Working towards success – de Poel’s recruitment story

06 June 2012

Most industries in the UK make use of temporary workers at some point. But how do employers make the most of their relationships with temporary recruitment agencies? We met up with Matthew Sanders, co-founder and CEO of de Poel, to find out more about the benefits of agency labour. His approach is to help companies enhance their relationships with recruitment agencies, saving money and adding value, while at the same time, improving standards. We asked Matthew about his background in the recruitment industry, the importance of embracing new technology and his long-term ambitions for de Poel.

We started off by asking Matthew how he first got involved in the recruitment industry.

“I’ve been in the recruitment industry for 17 years now, but there was no specific plan to move into recruitment. I was working for Cable & Wireless prior to joining this industry and had gone to a permanent placement agency looking for a new role. They said that they had a sales position with one of their sister companies that I might be interested in. When I asked what the company did, they told me that they placed temporary labour, which was an area I wasn’t aware of at the time. It was mainly industrial firms; logistics firms and warehouses and so forth. At the time, I couldn’t understand why someone would pay a third party to place people in their company – I thought you just placed an ad in the local paper. But I took the job, loved it and the rest is history.”

What was the impetus to set up your own business at that time?

“I’d been working for ABC Services, which later become Blue Arrow – a part of Corporate Services Group – and then for Manpower. I felt I’d been very successful in the recruitment industry and made a lot of money for the company, and it was the ideal opportunity to set up something new. I was financially secure, so I had money behind me, and I was young – 26 or 27 at the time. I thought now was the time to do it before I got married and had kids and it becomes more difficult.

When people leave a big player in the recruitment industry, they’ll usually go away and start up their own high street agency. I didn’t want to do that, so myself and Michael Cambell decided to set up de Poel in 2001. Initially, we looked at buying a franchise from an American company which was a general cost-reduction consultancy firm. As we went through that process, we realised that all these same cost-reduction rules could be applied to the temporary recruitment market. Historically, people who buy agency labour haven’t done it that well, so we thought ‘Can we add value for the people buying the labour and the people selling it to them?’ and the answer was ‘Yes, we can! Let’s go and do that’. So that’s where the idea for de Poel came from.”

Has your ‘e-tips®’ software been an important innovation in the recruitment marketplace?

“One of the things we hadn’t realised, because we hadn’t been directly involved, is that agency invoicing can be shocking. As an industry, it operates on a 15% to 20% error rate. The process isn’t great: the temp gets a piece of paper that sits in their pocket, gets crumpled up and gets faxed or emailed to the agency. Then someone enters it into one system for payroll and one system for invoicing, as agencies generally have two separate systems. With all these different points of entry and opportunities for misinformation it’s not surprising that you get a very high invoice error rate.

So this is why our e-tip®s software came in: I knew all of this could be done on the web. e-tip®s is really the thing that’s made this business work - without it I don’t think we’d even be here. It’s the only independently owned web-based, electronic timesheet and invoicing processing system (e-tips®). We’re not linked to any agency, so we’re the only vendor-neutral organisation to have this system. We own the software, it’s evolved over time and it’s continually being grown and developed. We have to do that to stay ahead in the market and to provide value for our clients.”

How important has consistent relationship building been in creating your existing client base?

“It’s been very important: it’s been vital to our success. It’s difficult as the contacts at large companies tend to move around a lot: there aren’t many instances where we’ve dealt with the same person since winning the account. In terms of adding value for our clients, it’s twofold. Some of the agencies have been quite resistant to us getting involved in the client relationship, but as time has moved on they’ve begun to appreciate the things we add. Agencies tend to work on a non-contracted basis, so we’ve added value by putting a contract in place between the agency and the client which gives more stability. Agencies will also get paid a lot more reliably, as our invoicing is 100% accurate – and I mean that literally: we’ve never raised a credit note! So, what we do is cement the relationships between the agencies and the clients.”

Are social media tools an important part of how you market the business?

“Yes, they are, and growing more so. If the truth be told, I’m not sure how important social media are right now, but in five years time there’s strong evidence to indicate that most communication may not be through email and will be done via social media. I see Facebook as a social medium while LinkedIn tends to be a lot more business centred. It’s certainly more serious and business-minded on LinkedIn, whereas Facebook is more fun and where we talk about our charity work.

In the future I do see social media being more and more important. So we’re positioning ourselves as being a leader in that space now, which means we won’t be playing catch-up in five year’s time.”

Do you see temporary work playing an important part in the UK’s economic recovery?

“Temporary work is a great way into a business for people. It allows both parties to ‘try before you buy’. The temp can work for a company and see if they like them. And from the employer’s point of view, after a few weeks of work from a temp you’ve got a pretty good idea of their skills – much more so than you would from an interview or an assessment. So, broadly speaking, I think you will see more people taking on agency work.

I think there’s a different problem with graduates. Once they’ve left university that can create an unrealistic expectation of the salary they’ll get in their first job. Speaking to personnel and HR departments with a number of our clients, they find exactly the same issue. I think we need to be a little more honest with our young people: there’s a big difference between getting a first-class honours degree from Oxford or Cambridge compared to a third from an ex-polytechnic. I think graduates need to be a little more realistic about the jobs they can do.”

What aspirations do you have for further growth in the business?

“There are lots of opportunities still in the UK. Our turnover is just shy of £500m this year and the industry spends around £24bn on temporary labour in the UK, some of which wouldn’t suit us as they’re companies who don’t spend more than £3m on temporary workers. But there’s still a market out there worth several billion pounds for us to go after, and we do have aspirations to move into Europe and North America as well. We’ve got a real drive that by 2014/15 we’ll have a £1bn turnover.

We launched another company last year called Umbrella Paraplus, which is an umbrella company for temporary workers. It allows them to turn some of the PAYE gross salary into non-taxable expenses using official HM Revenue & Customs guidelines. So that business is growing alongside de Poel.

We also formed another company about 12 months ago now which specialises in placing the disabled and the disadvantaged into work. We ask agencies how many of the temps they place are disabled and work with providers to increase the numbers. It’s a limited company, but it’s a not-for-profit company really – we certainly don’t see it making any profit. What’s been very interesting has been the enthusiasm we’ve seen from companies from a corporate social responsibility perspective. But actually getting people to place disabled candidates has been more difficult. We could certainly do with a lot more support for disabled workers.”

Do you think being a privately owned company has been an advantage for de Poel?

“We’ve got very ambitious growth plans, and I hope we’ll hit them all, but we’re not a public limited company. I own all the shares – which means there’s no bank or shareholders to answer to. If we want to move into something different, we can do that. That’s a definite advantage to being a limited company.

I’ve got a good board and we’re all very different people, so between us we work very well together. You hear people talking a lot about strategy, but it really comes down to getting more clients and keeping the ones you’ve got – it’s not rocket science! We’ve hardly lost any clients since we’ve started trading, so any time we win a new client the profit just goes straight onto the bottom line.”



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