UK Edition
Boss of recruitment giant Hays: 'you need the right person, not a person'
Perhaps it is only natural that someone who spends their weekends out on the water sees himself as the captain of a very different ship during the week.
Navigating the financial crisis was the biggest challenge Alistair Cox has faced during a decade at the tiller, he explains dramatically, but like all reliable mariners he successfully steered through the fierce storm that followed.
It’s not an original metaphor for what was the biggest economic shock in several generations, and from most businessmen it might sound clichéd, but the charismatic Yorkshireman gets away with it.
“Nobody expected a recession but one came along and it was big. It’s how you lead your business through that, it’s about your North Star and where you are going. The wind will blow you off course but the North Star doesn’t change,” Cox chuckles, warming to the nautical theme.
Cox is the irrepressible boss of recruitment giant Hays. Fizzing with infectious energy, it is easy to imagine him attacking his early morning Weetabix with the same gusto that he runs a global empire that finds white-collar jobs for hundreds of thousands of people every year.
Despite a life spent criss-crossing the globe, the flat vowels of God’s own country jump out immediately, and although Cox clearly sees himself as a forward-thinking boss, it’s a relief to discover he isn’t too intent on being taken seriously.
Tanned and grinning, he relaxes in a leather boardroom chair in the company’s head office, high above the mid-morning chaos of Euston Road, with views several miles north to Camden.
Today, the good ship Hays is in fine shape, having just reported its best half-year figures in eight years. Turnover rose 7pc to £2.5bn, while pre-tax profit was up 17pc to £96m. First-half operating profits exceeded £100m for the first time since the dark days of the crash.
“There were many positives. I have to say the business hasn’t felt in such a strong position since I came.”
Record profits were posted in more than half of the 33 countries Hays operates in, an impressive performance let down by the UK, its biggest market. Revenue fell 10pc while operating profit plummeted by nearly a third. The worst-hit region was London, where fees slumped 15pc in the aftermath of the EU referendum. Already though, the country looks to have shrugged off the Brexit blues.
“The UK went backwards but given the uncertainty over Brexit that is understandable. It’s already old news though. There have been signs of improving sentiment for the last two or three months in the private sector, which is 75pc of the UK business.”
A tough home market would have been a major headache in 2007 when Cox joined. Back then, it accounted for three-quarters of overall turnover. The recession prompted him to embark on a dramatic and risky reshaping of the company as profits nosedived from £250m to less than £90m in two years.
“It was dropping like a stone so we had to cut out a lot of costs. We went into the recession with the UK as the dominant part but we needed to diversify to spread risk.”
It was a risky move but it has paid off. Now, roughly a quarter of its fees are generated in the UK, while the remainder comes from overseas. Germany is its biggest single market, yet Cox feels his team have “only scratched the surface” there, and in Australia, Hays is bigger than its five nearest rivals combined. There are high hopes for Japan and the US.
“The UK is important and always will be. It’s where we came from and you should never lose your roots. But we have built on the global stage and that stands us in good stead.”
It has been a tough, drawn-out transformation, and although Hays still hasn’t rebounded to where it was prior to the recession, the company’s share price is up nearly 70pc since the downturn officially ended in 2009.
Cox joined Hays after a colourful career that began as an aeronautical engineering graduate at Hawker Sidley in Yorkshire “building planes”. He got the travel bug soon after leaving university and quit to join Texan oil services giant Schlumberger, impressed by its promise to “train you to be the best in the world and have the opportunity to go anywhere”.
“I thought, ‘That’s exciting’,” he says. The company posted him to Norway, then the US.
After putting himself through an MBA at Stamford, his career path took a series of twists and turns. Like many FTSE bosses, he opted for the cut and thrust of management consultancy, working for McKinsey in the UK. He then moved on to run the Asian operations of cement maker Blue Circle.
When the venerable British manufacturer was sold to France’s LaFarge at the turn of the millennium, Cox moved to Xansa, a British outsourcing company that ran IT contracts for Tesco, Barclays and other big corporates, where he built up its highly-regarded Indian operations. It was taken over just weeks after Cox arrived at Hays in 2007.
“I’ve always felt fortunate to get a job with a truly excellent company that was a true leader in what it did, and a great place to work and develop my career. Every time I’ve moved, I’ve always been very excited about the next thing. It’s not just about what your industry does but also what issues it faces and how relevant and interesting they are to you.”
Recruitment appealed for several reasons. Hays was a large people business facing serious technological challenges, it was a British firm looking to expand overseas, and it wanted to become the most powerful brand in its industry.
“So you take that and it’s a very interesting mix of things to work on.” The financial crisis could easily have scuppered Cox’s ambitions but he pressed ahead with the plans.
“You have to adapt. Everything I came in to do still applied the day after Lehman [Brothers] collapsed”.
Despite the recruitment industry’s reputation for being staid and unsexy, Cox is almost evangelical in his passion for it.
“We help people find their next fantastic career move and our clients find the right people. I think that is a very noble thing. We did that very well in the UK and we were starting to do it well in many countries around the world. It wasn’t just a case of, ‘Let’s defend the business by diversifying’. It was, ‘Let’s take this brilliant model to millions of people’.”
Last year, Hays helped more than 280,000 people find work worldwide, placing 67,000 people into permanent jobs and 220,000 people into temporary roles; a figure that makes it the UK’s biggest recruitment firm.
“That’s a heck of a lot of people saying to their partner or family, ‘I’ve just got my dream job and we are moving up in the world.’ That gives me huge personal satisfaction because I know what it did for me when I got a great job.”
The advent of online job boards in the Nineties was originally seen as an existential threat to recruiters, who still relied on a roladex of contacts. Cox was determined to see it as an opportunity and set about forging alliances with some of the big names that had muscled in on the action.
“You can find lists of the people that could do the job yourself but which ones are the rights ones? Who’s going to do the job you need doing and fit in with your culture, stick around and deliver something extraordinary? That’s the secret sauce that we bring.”
Having watched the sudden rise of LinkedIn, Cox flew out to meet chief executive Jeff Weiner at the company’s Mountain View headquarters in California in 2012. They struck a deal to share each other’s databases, and as a result Hays is now in the top 20 of all companies worldwide on LinkedIn by number of followers. Some 1.75m receive the company’s surveys, research, and articles about CV writing and managing people.
“People were saying, ‘It will be the death knell of recruitment’, but it has been a very powerful platform for us.”
A similar tie-up with Australian job board Seek means the pair have captured 90pc of the country’s entire 6 million-strong white-collar workforce. It’s far more than just a numbers game though, he says.
“You can stick an advert on the internet and thousands of people will apply but how do you find the one that’s absolutely right for you? It’s just volume. You need to find the right person, not just a person. The number one reason why a new recruit fails is the cultural fit or mismatch. Our job is to understand the fit and marry it and that means building a relationship with that person.”
One of Hays’ most widely read reports is its “global skills index”. The most recent found that Britain’s skills shortage had worsened for the fifth consecutive year. It said many UK university degrees failed to offer the knowledge that businesses wanted and that more than half of graduates were working in non-graduate roles. It’s a topic that soon has Cox drumming his fist on the table.
“There is a mismatch between what education is churning out and what industries need so we have a very acute shortage of STEM [science, technology, engineering and mathematics] skills and it’s going to get worse because there are a lot of people retiring,” he says.
The skills gap, which he says will soon become a chasm, is being exacerbated by the current uncertainty over EU migrants. However, he believes Brexit presents an opportunity to improve the situation by opening the UK job market to people from outside Europe.
“If we are going to be a world-class country, you need world-class people and I don’t feel the UK’s doors have been open to the world’s best talent for years because we have had restrictions on non-EU migration.
“I fail to see why we would welcome a very good engineer from Europe but close the door to one from Singapore or Canada or Australia. It makes no sense at all.”
“It will take at least a decade to solve [the skills gap], if not longer. In the meantime, we should market Britain as a place that is open. Skilled migrants are what we need to fuel our industries, drive our economy and create opportunity for more people.”