Federal Government recruitment spend: Hays no surprise; HorizonOne big surprise
Hays Australia has long been the largest recruitment agency in Australia, by any measure you wish to use. Their performance in converting gross profit into operating profit, and then into cash, is outstanding, not just locally but globally.
Hays publishes some local fees-by-specialism data but without knowing the size of aggregate agency spend within that sector, nationally, it’s just speculation as to the extent to which Hays leads their nearest rival, in dollar terms.
A peek into Hays’s dominance in one sector was provided two weeks’ ago, from a request by Federal Labor MP Julian Hill for an analysis of AusTender aggregate data for the Recruitment and Related Services panel covering the six financial years 2013-14 to 2018-19.
|Agency||Total value of |
contracts (AUD millions)
|3. Hudson Global Resources||$63.3|
|4. DFP Recruitment||$62|
|5. Chandler Macleod||$42.5|
|6. HorizonOne Recruitment||$39.4|
|9. SOS Recruitment||$29.2|
|10. Mosaic Recruitment||$25.8|
Hays generated more than seven times the revenue of the second highest agency, Randstad, on the list. This is an incredible performance and speaks to the effectiveness of the government recruitment arm of the Hays machine.
A gap this enormous, compared to their rivals, must mean Hays
- wins vastly more vacancies to work on,
- is far more effective at finding candidates who accept offers,
- fills higher-value vacancies (ie larger-than-average perm placement fees and/or higher total contract placement value),
or a combination of some, or all, of the above.
No matter what’s actually happening it’s clear that Hays have a torched the competition through their ”…. focus on execution in each of our local markets, delivered by the best people, sector-leading technology, recruitment, tools and our world-class brand.” (Hays plc Annual Report & Financial; Statements, 2018, page 3)
I would be surprised if Hays’s utter dominance in the Recruitment and Related Services panel is replicated by the leading provider (by contract value) in any other type of Federal Government supplier panel.
Another significant insight from the league table is the appearance of HorizonOne Recruitment, who jumped to prominence by being listed the sixth largest supplier, by contract value, just behind Chandler Macleod, with Adecco was immediately below.
Who’s HorizonOne, you might ask?
I went looking for some answers and happily, HorizonOne founder and Director, Simon Cox was willing to respond to my questions.
Ross: HorizonOne would be unknown to most people in the recruitment industry outside of Canberra. Tell me a little about the HorizonOne story – who are you, what do you do and how do you do it?
Simon: HorizonOne was established in 2008 to provide a consultative, quality focussed, alternative to the big multinationals.
Instead of the common sales tactics employed by our competitors we focused on sharing insights built upon real evidence, delivered in a consultative manner. We felt traditional recruitment suppliers models were not delivering the value and talent our clients were seeking and really wanted to shake things up by driving innovation in our industry.
So we set up a genuinely values-based business that relied on deep specialisation, trusted relationships and ethics over speed-to-market and volume.
We believe in this concept of “recruitment karma”: “You do good work, you look after people, and great things happen”
HorizonOne commenced business six months before the GFC; how were things in the early days?
Global markets were in freefall, there were redundancy rounds going on all over the place. We were busy trying to build mature processes and systems to support a high quality consulting firm…..while crickets were chirping in the recruitment market. But we stuck by our vision even though the our model was harder and slower to build and many times it felt like we were running against the tide.
Where were you able to make traction?
The key has always been to attract exceptional people, who shared our values and to provide a really fun, challenging and rewarding environment for them to thrive in.
We attract and retain really experienced (currently averaging 9 years in the industry), high performing specialists. Critical to this has been developing an employer brand that speaks to those who identify with our values and way of doing business.
What indicators are you most proud of now?
Our amazing team, who have been the key to our last seven years of growth, including the last four years of 30% year-on-year growth.
One thing we don’t (or can’t?) stop doing is reinventing how we do what we do. Challenge the usual” is a founding core value. We develop tailored, innovative solutions for clients crying out for more value from their recruitment fees. We love working smart and have adopted a large amount of new technologies to support our team to do their job better, including building multiple apps.
It seems like HorizonOne was flying under the radar but have now been somewhat thrust into the spotlight through the AFR publishing the Recruitment and Related Services panel league table two weeks’ ago.
Yes, it feels a little bit like we have been outed by the AFR although it’s not like we have been keeping things a secret.
We’ve been recognised in various awards, including the Recruitment International Awards (2019 Marketing Campaign of the Year); the RCSA Industry Awards (2019 Operational Excellence Award), the SEEK SARAs (Runner-up, 2019 Small Recruitment Agency of the Year) and the Telstra Business Awards (ACT Finalist 2019 & 2018, Medium & Making Waves category).
How is a small Canberra-only agency competing so effectively against large competitors who have deeper pockets and global resources to draw on?
What I think we have done well is to create a company carefully tailored to meet the needs of what is a very unique client base, in an extremely tight candidate market.
We have built an approach to consulting that leaves clients and candidates knowing they are in the hands of recruitment experts who put their needs first. A core value at H1 is “Less talk, more listening”.
Federal Government as a market has lots of idiosyncrasies and unusual constraints. Factor in the nature of candidate supply in Canberra and the market is unlike any other in Australia. I have seen numerous multi-nationals fail to establish themselves in the market because they floated out the “same old” business model they use elsewhere.
An example of our different approach is the employer branding and marketing services we offer. We dive in deep with clients to help develop and unlock the potential of their employer brand. We then develop (in-house) innovative marketing campaigns to help them tackle really difficult recruitment challenges.
We are recruiters building apps, websites, and content-rich social media campaigns – I am not sure how we ended up here, but it is a great deal of fun!
Hays still proliferate in Canberra, but their approach to recruitment almost creates the market for a business like HorizonOne.
What Federal Government niche do you deliver the best results in and why do you think that is?
HorizonOne’s original strength was in Accounting and Finance which is a very consistent market in our region, and is a great way to build long term relationships with the leaders of organisations. A&F is still big for us, but most of our growth in recent years has been in diverse specialisations such as HR, data, comms/marketing, technology, government policy, procurement and program management.
We also have a large, award-winning “RPO for government” team that partners with our marketing function to deliver innovative recruitment campaigns and scribing services.
We help clients solve tough recruitment challenges in highly specialised markets; the work that, typically, the big agency recruitment model isn’t as good at. We excel at filling hard-to-fill technical roles.
What do you think differentiates a H1 consultant in your market?
HorizoneOne consultants are known for asking the tough questions, such as: Why are you failing to attract the right people? Why has your career stalled? Your recruitment process is dysfunctional, why?
We like to challenge unhelpful assumptions and poor recruitment practices up front; it helps make sure our work has a lasting impact.
If there’s an elephant in the room, we’ll talk about it, and we will partner with clients who are open with us until we find a solution. That’s not easy, but those types of conversations represent our values in action.
When we have really deep job order and career conversations and really live our values, it builds a different kind of relationship.
What’s an example of something that encapsulates the H1 culture?
We have a panda?
More seriously, we are quite a diverse group across all our teams. It is not the typical group of A-type personalities.
But the thing that ties us together is a high performing culture that puts the needs of clients and candidates first. There is no client or candidate ownership, and consultants get to work across a broad range of sectors rather than being pigeonholed into a specific sector.
Whilst consultants are naturally competitive, we don’t compete against each other. Typically, consultants are as thrilled by their colleague placing a top candidate they sourced, as they would be from making the placement themselves.
On the social side we have a heap of really cool, fun, events that break up the hard work. We have a dog-friendly office, a social committee that takes us from riddle rooms to house boat trips to bubble soccer, and a health and wellbeing policy that promotes a sustainable work-life balance. Whilst most of us love a drink, like most recruiters, we think team bonding should be more than just a bar tab.
For example, following the skeet shooting and wine tour (shooting first!) for our Christmas party, instead of going to the pub after as planned, we hung out at the office, pumped some tunes and played pool with partners joining in to kick on into the night.
How do you attract potential employees?
We have made a major investment in our “work with us” brand and website that does a great job of helping people understand the industry; who we are and how we do what we do.
We use our social channels to attract passive talent and also to run campaigns particularly for new recruiters including using video. A lot of self-selecting goes on before people get in touch, and when they do they tend to be very engaged with our values and approach.
What do you look for in a potential H1 recruiter?
Whilst we still spend a lot of time looking for that “diamond in the rough” of experienced recruiters who fit our values, we’ve had strong success developing consultants from non-recruitment backgrounds.
Whilst personality and communication are important, we also assess attitude and work ethic, intelligence, a natural curiosity about people and organisations, and creative problem solving. Technology skill, the ability to write compelling marketing content and the motivation to build a personal brand are also all very important.
What’s the H1 selection process?
It’s a mix of testing (Intelligence, EI, resilience), in-depth competency based interviews, opportunities to meet various team members including socially, and sometimes practical exercises to determine specific capabilities (e.g. writing).
We use the same evidence-based approach that our clients appreciate, including in-depth reference checking.
How do you develop your team’s recruitment and personal skills?
We buddy new consultants with experienced consultants to ensure they gain maximum knowledge transfer in their first few years.
We support this with a three month tailored induction and learning program delivered through a mix of online training, practical exercises and one on one coaching sessions with subject matter experts. We invest around 120 hours of L&D in each new starter and cover any relevant ongoing study/professional development relevant to their roles.
We leverage a range of external specialists that focus on the recruitment “craft” side of being a consultant, including CarmanWhite, yourself, Ross and we regularly attend Greg Savage events.
Our view is that to be great at what you do, continuous learning is mandatory.
We are currently learning how to setup human-centred design workshops which is super challenging. The team much prefer this type of learning rather than the classroom style of session.
What are you most proud of across the, nearly, 13 years of H1’s existence?
Probably the strength of the team we have now and the positive impact we get to make on people’s lives and the organisations we work for. This is our first week back in the office post-COVID and it is great to see our office community as one again, and to feel the vibe in the office. Whilst COVID has been tough, we are coming out the other side and the Canberra market is busy. The team we have has done exceptionally well and we are already looking at our next hires and new growth areas.
On a personal achievement note, it is probably the feeling gained from sticking by our vision and continuing down the road less travelled even when things were extremely tough early on.
Canberra can be a very difficult market when you are trying to introduce a new way of doing things. Government has very established processes, and because of the size of the ship, they can be slow to adopt new things. Often, we’re chomping at the bit to help them do things better, but convincing them can be hard as they like recruitment suppliers to be “compliant”. But there is so much room for improvement we can’t just stand back and let them do it the way it has always been done and get very average results.
The original vision and values we founded the business has ended up being perfectly suited to our unique market and its needs. Whilst the AFR article has positioned us alongside some big names, it is a cool feeling knowing that we got there by taking the road less travelled.
Thanks for your time, Simon, congratulations on HorizonOne’s success to date and all the best for the future.
Photo, below: The HorizonOne team at the 2019 ACT Telstra Business Award Finals at Hotel Realm in Canberra, Simon Cox is far right at the back. Fellow director, David Harrington is third from the right, back row.