This blog was hard to write. Not because I have a particular affinity with any global recruitment brand, but because I have a new laptop and have forgotten all my passwords, including the one for WordPress where these things are crafted. More on this later.
The plight of the global recruitment industry continues this week with the news that Hudson Australia has entered voluntary administration. “Voluntary administration” is a strange one in this case. The news first broke when contractors were emailed. They were also told that the business was profitable and solvent. The CEO Dean Davidson, in a chat with the always excellent Ross Clennett, then said that there were no planned job losses (currently) and that morale internally was “strong”. So a business that is trading profitably is placing itself under administration? Meanwhile, the staff are over the moon, and contractors aren’t worried about whether they’ll be paid next week? Now I would never encourage drug use, especially not something as damaging to society as methamphetamine, but if smoking it allowed me to have such a positive outlook as Dean Davidson, I’d be sorely tempted. It all seems slightly odd.
The reality is that these things don’t happen unless there are no other options. The mechanism, known as a Deed of Company Arrangement in Australia, is what you do rather than plunge into liquidation and pay none of your debts. To see why they’ve reached this point, we probably have to take a stroll down memory lane. Hudson traces its origins to legends of the industry Jeff Morgan and Andrew Banks of Morgan & Banks fame, which listed in 1993. Six years later they merged with TMP Worldwide, only to split the business four years after that. One half into the job board Monster, the other into what became Hudson Australia. Some of you reading this may have started your career with TMP. Some may have started with Morgan & Banks (if that’s the case I’d suggest an aspirin each morning and vitamin D to keep the osteoporosis at bay). In 2018, Hudson Global sold Hudson Asia Pacific to the local management team for the princely sum of AU$6M. The deal also involved taking on over $6M of debt.
According to the Recruitment News Australia podcast, the purpose of Hudson placing themselves into voluntary administration is to restructure and potentially recapitalise, to reduce the debt, reduce the costs, but save the business. Apparently this will be achieved via a consortium consisting of the administrators and the current owners and management team. Why this should work is anyone’s guess. It’s the kind of logic a person who would describe the morale of a business in administration as “strong” might come up with. Personally, I don’t see how Hudson Australia (in any recognisable form) exists in 12 months, but we shall see.
This is of course part of a global trend. I blogged about it recently with our own Accordant Group. There is no need to single anyone out as it’s the same everywhere. Privately owned companies have the luxury of telling us bugger all until they call in the administrators, but a quick look at the share price of global recruitment firms since 2021 paints a grim picture:
- Robert Walters down 86%
- Robert Half down 77%
- Manpower down 73%
- Adecco down 68%
- Randstad down 66%
- Page Group down 70%
- Hays down 60%
- Accordant Group (NZX) down ~80%
I spoke at the RCSA Talent X Conference last year and said that any firm that hadn’t explored or invested in AI or new ways of working in the next 6 months was in big trouble. Most people just assumed I was being my usual dickhead self, but for once, I actually meant it. As I interpret the data, big global recruitment groups are royally f*cked if they continue to do what they have always done. They do not have a future. Instead, I think the only way to make this industry work is now the following:
- Be so agile (and that means small and boutique) that you can turn like a jet ski, not an oil tanker
- Invest heavily in technology and never say “AI couldn’t do this“
- Think of a new way of working. Not contingent. Not a bunch of former backpackers sitting in an expensive Sydney office. Not the same way it’s always been done
- Have such ridiculously strong relationships and networks that your clients would save you over their kids from a burning building
- Hire people (new to the industry if necessary) who do not have dogmatic views that go against the above
Big recruitment firms used to leverage the power of their global brands. There was something reassuring about a Hudson, Hays, Walters, or Page. Around the same time we’d use this logic to say say things like “no one ever got fired for choosing Microsoft.” And that brings me full circle to the start of this blog. My lovely new laptop is fast, small, cheap, and most definitely not Microsoft.
Have a good weekend.
^SW
