Brexit, global recruitment trends and APAC fragmentation. Miles Hunt interview with Steve – Part 4

Brexit, global recruitment trends and APAC fragmentation. Miles Hunt interview with Steve – Part 4

January 26, 2017 Podcasts 0

miles-steve-interviewOn 18th November 2016 Benula Capital invested into idibu. The man behind Benula is Miles Hunt. He came to our annual get together in Barcelona – a great opportunity for me to interview Miles on different topics.

This fourth part focuses on: 1. How do you feel now about Brexit and the effect it’s going to be having in our market? 2. What are the trends that you’re seeing across the recruitment market globally? 3. What are the key differences between APAC, US, UK recruitment markets and Europe? 4. How to deal with fragmentation in the APAC markets? Part 5 will focus on Talent pooling, automation and innovation.

Podcast transcript

Steve: I wanted to take a bit of a look at the recruitment industry in general, get a few thoughts from you on that. We’re now a little way past the Brexit vote. How do you feel now about Brexit and the effect it’s going to be having in our market?

Miles: Well, if you’re going to look at it from a real macro level, the concern was that Brexit and the concern raised by all these economic and political commentators was it’s going to have potentially a significant ripple effect on the global economy. I don’t think that’s the case, although what’s actually has been happening politically, I think it’s a bit of of a snowball in terms of what people describe as populism or certainly is this rebellion against elites. It seems to be picking up pace and whether or not Brexit might have been a catalyst, tt certainly added fuel to those flames. So, it’s having maybe on a global level some impact but nothing like so the economic impact that people were forewarning before the vote.

And again, if we go down a little sort of macro but within the UK, there hasn’t – have nothing like the effect that people predicted to have. In fact, the economic performance of the UK has been surprisingly positive in the six months post that decision. Clearly, there is still a huge amount of uncertainty people talk about all the time, and until we actually know where we stand, I think people in business are going to struggle to work out how to best plan for the future. I think some investment decision and after are being paused or put on hold. So, it has been having some impact.

I’m personally pragmatic of well… we get on with it. The recruitment sector I think will have to go through a number of changes and will have to adapt to particularly when it comes to the checks on immigration and possibly the inability to maybe gain access certain parts of the European Union for people, and it could have an impact. We just don’t know what it will look like yet.

But what I would say is, anyone who is working in the industry who is concerned about the implications of the migration controls that we’re putting in place, what I would say that is, we thrive as an industry where we’re able to find solutions to intractable problems or challenges that organizations face when it comes to finding talent.

The more regulation that exists, the more that the challenges are put in the path of companies that are looking to find these people, the more that we are therefore relevant, and we’re going to be able to help them to solve those challenges. It doesn’t mean that’s not easy, but I think that it’ll mean that we are more relevant to those organizations and to the leadership of those organizations. So, I don’t think that it doesn’t need more than – it will do any more than add to the importance of our industry, but it will create some challenges in the short term.


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Steve: Okay. And what are the trends that you’re seeing across the recruitment market globally? I bring this into my next question as well which is, you’re traveling around, you’ve got visibility of many different markets. What are you seeing, not just the trends, but what are the key differences you also see between, say, the Australian, APAC, US, UK markets and Europe?

Miles: Okay, that’s a big question. There’s lots that you can cover. It can actually be the subject of a podcast in itself.

I think you can look at it in a number of different levels. You can look at it in terms of economic differences between countries. You can look at it in terms of the reletive stage of development of the recruitment sector within those different countries. You can look at it in terms of the cultural and political context because you have very different approaches to labor and employment and the management and regulation of the labor and employment in different countries. And those all impact on our sector.

And of course the other things, socio-demographic issues such as population size, population growth, the aging/mature populations, industry sectors, the economics… There’s a whole series of things that influence those countries.

But if you take a couple of broad thoughts. There are two different approaches to take when it comes to employment and the old adage that whenever any country where the population tends to enjoy beer over wine, recruitment is fine. And whenever a country enjoys wine over beer, recruitment is pretty queer. I think it’s a fairly true adage. If you look at the countries that surround the Mediterranean where wine is drunk rather than beer, the barriers and obstacles are significant.

Whereas within the beer drinking northern European countries, it’s definitely – we are seen as being much more relevant and we have much more greater impact on those countries and economies. And I think it is a broader rule of thumb. Across the world, it seems to be the case. So, that’s a good adage.


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So, that’s the question. Are you living in a socio democratic country where they’re taking a sort of more protective approach to workers’ rights over flexible working, or are you operating in a country where flexible workforce is seen as being pragmatic and seeing the benefits of that? Maybe therefore some trade-off in terms of employee protection. And I think that’s why we’ve seen such growth in the US, the UK, Australia and countries where there’s beer drunk, but also where there’s a bit more flexible working… It’s probably more because the risk is so great in employing people that organisations want to off lay that risk. They’re not looking to seek solutions to talent acquisition. They’re looking just to off lay the risk of employment, and that’s what we see in countries such as France and Spain, Italy and South American countries, and also one or two of the Asian countries, particularly China.

The others in terms of the – the one thing that drives growth in the recruitment industry is structural change. So, countries that saw change from being more protective to being more open. And the two great examples of the last 15 to 20 years, the first is Japan, which up until the turn of the century, temporary staffing was illegal. And it’s now was made legal in stages and Japan has now become – it’s now the second largest staffing market in the world. And that’s grown literally in the last 15 years.

Another country which has grown significantly since the reforms of 2004 is Germany where again, temporary staffing was essentially illegal, and then was liberalized. And now, Germany is now fast becoming – I think it’s number 3 terms of size in Europe, if I’m right. Fast catching up with the UK and Netherlands, and it’s probably been the fastest growing staffing market in Europe for to the last 10 years. So, that’s another factor.

And then third is the size of the market. Australia is a good staffing market, but actually they only have a population of 25 million. Japan probably got a staffing market purely for international English-speaking requirements, equals in size to Australia even though – because Japanese population is 150 million. The real opportunities I think are going to be in the countries – in my Empresaria experience – where the market is very mature but they are going to be growing fast. So, Indonesia with a population of 240 million has a very small staffing market obviously, the GDP, per capita is low. But it can only grow. I say the same for some of South American countries. Even countries in Europe like Turkey, for example – we’re looking at some great opportunities for these countries with high populations.

Steve: And what about fragmentation in those territories? Because obviously, I live in Asia, and the APAC markets are very fragmented. You’ve got plenty of agencies out there, but dealing with them, you’ve got different cultures whether it’s Singapore, Hong Kong, Australia, Indonesia. How do you find that fitting in with models and perhaps tying in with what you’re doing with APSCO?

Miles: Well, first of all, in terms of models, it is one of the challenges at a global recruitment conference in Singapore a month or two ago. The common theme coming from talking to different delegates that came from around the Southeast Asian region or from Asia region is one size does not fit all.


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The approach to temporary staffing is completely different if you’re in Japan to China to Singapore. The uptake in managed service solutions is just not the culture or something which has taken off in Asia the way it has taken off in Europe and the US. And what works in Thailand won’t necessarily work in Malaysia or in Indonesia because we’ve got to appreciate there’s massive variances of culture. Yes, there are some similarities, but I think it would be very wrong to suggest to anyone to think that actually what works in one place will work in another.

In terms of APSCO, the reason why APSCO has grown and expanded firstly out of the UK but also throughout Southeast Asia is: a) because the UK recruitment industry is quite International. 60% of UK recruitment companies operate in some shape or form outside the UK. So, by going outside the UK, APSCO Members in the UK wanted representation outside the UK, and that meant that we sort of follow our members to an extent.

But also, it’s where there’s a lack of local representation or where representation doesn’t actually support professional staffing in the way that APSCO propose is what professional staffing in the UK. There’s a gap there that needs to be filled. So, in Singapore, now APSCO is the primary trade association as it is in Hong Kong. Now in Australia, having merged with ICRA, it is providing similar services in Australia. And I think that reflects the fact that as the industry grows, so does the trade association support environment.