RECRUITMENT INTERNATIONALFebruary 2012

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25 www.recruitment-international.co.uk RI - February 2012

Initio International - No Compromise On Core Values and Integrity

By Recruitment International

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Back in 2009 Recruitment International featured Brendan Flood and reported on his MBO to acquire Faro Recruitment, from its Japanese owners. Fast forward two years to the present day and the business has undergone the remarkable transformation into Initio, prompting RI to revisit Brendan at his UK headquarters to discover more about this success story.

The HistoryInitio International was established as a result of an MBO of the staffi ng businesses that were part of OG International Company Limited, a substantial Japanese owned corporation. The company was led by Mr Okano, who himself was the former owner of Staff Services, one of the largest Japanese temporary staffi ng businesses until its sale to Recruit Company, also Japanese owned, in late 2008. The trading name of OG outside of Japan was Faro Recruitment Group, although many of the individual businesses continued to trade under their former

names. OG International elected to implement a change of strategy in 2009 and the decision was made to move out of recruitment in a controlled fashion and Flood led the MBO of the US and Spanish businesses, with enough capital to kick-start an organic build in the UK. The MBO completed in January 2010 and Initio International was born.

Brendan Flood said, “The MBO was an ambitious project for the management especially given that the Initio businesses made losses in 2009 and therefore our ability to generate fi nancing from the banking community was very limited. Our perseverance has, however, paid dividends because the journey has been a great success. We are adequately capitalised, we

continue to be profi table, defi nitely on a growth trend and we have a strong Balance Sheet. On an ongoing basis we have developed a very good

relationship with Sterling National Bank (in the US) and with Venture Finance (in the UK) and they continue to supply the company with the support we require”.

One of Flood’s proudest achievements was

made possible by the MBO and it was the chance to turn all of the company’s key employees into actual shareholders of the business. This was timed to happen on day one therefore enabling all the participating employees to derive the maximum fi nancial benefi ts from their efforts. It means that all of the companies within Initio International are completely owned by the staff with no external shareholders and little to no external debt other than Asset-Backed Lending. A move which Brendan describes as, ‘pivotal’.

Building A Reputable Business

The strategy of Initio International has not changed a great deal from that of Faro Recruitment, when it was outlined in RI’s September 2009 issue. Flood, Briand (US CEO) and Carmona-Moya (Spain CEO) have built the company on a very strong set of principles, underpinned by honesty and integrity. All the company’s employees have to buy into this mindset as there is absolutely no compromise on standards. Considering the changes since the MBO, Brendan said, “Clearly there are some changes, however we

“The MBO was an ambitious project for the management especially

given that the Initio businesses made losses

in 2009.”

By The Numbers

2009Pre-MBO£m

24.1

4.6

(0.6)(1.7)

TurnoverGrowth

Gross Profi tGrowth

Operating Profi tAdjusted EBITDA

2010Year 1£m

37.756%

6.848%

1.00.5

2011Year 2£m

43.916%

8.525%

2.01.7

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remain on very friendly personal and business terms with all of the former sister companies and we have in fact traded with several of them since the buy-out. Where clients require a more international presence we are still very capable of providing this. The over-riding secret to the success of Initio is that we strive every day to ensure that any interaction with any part of the group is positive, whether you are an employee, a client or a contractor. We constantly seek feedback so that we can continue to improve. “What did we do well?” “What can we do better?”

“Often, in the recruitment industry, when a candidate is placed the consultant moves on to his/her next order to be worked. We stay in contact. Relationships are very important to us and some of our candidates have been known to our consultants for ten years or more”.

This commitment to value has paid dividends for the three trading names of the company. Initio operates through Monroe Staffi ng Services in the USA (by far the largest part of the group), Longbridge Recruitment in the UK, and

through ALG Consultores in Spain.

In the US

Monroe Staffi ng Services LLC started in 1969, as a one-offi ce fi rm concentrating on contract design engineering. It now has 13 offi ces spread across Connecticut, Massachusetts, Rhode Island, New Hampshire and New York. Monroe has developed from humble beginnings, to a point where it currently operates from light industrial to fi nance, accounting, offi ce support and IT, on both a temporary and permanent basis. Since 2009 this business has been led by Matt Briand, CEO and President, who was previously the VP of Sales and Operations and has been with the company for 11 years.

Matt Briand said, “My team and I are committed to deep relationships, putting us clearly into a partnership position with each of our clients and

associates. Our continuing aim is to be the quality benchmark for recruitment consultancies in New England.”

With a combined tenure of almost 40 years with Monroe Staffi ng, the management team is committed to growing the company in 2012 and beyond. “We envision that the offi ce network will grow from 13 in 2012 and we will look at infi ll acquisitions to supplement our growing professional business”. Matt adds.

In 2011 the US operation opened two new offi ce locations, both of which were profi table on day one, not something many agencies have been able to replicate. For this year Brendan believes as many as 4 new offi ces will come online as the company leverages its favourable position with many blue-chip US and global companies.

In the UK

In March 2010 the Longbridge brand was acquired by Initio International. It came with a generally proud history, although Flood admits there were some ‘chequered’ moments in there. He said, “The brand came along, however, it did not have any people trading under the Longbridge name, therefore during 2010 and 2011 our task in the UK was to build an organic business driven by the desire to operate at the upper end of the professional spectrum of the industry. Many companies talk about values, but as previously stated these in Longbridge (as in the rest of Initio) are non-negotiable”.

In late 2010, Longbridge started to really develop and take on focus when its three teams specialising in Law, Sales & Marketing and Technology merged. In 2011 they did 20% more business together than they did apart in 2010.

Initio International - No Compromise

The US team L-R: Paul Polito, Steve Miller, Matt Briand, Steve Thompson and Erik Schwartz

27 www.recruitment-international.co.uk RI - February 2012

With Flood as the CEO there are three industry heavyweights managing the three teams; Daniel Lewis (Law), Jonathan Cox (Technology) and Darren Carroll (Sales & Marketing). “We are unashamedly niche and are the recognised specialists in each of our chosen areas. We believe that the future of professional staffi ng is to remain focused on specialist areas in order to provide the most comprehensive level of service that it is possible to provide. Clients expect us to understand their business almost as well as they do. We cannot deliver that level of service without being focused”. Darren Carroll, MD of Longbridge Sales & Marketing stated.

The stance has proven to be a winning one, from a standing start in 2010, the UK business has grown to one eighth of the group’s total gross profi t.

It’s in the UK that Brendan sees a high demand for new recruiters as organic growth and potential acquisitions are fuelling the company’s growth and its appetite for more people. The UK business is currently growing by 20% with excellent service lines to increase

this. Being based just outside of London the company enjoys the best of both worlds, easy travel arrangements and fl exibility. Once recruiters are on board they tend to ‘stick around’, staff turnover is extremely low and many of the 120 worldwide employees have been around since the company’s formation.

Brendan is adamant that new recruiters will have a strong focus on niche sectors, IT for example, law etc. What they will all have in common is a great opportunity to develop long term careers both in the UK and overseas.

In Spain

ALG Consultores was founded in 1994 by Luis-Miguel Carmona-Moya; the current Executive Vice President.

“It has been well chronicled that the economy of Spain has been very challenging over the past few years, with the sovereign debt crisis having a material impact on unemployment levels. The depth of client relationships that ALG has developed over the years has allowed it to weather the worst of

the storm. Old fashioned hard work has allowed us to replace the declining public sector needs, with an increased offering in the hospitality sector and also, very excitingly, we have moved into the movie business!!” says Brendan.

“During 2011 we provided extras (temps) to work on two major movie productions, one of which was a period drama about Queen Isobel and the exploration by Christopher Columbus to the New World. In this movie we placed our youngest ever temp – a six week old baby for the christening scenes at the beginning of the movie”.

“Being specialist in the automotive, hospitality and training sectors, ALG has managed to continue to deliver what our clients require and are now seeing positive growth in our two markets of Madrid and Barcelona” said Luis-Miguel.

On Core Values and Integrity

The UK team L-R: Jonathan Cox, Brendan Flood, Darren Carroll and Daniel Lewis

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As well as running the Spanish operation, Luis-Miguel plays a very active role in the recruitment industry in Spain, being on the Executive Committee of Fedett, the temporary staffi ng professional body.

Brendan and his management team meet regularly to discuss and ensure that the company is on track to achieve its objectives and to help them in the process, they have taken on board some very strong non-executive directors.

Non-Executive Support

Initio International is supported by two non-executive Directors with a wealth of experience in the recruitment industry. As a management team Brendan is very aware that he needs to have strong advisors who continually challenge his Board’s thinking and help them to ensure that they are moving in the right direction.

Jeff Grout

Jeff Grout was the UK Managing Director of Robert Half International, the largest specialist recruitment consultancy in the world. A graduate

of the London School of Economics, he joined Robert Half International as a Recruiter at the age of 28, after an eclectic career as a van driver, passport offi ce administrator, cleaner, world traveller and local government town planner. He remained with Robert Half International for almost 21 years and built up the UK operation from two offi ces and 12 staff into a business with a domestic turnover of £65 million, 19 offi ces and over 350 staff.

Listed in the '100 Best Business Speakers in Britain', Jeff Grout is in considerable demand as a motivational business speaker, conference chairman and interviewer. Jeff works with a number of the leading speaking agencies and has spoken for a range of

clients including Deloitte & Touche, Morgan Stanley, Tesco, Telewest, Sport England, BAA, Ernst & Young, UBS, Football Association, Strutt & Parker, Chartered Institute of Personnel & Development and Saracens RFC.

Nicholas T. Florio CPANick is a Partner with the accounting fi rm of Citrin Cooperman, in New York City, and provides extensive support to the Monroe Staffi ng business. He has over twenty years of support to service businesses and is a regular speaker on the fi nancial aspects of managing staffi ng companies. He has been a non-executive Director of Initio for two years and provided support to the former leadership team for over ten years.

The Futures Bright.

Without question there is a huge opportunity at Initio, of which Brendan remains convinced despite the uncertainty over the Euro zone. He believes there is plenty more business to win in the specialist markets that Initio operates in and he is totally confi dent that by remaining focused and sticking to the company’s fundamental principles, there is a very exciting future ahead.

If you would like to know more about Initio and its operating companies visitwww.initiointernational.com or call Brendan on +44 7730 667007 or email at brendan@initiointernational.com

Initio International - No Compromise On Core Values and Integrity

“We envisage that the offi ce network

will grow from 13 in 2012 and we will look at

infi ll acquisitions to supplement our growing professional business”.