Multi-sector agencies make a comeback WWW.RECRUITER.CO.UK 19
RE CRUITE R FAST 50 20 17
In th his pe eriod of uncertainty, multi-secttor recruiterss make e a come eback k in Reccruiterr’s FAST T 50 2018 Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50
2017 ranking 2 45 14 4 18
12 10 43 1
13 31 15 5 36 11
19 8 50
34 3 38 27 16
Day Webster One Call Recruitment Navartis McGinley CEP Prospero Teaching Ethero X4 Group Marlin Green National Locums Venquis Futures.co.uk Frank Recruitment Group Venturi Hallam Medical La Fosse Associates Falcon Green ERSG Scope4jobs Passionate About People TeacherActive Phaidon Holdings STR Group Urban Recruitment Group Eames Consulting Group Your World Recruitment Group Recroot Eton Bridge Partners Caval First People Recruitment Red Snapper Group Direct Medics Central Employment First Call Contract Services Pro-Force Avenue Recruitment Evergood Associates Salt Recruitment Core-Asset Consulting ICG Medical Morgan Law Ignata Smart Solutions Recruitment Service Care Solutions Amida Recruitment First Point Group SEC Recruitment James Andrews Recruitment Solutions Futureheads Logical Personnel Solutions Whitehall Resources
Healthcare Industrial Technical Construction Education Multi-sector IT, Engineering, Pharma IT/Technology Healthcare IT/Technology Multi-sector IT/Technology IT/Technology Healthcare IT/Technology Construction Technical Industrial Technical Education Professional Multi-sector Healthcare, education Professional Healthcare Multi-sector Executive search Construction Multi-sector IT/Technology Healthcare Multi-sector Multi-sector Industrial Multi-sector Healthcare IT/Technology Finance Healthcare Professional Professional Multi-sector Multi-sector Construction IT/Technology Life sciences/pharma Multi-sector IT/Technology Industrial IT/Technology
Revenue (£000s) 89,564 29,345 30,441 114,537 23,486 11,547 18,255 17,092 19,228 17,927 13,184 126,492 17,049 25,837 61,946 22,860 40,090 15,673 72,185 33,129 33,031 56,673 51,159 40,222 117,430 20,651 30,662 26,331 14,681 25,558 27,906 13,707 58,029 21,675 15,346 25,610 30,856 13,832 74,568 37,267 35,614 89,509 40,577 13,178 58,741 24,412 10,914 13,509 26,384 46,950
Compound annual growth rate (%) 76.0% 75.4% 55.8% 50.5% 50.3% 47.0% 46.4% 46.3% 45.8% 45.0% 44.6% 42.3% 40.4% 39.2% 38.0% 37.6% 37.4% 37.1% 37.0% 34.9% 34.2% 33.5% 32.8% 32.6% 32.6% 32.3% 31.5% 29.5% 29.2% 29.1% 28.7% 28.3% 27.8% 27.5% 27.5% 27.4% 27.3% 27.1% 27.1% 27.0% 26.8% 26.5% 25.9% 24.5% 24.4% 24.0% 24.0% 23.9% 23.9% 23.6%
Hugh Woods Ballard, Daniel Wise Andrew Chittock, Sharon Chittock Jim Sloan Colm McGinley Robert Grays, Lesley Grays Gareth Hughes Glenn Norris, Mike Norris, Peter Rabey Annette Fox, Beth Dixon David Cook, Glenn Cook, Jenny Cook, Natalie Cook Barnaby Parker David House, Tom Liptrot TPG Capital Brad Lamb Scott Davies Simon La Fosse, Linda La Fosse Jack O'Connell, Joseph Sweeney, Kieran Nestor Peter Flaherty, Jim Ryan, Lucien Sullivan Tony Wilson Raymond Pugh, Alan Beresford Simon Ryder, Jagjeet Uppal Adam Buck Richard Crawley, Clive Hutchings Russell Prince Matthew Eames Tony Moss, Richard Phillips Jacob Marrs Ashton Ward Jamie Talbot, Oliver Burt Mark Foster, Paul Simpson Martin Jerrold Paul Mulvenna, Anne-Marie Flannery Paul Ponton, Mark Trett, Steve Hart David Mankelow, Kevin Gray Matt Jarrett Ian Campbell, Rona Campbell Martin Healy, Emma Healy Marco Schiavo, Paul Gardiner Betsy Williamson Adrian Treacy, James Parsons David Morgan, Simon Law James Caan Nathan Bowles Chris Musgrove Aaron George Alistair Rynish Mobeus Equity Partners, Stuart Britton, Nigel Gardner Daljit Banning Balvinder Blake, Charlie Hoult, Gillian Arnold, Rachel Murray Stephen Durant, Ben Lerner Tremayne Hall
www.daywebster.com www.onecallrecruitment.co.uk www.navartis.co.uk www.mcginleycep.co.uk www.prosperoteaching.com www.ethero.co.uk www.x4group.co.uk www.marlingreen.com www.nationallocums.co.uk www.venquis.com www.futures.co.uk www.frankgroup.com www.venturi-group.com www.hallammedical.com www.lafosse.com www.falcongreen.co.uk www.ersg.co.uk www.scope4jobs.com www.passionateaboutpeople.co.uk www.teacheractive.com www.phaidoninternational.com www.strgroup.co.uk www.urbanrec.co.uk www.eamesconsulting.com www.yourworldhealthcare.com www.recroot.net www.etonbridgepartners.com www.planetcaval.com www.fprgroup.com www.redsnappergroup.co.uk www.directmedics.com www.centralemployment.co.uk www.firstcallcontractservices.co.uk www.pro-force.co.uk www.avenuerecruitment.co.uk www.evergoodassociates.co.uk www.welovesalt.com www.core-asset.co.uk www.icg-medical.com www.morgan-law.com www.ignata.com www.smartsr.co.uk www.servicecare.org.uk www.amida-recruit.com www.firstpointgroup.com www.secrecruitment.com www.jarsolutions.co.uk www.wearefutureheads.com www.logicalps.com www.whitehallresources.co.uk
Loughton Peterborough Doncaster Watford London Telford London London Milton Keynes London Leeds Newcastle Wilmslow Sheffield London London Bromley Maidstone Stonehouse Birmingham London Portsmouth London London London Bury St Edmunds Windsor Leeds Brighton London Belfast Newcastle upon Tyne Waltham Cross Canterbury Dunfermline Hertford London Edinburgh London London London Newport Preston London London London Leicester London Leeds Colchester
Mar 2016 Mar 2016 Mar 2017 Dec 2016 Jun 2016 Apr 2017 Sep 2016 May 2017 Feb 2017 Dec 2016 Jul 2016 Nov 2016 Sep 2016 Apr 2016 Dec 2016 Mar 2017 Sep 2016 Sep 2016 Jun 2017 Dec 2016 Oct 2016 Dec 2016 Aug 2016 Dec 2016 Dec 2016 Sep 2016 Dec 2016 Dec 2016 May 2016 May 2016 Jan 2016 Sep 2016 Dec 2016 Mar 2016 Dec 2016 Sep 2016 Dec 2016 Jun 2016 Mar 2016 Sep 2016 Dec 2016 Jul 2016 Mar 2017 Mar 2016 Apr 2016 Dec 2016 Mar 2016 Dec 2016 Nov 2016 May 2017
* If the head office is not stated, then location closest to registered address used
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FAST 50 2018: UNCERTAINTY BITES Data compiled by mergers & acquisitions specialist Clearwater International demonstrates a slowing growth rate for privately-owned recruitment ﬁrms
t has been a year like no other. A year in which Article 50 has been invoked and the UK commenced negotiations to exit the European Union and forge future trading relationships. Irrespective of which side of the fence one sits, Brexit has undoubtedly created uncertainty, which in turn has weighed on candidate and client conﬁdence in certain sectors. However, despite the less favourable backdrop, market-leading, privately-owned recruitment agencies have continued to report strong growth, albeit at lower levels than previous years. Constituents of this year’s 2018 FAST 50 grew by an average compound annual growth rate (CAGR) of 35%, down from 43% in 2017. The results are based on ﬁnancial years ending between March 2016 and June 2017. The UK recruitment market is not only the largest in Europe, but it is also the most fragmented. Data from Companies House indicates that there are around 28,000 recruitment agencies in the UK and this number continues to grow at a phenomenal rate. It is therefore no surprise that each year features a new breed of recruiters placing in the FAST 50 for the ﬁrst time, dislodging
more established agencies who struggle to maintain such high levels of percentage growth. In this year’s ranking, 24 of the companies placed for the ﬁrst time, with a number being founded in the last ﬁve years. Unlike previous years, which saw the resurgence in the level of niche specialists, 2018 marked the return of multi-sector agencies. New entrant Ethero led the way for the category, but a further 10 agencies placed. Multi-sector agencies are often well positioned to drive revenue growth through a more challenging trading environment as they are less exposed to
Talent shortages represent the major constraint to growth in the coming years
sector speciﬁc challenges, in addition to often focusing on higher volume, blue-collar temps. Niche sectors with strong market fundamentals still continue to be highly represented. IT is the best example and accounted for 20% of constituents. The sector is of ever-greater importance as companies recognise the all-encompassing role technology is playing in business and as such the necessity to source top talent. Further, with a changing regulatory landscape in the form of the General Data Protection Regulation (GDPR) and increasingly high proﬁle and frequent data breaches as recently seen with Uber and Equifax, agencies able to source vetted talent particularly for roles in IT security, big data, artiﬁcial intelligence and cloud have performed well. Unsurprisingly, agencies focused on the construction and engineering markets also featured highly. The commencement of Hinckley Point, Road Investment Strategy (RIS) 1 and High Speed 2, and further mega infrastructure projects in the pipeline, have helped create a favourable market. However, sourcing talent now represents the strongest capacity constraint to delivery. A situation
+ L-r: MARCUS ARCHER and MARK MAUNSELL, compilers of the Recruiter FAST 50 report from corporate finance house and international M&A specialist Clearwater International
further exacerbated by a fall in net migration in the last 12 months, with reduced levels of immigration and a rise in emigration by EU citizens, as reported by the ONS in November. It is therefore a great achievement for Falcon Green, Caval and X4 Group to appear in the ranking for the second year running, demonstrating an ability to engage with prospective talent. It is also worth mentioning the healthcare sector, with seven specialist
agencies placing in the FAST 50, including Day Webster, which topped the ranking with a CAGR of 76%. While the price caps have now been in place for just over two years, we are still yet to fully see the impact of the initiative in the FAST 50 as, in the main, the accounts date to early 2016. Statistics from NHS Improvement, however, indicate that agency spend fell by around £600m to £3bn in the initial 12 months, but it will be interesting to review the revenue growth on-framework
METHODOLOGY The annual Recruiter FAST 50 prepared by Clearwater International lists the fastest-growing, privately-owned recruitment companies in the UK, according to a revenue compound annual growth rate over the three most recent annual reporting periods.
CRITERIA FOR INCLUSION: To qualify, companies must be unquoted, registered in the UK and not subsidiaries, although their ultimate holding companies may be based offshore. Companies that are backed by private equity or other financial investors, either minority or majority equity stake, are also considered for inclusion. All companies considered for inclusion must achieve minimum annual sales of £5m in each of their last three financial years.
EXCLUSIONS: Companies that have filed abbreviated accounts at Companies House without disclosing audited sales are excluded from the FAST 50. Companies whose latest available filed accounts are 2015 or before are excluded. Companies that are not ‘pure play’ recruitment companies are also not considered. Recruiters that are co-owned by foreign trade recruitment companies or where a listed recruitment firm holds a minority stake are also discounted.
DATA COLLECTION METHODS: Qualifying companies are identified through independent research, which utilises a number of financial databases, Companies House information, press coverage and other research sources. Entry submissions are therefore not required, although any firm which believes that it may not be automatically assessed in the 2019 FAST 50 may contact Clearwater International to discuss. Please email email@example.com
agencies have achieved next year and the impact from changes to IR35 regulation. Education is another sector under the public spotlight and one that faces impending government intervention. While the jury is out on the level of participation in the CCS framework and the ease of implementation, it is likely, in due course, education agencies will be faced with a similar volume to margin trade-off proposition in what remains a sector with huge supply-demand imbalance. For now, though, it is promising to see three specialist agencies appear in the top 30 of the FAST 50 for at least the second year running, with Prospero Teaching ranking the highest in 5th place. Private equity funds continue to play an increasing role in shaping the recruitment landscape as they look to invest in fast growing, proﬁtable and often single sector focused recruiters. Consequently, many FAST 50 companies are often considered key acquisition targets for mid-market private equity groups or already operate under private equity ownership. To illustrate the point, earlier in the year Frank Group completed a secondary buyout with TPG Capital, while Hallam Medical and RDL Corporation are backed by Key Capital Partners and Mobeus Equity Partners respectively. Despite the more uncertain backdrop, it is yet again extremely positive to witness progressive independent recruitment ﬁrms report such high levels of growth. Talent shortages represent the major constraint to growth in the coming years and are a topic that will remain ﬁrmly under the microscope as the UK negotiates its divorce from the EU. Companies able to adopt more innovative approaches to sourcing qualiﬁed candidates, and to think more laterally about transferable skill sets in addition to sector experience, are best placed to succeed.
TH E B IG STO RY REC RU ITER FAST 50 20 18
Hugh Woods Ballard 2015 to date: Chairman, Day Webster 2009-15: Managing director, Day Webster 2002-09: Group financial director, Morgan Hunt Other roles at Medical Exchange Online, Experian, and Cazenove Communications
Healthcare recruiter Day Webster tops the FAST 50 charts but its founders plan on greater success in the future. Colin Cottell investigates
PHOTOGRAPHY | PETER SEARLE
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he sales ﬂoor is a hub of activity at healthcare recruiter Day Webster, where staff are beavering away at row after row of desks that recede into the near distance. It’s a far cry from the scene just eight years ago when Hugh Woods Ballard and his co-founder and fellow director Daniel Wise launched the company from a service office in Liverpool Street in the City of London. Since then the Loughton, Essex-based company has gone from strength to strength, its staff numbers shooting up from just two in 2009 to nearly 300 today. The company’s impressive record of growth has now been recognised in Recruiter’s latest FAST 50 rankings. Compiled by mergers and acquisitions (M&A) specialists Clearwater International, the 2018 FAST 50 reveals Day Webster to be the fastest-growing privately owned recruitment company in the UK. In 2016, turnover hit nearly £90m, up from £63.6m in 2015, with proﬁts after tax up a third on the previous year at almost £4.9m. Such an achievement is the stuff of dreams for many recruitment bosses, but for Woods Ballard, its basis is disarmingly simple. Asked the principles behind
the company’s success his response is succinct and to the point: “Build a solid base, a high-volume low-margin business and treat people well. It’s as simple that; it’s not rocket science,” he says. It may not be rocket science, but it’s a formula that has propelled the company to its current exalted position. Reminded of his quote in the media at the time of the launch that he had “always wanted” to run his own
company, and that it was “now or never”, Woods Ballard says he felt “embarrassed”. But eight years on there is certainly nothing for the ex-group ﬁnance director at Morgan Hunt to be embarrassed about, as Day Webster has taken an ever-increasing share of the healthcare market, and now has around 250 mainly NHS Trust clients. “We never expected to have done as well as we have done,” Wise admits.
Daniel Wise 2009 to date: Director, Day Webster 2007-09: Sales director, John Michaels Search 2004-06: Manager, Healthcare Locums
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Heart of the operation As joint founders, Woods Ballard and Wise remain at the heart of the company. After previous experience in healthcare recruitment as a manager at Healthcare Locums, and some time as a headhunter, Wise explains how meeting Woods Ballard gave him the opportunity to fulﬁl his wish of getting back into temporary recruitment. “It seemed to ﬁt,” adds Wise, though given the pace and extent of the company’s rise many might see this as an understatement. Both men acknowledge how Wise’s sales skills complement Woods Ballard’s ﬁnancial acumen and back office expertise. Indeed, it was only two years ago that Wise “took a back seat” away from the sales ﬂoor. Providing around 85% of Day Webster’s business, the NHS has always been front and central to Day Webster’s plans and ambitions. “We wanted to grow quickly, so we acquired a framework business [Care Providers in 2011] so we could do higher volume and lower margin business, and we could undercut the competitors,” says Woods Ballard. By launching the company in 2009, at the start of what Woods Ballard has identiﬁed as the healthcare market’s seven to eight year HR/recruitment life cycle, Day Webster successfully rode the wave of several years of increasing NHS agency spend. While it was great while it lasted, Woods Ballard says he realised “things could not continue the way they were”. And following “the low point” when agency caps that set maximum charge rates and wage rates came in, contributing to margins being squeezed from 18% to around 14%, the company has been busily repositioning itself to align it to the new market realities. “There is much more longevity in trying to work with the NHS and Department of Health than against them,” Woods Ballard explains.
Efficiency rules In line with this tougher environment for healthcare recruiters, the company now focuses its efforts on helping 26 RECRUITER
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C O M PANY
Day Webster Year ended
31 March 2016
Turnover £89.6m After tax profit £4.88m Staff numbers: 300 Clients: 250
31 March 2015 £63.7m £3.67m
NHS trusts save money and become more efficient. The two directors are particularly proud of the company’s own vendor management software, which can be adapted to meet individual trust’s needs. With each invoice costing £6 or £7, Woods Ballard says the ability to send one consolidated invoice rather than one invoice per shift saves NHS trusts hundreds of thousands of pounds a year. It also provides NHS managers with information “however they want it”, such as ﬁll rates broken down into specialist roles. “I want to see control going back to the trusts,” says Woods Ballard. As a master vendor, Day Webster is able to ensure that ﬁll rates are kept as high as possible by contracting out shifts that it can’t ﬁll itself to its competitors.
Secret of success “We have opposing skills, and we have built up a good team” Hugh Woods Ballard
A special agency liaison team that operates separately from its consultants has been established “to ensure that all shifts get ﬁlled”. According to Woods Ballard, the company’s combination of software, its managed service and its recruitment side gives Day Webster a signiﬁcant competitive advantage over rivals. “We have our competitors [in these different areas] but nobody does it all,” he claims. Woods Ballard takes particular pride in taking the ﬁght to what he describes as the “cowboy agencies” – “the higher charging agencies who have been taking the mickey, shall we say”. And he predicts the downfall of those rival companies whose business model depends on higher margins and higher charges, leading to a shake-out and consolidation in the market (see news story on p7).
he says Day Webster uses only one – weekly margin. Despite clouds on the horizon such as Brexit, which could see a reduction in the supply of qualiﬁed healthcare staff from the EU, and the cliff edge of many nurses retiring, Woods Ballard remains positive. With technology as a differentiator, he says the company is already making inroads into new areas such as doctors and other medical staffing markets, and has even branched into pastures new by launching its own education desk. Although Wise says the plan is to
double company turnover to £200m, Woods Ballard says growing at the same rate percentage-wise as recent years is not on the cards. Nevertheless, he says growth, albeit growth that is less proﬁtable than in the past, will continue. “There will always be a requirement for agency spend to complement the internal staffing of the NHS, and we see ourselves as a major part of that,” he says. For Woods Ballard and Wise, what might remain a dream for many recruitment bosses looks set to continue for a some time yet. ●
Motivation and engagement A committed, motivated and engaged workforce is invariably at the heart of any successful recruitment company, and Day Webster is no different. Wise points to a generous commission structure, as well as a light touch management style. “We don’t micromanage staff. We let them get on with it and treat them as if they were starting their own business,” he explains. Neither are sales staff burdened with business development or compliance, with around a quarter of the company’s staff engaged on the latter. Woods Ballard is no supporter of management by fear, and has gone on record in the past to extol the virtues of a more ‘carrot than stick’ approach to managing and motivating staff. Nor is he a supporter of what he sees as the excessive and counter-productive use of key performance indicators (KPIs) in the recruitment sector. In contrast, WWW.RECRUITER.CO.UK 27
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