Recruitment agency Anderselite operates in a highly-competitive sector where staff loyalty is hard to win. Chief executive officer Simon Trippick tells Tim Wickham why he thinks employee share ownership is the answer to maintaining that loyalty.
Anderselite is a leading recruiter for construction and civil engineering clients operating in the built environment sector. Its consultants find everyone from labourers who dig ditches to senior directors.
The company has some 1,200 contractors working for it at any one time, makes around 50 permanent placements per month, and receives about 1,000 CVs a week. It is 84th in the Solent 250.
“We have an established footprint in the construction industry but our market share is still relatively small, so there’s plenty of room for us to expand rather than look for new markets,” said Trippick.
Taking the MBO route
Local entrepreneur Phil Anders set up the business in Southampton with two partners in the 1980s before buying them out and launching Anderselite. The company was acquired by US recruitment giant CDI in the 1990s to give it a UK presence. Anders is no longer connected with the business.
Trippick joined in 2012 and led a management buyout (MBO) in September 2016 that saw him and chief financial officer Steve Smith become Anderselite’s majority shareholders.
Turnover for the first post-MBO year was around £60 million and Trippick expects this will rise to about £67m next year. Trippick said the company’s balance sheet and credit rating are strong after writing off some internal loans as part of the MBO deal and the company is looking forward to a period of robust growth.
“We’ve just celebrated our first year of Anderselite being 80% owned by its employees and management,” he said. “I gave us a B+ for the first year – we’re not resting on our laurels.”
Building staff loyalty
Trippick described the UK recruitment market as the world’s third largest after the US and Japan. “It’s a hideously competitive market. Staff churn is a concern because if you lose a recruitment consultant, their contacts tend to follow them – it’s very much a people business,” he explained.
Employee share ownership is helping to strengthen staff loyalty. There is only one class of Anderselite shares, so all our shareholders receive the same rights and entitlements. Out of a workforce of nearly 130 spread across the company’s seven UK offices, 30 people own shares directly and the rest benefit from an employee share trust that will apportion dividend payments equally among them. An elected staff representative attends company board meetings and there is staff participation in all key decisions.
Brexit and technology challenges
European nationals make up around 8% of the UK’s construction industry workforce, rising to about 30% in London, according to Trippick. “I’m not sure whether the construction industry has really got to grips yet with Brexit. We might have to open offices in Europe, employ people there, and send them on secondment to work in the UK, but that would add costs we would have to pass on,” he said.
The recruitment sector also faces major disruption from technology. “There is a big threat from internet recruitment models that use databases and don’t need face-to-face contact. However, for highly- skilled roles and senior, you will never replace direct contact,” Trippick observed.
Anderselite offers two innovative services that help differentiate it from competitors. Video screening allows clients to view short clips of candidates along with their CVs to help them decide who to call for interviews.
The company has also invested in scanning technology similar to that used in airports for validating candidates’ passports and confirming their right to work in the UK. This helps clients reduce the risk of taking on people not eligible to work here or who have fraudulent identity documents.
“Initiatives like these help us meet our promise of ‘creating a better experience’ for clients,” said Trippick.
“Owning your own business is great,” he concluded. “It’s particularly nice working with colleagues who are co-owners. We are all working towards a common purpose, creating value for everyone who works here.”