Hutchison, doesn’t have a clue how to fix it.

related blogs
Why many CEOs fail: They talk smart but don’t act smart
Clarius becomes Ignite but turnaround yet to be seen
ASX-listed recruiters are now endangered: 2014/15 in review
Out-of-industry CEOs: A breath of fresh air or a cocky fish-out-of-water?

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Chris South

Well written article Ross, appreciate you taking the time to read these reports and break it down for us!


Thanks Ross. Oh the irony on of a leader who forgot to focus on the human element…..when this is the very thing we make our living from.

Craig Gardner

I agree with you Ross and a really good read
There is a real lack of understanding that you have to reinvest into the company brand for candidates and clients to engage and that means spending some currency on marketing your wares and understanding what your constituents want.
Bluestone had exactly the same issue.
The quality of their data will be the issue, I fear.

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