Business Segment Interview in January 2018
Delivering Value in Staffing, a Global Need
Our objective is to contribute to society by providing job opportunities to as many people as possible. Driven by this ambition, Recruit has achieved remarkable progress with Staffing. Believing that the management method established in this business and the social value it provides are universal in this market, Recruit has stepped up M&A targeting staffing companies globally since 2010.
Rob Zandbergen Managing Corporate Executive Officer, Head of Global Staffing Business CEO, Recruit Global Staffing B.V. CEO, USG People Holdings B.V.
The social value we provide is best described as offering opportunities for life around the world to people from all walks of life. We do this through offering them work and career opportunities and at the same time helping organisations establishing an effective workforce to continuously move them forward. For many people staffing serves as a stepping stone towards a permanent job. It often helps young people find their first jobs and it provides a way to build work experience. Staffing is an important employment system for people who prefer flexible work hours and locations for a variety of reasons, and for people who wish to apply their extensive experience and advanced skills in specific kinds of work without belonging to a single company. From the client's perspective, having a flexible workforce, where the necessary people can be assembled at the necessary time and place, is essential for improving productivity. Clients also need highly trained personnel to boost their competitiveness. As the intermediary between the user and the client, we bring greater efficiency and suitable pricing in the hiring process, a major challenge for companies. By providing this added value, we support diverse working styles in constantly changing labor markets around the world.
Deploying a Management Method Established in Japan
When conducting M&A, our basic approach is to acquire a local company with insight on local markets, and transfer to them the business management knowledge we have accumulated. All the staffing companies we acquire have a high profile in their market and are trusted by people as a local brand. Respecting the value of their brands, we typically keep the original management team for running the business. The only change we make at the acquired company is the implementation of a method called Unit Management. This method draws out the abilities of the local company and motivates employees to provide better services, which leads to profits at the company.
The system of unit management entails dividing the organization of a company into small-scale units, each of which has a unit leader delegated with authority. Improving the EBITDA margin is clearly designated as the most important management objective and benchmark, and the unit is managed by having all employees keep this in mind when engaging in service related work processes. With both management and employees committed to producing results based on a shared benchmark, the business awareness of employees increases and decision making accelerates. To make sure these efforts are pulled off seamlessly, management must respect the autonomy of local leaders and team members, and we must create a corporate culture of openness and high information transparency. In other words, Unit management system is a system that fires up the ambitions of both management and employees.
Governance for Successful M&A
Recruit has acquired The CSI Companies, Staffmark and Advantage Resourcing in the US, as well as Peoplebank and Chandler Macleod in Australia and USG People in Europe. According to the "Largest Global Staffing Firms 2016", published by Staffing Industry Analysts (SIA), Recruit ranks fifth in the industry in terms of its share of the global staffing market. We will continue to engage in M&A with the aim of spurring further growth in the Staffing Business.
We have two important conditions for conducting M&A. One is an agreement with adopting our approach. Another is a deep understanding of the methodology itself. We also have to take a hard look at whether our presence would truly lead to an improvement in management at the target company. After acquisition, we intensively work with the management teams so that Unit Management system takes root in the organization. We often start to receive many suggestions to improve operations from division leaders and members immediately. After an acquisition, I become the Chairman of the acquired company and in principle, we stay with the original management team to run the operation. We dispatch a minimum number of personnel to the acquired company, who are assigned to roles under local management instead of being put in a supervisory role. Once part of our group, I make every effort to allow acquired companies to simply focus on business. Under such an environment, I fully trust the local mangers. When they fail to meet expectations, I request them to leave. Thus, by making management quality better and better, we can motivate employees and temporary staff and to grow the business accordingly.
Through Unit management system, I am confident in growing our Staffing into a world leading operation in creating value to society and in delivering financial performance.
Managing Corporate Executive Officer, Head of Global Staffing Business CEO, Recruit Global Staffing B.V. CEO, USG People Holdings B.V.
Royal Dutch Army, Ministry of Defense
KPN N.V., The Hague CFO KPN Telecommerce BV
CFO, SNT N.V.
CFO, Solvus N.V.
CFO, USG People N.V.
CFO and CEO ad interim. , USG People N.V.
CEO and chairman of the Board, USG People N.V.
CEO, USG People B.V.
Managing Corporate Executive Officer, Recruit Holdings Co., Ltd. (current position) Head of Global Staffing Business (current position) CEO, Recruit Global Staffing B.V. (current position) CEO, USG People Holdings B.V. (current position)