I had a real zinger of a blog mentally drafted this week, but alas, some serious recruitment news hit my feed yesterday, pushing my planned blog down the ranks. Rest assured, these more tabloid-friendly blogs don’t just disappear into the ether. They sit on my desk inside a folder labelled “Petty-minded Recruitment GMs”, to be dipped into at a later date. Maybe next week. Anyway, on to more important news. Many of you may have already noticed the LinkedIn post from Talent International‘s NZ Managing Director Kara Smith, but if you haven’t, here’s a few snippets:
It’s an exciting day for Talent in Aotearoa, as we announce our acquisition of People&co Recruitment. This acquisition broadens our reach to deliver enhanced services for our clients, contractors and candidates across New Zealand, demonstrating our unwavering dedication to our Aotearoa market. People&co Recruitment are a proudly majority Māori owned and operated provider with an impressive 18-year track record of excellence in serving Government, Not-for-Profit, and Private Sector clients.
And importantly:
In addition to gaining expertise and experience, this transition ensures that we will continue to be a supplier on the AoG panel, offering permanent, contract, and payroll recruitment services just as before.
For those who know nothing about anything, Talent famously missed out on a spot on the coveted All of Government recruitment panel earlier this year. Although less important for their Auckland operation, this was no doubt crippling for their Wellington business. Unlike most who didn’t make it however, Talent had the advantage of being an international powerhouse with pockets deeper thant most. As we have seen in the past, the only option for Talent to remain truly relevant in Wellington was to argue their case with MBIE and be made an exception (unlikely), or to buy their way on to the panel (and more on this later). Unsurprisingly, days after it became clear that Talent didn’t make it, every small to medium agency I know who were selected, received the same clumsy phone call from an Aussie Rec-to-Rec masquerading as an MA advisory firm. The calls went as follows:
“Hi there. We’re representing an international recruitment firm who are looking to acquire a business. This has nothing to do with Talent not getting on to AoG, but you did get on AoG right? Right?? Nope, we’re definitely not representing Talent International, no sir. Uh-uh”.
Anyway, long story short, these clumsy calls eventually hit the spot, with Sam Collins of People&Co biting having only acquired the business less than 18 months ago. This could potentially be the shrewdest bit of business since the Halo fellas sold out to Consult the day before Covid hit. What Sam sold for, we do not know – but if we get enough people drunk and ask enough times, someone will surely tell us. Anyway, what are my thoughts on this, and what should we all be thinking? Firstly, some people will be grumpy. In many ways, a firm that did not pass the selection criteria, and yet sit here today on the panel due to being richer than you, represents the ugly side of capitalism at work. Many people didn’t get on, and they have to live with the consequences and try and do better next time. Talent, being rich, can strongarm their way on to the top table. The socialist in me finds this unfair.
But…
Let’s think about this for a second. If you’re a recruitment firm who did get on, why did you tender? Well, you probably spent weeks writing a ridiculous proposal, followed by a ridiculous presentation, proposing ridiculous rates, because you felt that you would make more money by being an AoG provider. And you wanted to make more money to increase the value of your business, or to increase shareholder value and dividends. If you were to sell this business, you would expect to sell it for more because you’re on the panel. However, for those who are on the panel, ask yourself: would you be so moral as to never sell your business to another firm who wasn’t on the panel? Of course not. Yet we’re all grumpy with the purchaser, but not the vendor. People buy recruitment businesses to acquire contractors, brands, consultants, and access to clients. That’s the whole point of acquisitions in any industry. If you are against Talent buying People&Co then you are on a sticky wicket should you ever want to sell your business to anyone. You’re on the Westpac PSA? Best not sell it to someone who isn’t also on the Westpac PSA right? Firms shouldn’t be able to buy their way on right? Wrong. People&Co got on the panel and decided the rates. Talent will now have to deliver the promises and rates set out by People&Co. If MBIE decided that you couldn’t sell your spot, how would any recruitment firm on the panel ever sell their agency? AoG would be even more of a poisoned chalice than it is currently. This is business and I say “fair enough”.
So who loses out? Well, any IT Recruitment firm who is on the panel has another big, serious, well-run competitor. Although technically there are no new suppliers on the panel, the likes of Robert Walters are now competing against a global recruitment firm, not the much smaller People&Co. They will of course be grumpy. Next up will be those who tendered unsuccessfully. A bitter pill to swallow for sure, but whether they believe this or not, they also have the option to acquire a business. Acquisition isn’t just for the globals, and I know of at least one other who is going down that route. Hopefully that’ll be another blog. Also, I met with a firm yesterday who didn’t get on, and after threatening hara kiri for a couple of months, just focussed on private sector recruitment. Without the distraction of government, they’re flying.
And the winners are more numerous than you think. Firstly and obviously, Talent are excited. They managed to navigate some choppy waters, retain their staff, and are back where many feel they belong. Sam Collins is also an obvious winner. I’ve not met Sam as he had Covid, but have spoken with him on a number of occasions, and he’s a lovely, energetic, smart young man. I also feel that both the staff of Talent and People&Co are winning, and not just for the obvious reasons. Many acquisitions make sense on a spreadsheet, but from a cultural perspective are akin to forcing a Great Dane’s penis into a Chihuahua’s vagina. I know the guys at Talent reasonably well, and I’ve got to know some of the characters at People&Co a bit of late, and I actually think they’ll make fantastic bedfellows. The acquisition genuinely makes sense, regardless of AoG. They’re both good sorts who don’t screw people over, and I’ll think they’ll both add something to each other. Another less obvious winner is Jason Walker, and Recruitment Entrepreneur. I’ve blogged previously about how Jason is up against it trying to convince Kiwi Recruiters that they can actually sell recruitment companies. Well, the more us recruiters see people realising value by selling firms, the more of us will want to go it alone and do what Sam Collins has achieved. All of this helps create a culture and a market for those who want to build and sell in the future.
Anyway, back to more frivolous topics next week.
^SW
