Headhunter builds on the value of good staff
Mathew Gollop revitalised an ailing executive search firm amid troubled times
WHEN MATHEW GOLLOP answered an advertisement for a job in Hong Kong, he never dreamed that a year later he would own the company.
Mr Gollop, 32, from Canterbury, England, says he 'kind of fell into recruitment', although he had 'blindingly average academic results'.
Recruitment enabled him to use his experience gained helping with his family's businesses. His father, an ex-rallycross driver, runs a Saab dealership and a garage preparing racing cars for competition.
Four years into a job with Hays Accountancy, the world's biggest recruitment agency specialising in financial and accountancy staff, he was regional business manager and bored. Flicking through Recruiter Magazine, he spotted an advertisement for jobs in Asia.
Envisioning palm trees and picturesque temples, he visited a recruitment consultant which resulted in his arrival Hong Kong in 2001 to join ConnectedGroup.
His timing was dreadful. 'The market crashed as I landed,' he says. But he carried on with his remit, which was to grow the firm's non-IT business. The founder had set up ConnectedGroup to focus on technology recruitment for banks. A satellite office was opened in Tokyo but it lost money to the point where costs exceeded revenues, forcing redundancies.
'The business was either going to close down or be sold but at the end of 2001 no one wanted to buy it,' says Mr Gollop. Nevertheless the founder wanted the company to continue, so Mr Gollop took a deep breath and stepped in.
'I basically bought it, repaying the amount of money owed as soon as we could. I had to financially underwrite it for the bank but there was no actual financial investment. I just took on the debts.'
Mr Gollop is now the major shareholder and managing director with minority shareholder and business partner Matthew Caddick who manages the banking and insurance team.
'Having a partner you can trust 100 per cent is vital,' says Mr Gollop. Mr Caddick's timing was even more unfortunate than Mr Gollop's, having joined the company one day before the September 11 terrorist attacks.
The pair took charge in early 2002. The first 18 months were tough, with drastic cost-cutting, restructuring and a move to cheaper offices in Hollywood Road. At the lowest point, they were down to six staff.
'We had to negotiate out of a lot of contracts and at one point everyone was on commission, with no salaries,' says Mr Gollop, who paid himself nothing and concentrated on keeping the business going.
These were lonely days for Mr Gollop. 'With no one to report to, who motivates you? Who picks you up when you're down?'
He credits his parents' support for getting him through. 'When your family runs their own business, too, you get more than sympathy. You get understanding and advice.'
Now the tables have turned. 'These days it's gone full circle and I can offer them advice.'
But he couldn't have weathered the storm without his staff. 'Everyone jumped on board and helped make it a success.'
It wasn't until the end of 2003 that he saw the beginning of a sustained upward curve. Staff now number 30, with three in Singapore and the rest split between Hong Kong and an office in Dubai, which opened last year to capitalise on what he calls a 'huge boom market'. Plans are afoot to reopen in Tokyo next year.
ConnectedGroup specialises in recruitment sectors, including investment banking, insurance, health care, technology, telecommunications, the media and commerce. The business in Hong Kong and Singapore is in mid- to senior-level executive contingent recruitment, similar to competitors such as Michael Page. Clients are charged commission of 20 to 25 per cent of the successful candidate's annual salary which is the market average, Mr Gollop says.
'Retained executive search, which is what we do in Dubai, is different,' he adds. Clients pay a fee based on 25 to 30 per cent of a candidate's first year salary: a third up front, a third at shortlist and a third once hiring is complete.
ConnectedGroup takes a flexible approach, using the internet and a detailed database, while looking for likely people and mixing the model.
'In each location, we are more of a local player. We don't have money for extensive branding and advertising. We come at it from a slightly different angle.' The clients appreciate the flexibility. 'They know those big companies do business one way and one way only.'
While he says his bigger rivals expect high staff turnover, ConnectedGroup's success is based on staff retention and correspondingly long client relationships.
Mr Gollop likes to hire experienced industry people from competitors. 'We have one of the best commission schemes for mid-to-large recruitment companies.'
But his success in retaining staff depends on more than money. He believes that the work atmosphere is a key element.
'It's open door [policy]. There is no distinction in terms of me and them.' When top-level targets are reached, the entire staff heads off for a short holiday with their partners. 'That helps everyone bond as a unit, so they see that we really do care about them and they enjoy the work environment as well as feeling financial motivation.'
The next big step is the mainland, which he sees as costly and risky. When the time is right, he plans cautious expansion, first into southern China. He intends to grow the firm organically or might consider listing on a secondary stock exchange, such as London's AIM, to fund a mainland foray.
Bigger recruitment groups are wary of China, he says: 'So if we already have a strong footprint there and are financially capable, we might be a marketable option.'
But even if someone came in with a pile of cash tomorrow, it would have to be the right buyer, he stresses. 'I wouldn't want to leave the staff high and dry in a company that was culturally different to us. But I am also very confident that we can do it ourselves without external investment. It will just take us a lot longer.'