| Skills shortage means more opportunities for recruiters |
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| A global skills shortage is offering huge opportunities for recruiters who can source candidates with the appropriate skill-sets on a worldwide basis. As head of one of the world’s largest recruitment firms, Robert Walters talks to Fiona Reddan about his experiences to date in building up the firm, future plans for growth, and how the firm is reaping the opportunities in the ‘wild west’ of the recruitment industry in Asia. |
WWith a strong background in professional services and recruitment, having worked for both Deloitte & Touche and Michael Page International, in 1985, at the age of 30, Robert Walters decided to go it alone, and set up his eponymous recruitment firm.
Since then, Walters has overseen the growth of Robert Walters into one of the world’s largest specialist recruitment consultancies. Today, the company employees over 1000 staff worldwide.
From merger to de-merger
In 1996 the company made its first foray into public trading when it floated on the London Stock Exchange, becoming the second fastest growing share on the exchange a year later. Following this, StaffMark, a US recruiter of executives and corporate managers acquired Robert Walters for $178.8 million in stock.
However, the deal was not a success, and when asked what he would have done differently in his career, Walters says that he wouldn’t have merged with StaffMark. The merger came to an end in 2000 when StaffMark sold its equity interest in Robert Walters, via an initial public offering (IPO) on the London Stock Exchange. Although the timing wasn’t great, as markets were, according to Walters himself a bit ‘wobbly’, Robert Walters floated successfully, and the next stage of its development began.
Today the firm is one of the top three international recruitment firms, alongside Michael Page and Hudson, with an international network in 16 countries.
The Asian tiger
Alongside France, where Robert Walters is ‘snapping on the heels’ of competitor Michael Page, most of Robert Walter’s recent growth has been in Asia, and it is becoming a huge market for the firm. It already has offices in Singapore, Japan and Hong Kong, and Robert Walters recently opened offices in Malaysia, India and China, and is currently looking at expanding into the Thai market. Half of Robert Walters’ staff are now located in the Asia Pacific region.
The biggest single growth is in Japan, says Walters, ‘due to a seismic shift from jobs for life to people changing careers’, but he adds that the rest of Asia is also highly profitable. To illustrate this, he gives the example of a recent deal which Robert Walters pitched for in Tokyo – the firm looking to appoint a recruitment consultant would only accept tenders from firms who charge over 35 per cent in fees.
After the firm’s initial exposure to the US market via its merger with StaffMark, Walters says the firm now has ‘bigger fish to fry’. Although Robert Walters has an operation in Times Square in New York. He says that the market is very saturated in the US, and that the real opportunities for the industry lie in Asia, which he likens to the ‘wild west’ of recruitment.
Dealing with skills shortages
As is clear from above, recruitment is now very much a global game, but recruitment firms just don’t source candidates for the local markets in which their office is located – candidates are now a global commodity.
What’s behind this ‘export and import and talent’, as Walters calls it, is a global skills shortage. ‘What we’re finding everywhere in the world is a skills shortage for professionals – a pretty acute shortage in fact,’ he says. ‘Demographics is a key factor behind this’, he says, with declining populations leading to lower numbers of professionals working. As a result, professionals are benefiting from huge salary increases he adds.
Walters produced a mini league table for FINANCE of the skills most in demand globally (see Table 1), with finance professionals such as accountants/auditors coming out on top. He says that the growth in demand for human resources skills is due to an increase in employment laws. Similarly, although it didn’t make the list, Walters says that increased regulation is driving the growth in demand for more risk/regulatory compliance professionals.
‘With every year that passes, there is more new regulation, so everyone’s job is getting more sophisticated,’ he says, which also translates into increased demand for specialist professionals, he adds.
Walters’ solution to the skills shortages problem is the ‘highly educated work forces in India and China’, adding that it’s, ‘less a question of outsourcing and more a question of insourcing’.
With regards to the potential immigration problems ‘insourcing’ staff can have, he cites the example of Australia’s ‘points system’, which means that it is not a question of where you’re from, but rather if you have the requisite skills, which will dictate whether or not you will get a work visa. He thinks that something similar might happen in the UK.
The global skills shortage is not only impacting on firms’ recruiting strategy, but also on Robert Walters’ business strategy. The firm now sources candidates globally, and Walters gives the recent example of a trip by the firm to South Africa to hire 55 chartered accountants for a UK investment bank.
The Dublin office
Robert Walters opened its Dublin operation back in 1999, with just four staff – two consultants in banking, one in commerce and a secretary. Today the firm, which is located on City Quay opposite the IFSC, is headed up by Louise Kelly, and employs 31 people.
Although the Irish office is profitable in its own market, and, in Walters words, ‘happy as larry’ in its own right, the office also interfaces a lot with Luxembourg, Australia and New Zealand, hence its business is larger than just the domestic Irish market.
Reiterating Walters’ point about the office actively engaging with international offices, Kelly adds that the Dublin office invests heavily in candidate sourcing strategies, which includes conducting roadshows to Australia, London, Luxembourg and Scotland every year, ‘to capture both the Irish returning home and to attract the international contractor workforce,’ she says.
Going forward, Kelly says that the focus for the future remains on, ‘finding new and innovative ways to source top quality candidates for our clients and attracting and retaining the best consultants in the market.’
Staffing
When it comes to recruiting his own staff, in general Walters prefers to hire industry professionals as recruitment consultants, rather than hiring people from other recruitment firms. Another quirk at the firm is that unlike other recruitment firms, where consultants make most of their wages on a commission basis, Robert Walters operates as a non-commission house. According to Walters the advantage of this is that it means that the consultants aren’t ‘selling’ the jobs, and are therefore not so pushy when it comes to convincing candidates to accept positions.
Kelly adds that it also means that consultants, ‘are targeted not only on placing candidates but on client retention, candidate referrals and new business generation’.
Outlook
Although Walters is bullish on the prospects for his firm, he would not like to start a recruitment firm now. The reason, he says, is that there are too many ‘barriers to entry’.
‘The industry has become more grown up and bureaucratic. It’s now necessary to use a preferred supplier list, whereas before it used to be more relationship driven, and was more of an ‘art form’’, he says. He also adds that, in mature markets such as the UK and Australia, recruitment has become a commoditised product.
However, he also recognises the good that increasing rules and regulations have done the industry, by helping it to ‘sharpen up its image, and kick out some of the cowboys’.
Final words
Having built his company up to its present market capitalisation of around ?180 million, Walters has some prescient advice to offer budding entrepreneurs. He says that the biggest challenge for any owner/manager is ‘to learn to let go’. For him, this came when the firm employed around 30 people, and he no longer knew everything that was going on. He says this is the time to delegate, as a lot of businesses fail to get past this crucial point, because the managing director wants to micro-manage.
He recommends that directors ‘over-hire good quality people early on and delegate to these people early on’.
And if he himself could do it all again what would he change? ‘Broadly speaking I’m very happy with how I’ve built up the business, and have done a lot of things quite well,’ he responds – but adds that he’s disappointed that the firm still hasn’t managed to develop a UK regional office network. |
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| Article appeared in the September 2006 issue.
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