As a boy, Grahame Caswell’s weekly pocket money of two shillings covered the price of entry to see his beloved Chelsea Football Club, plus a match day programme and a bag of chips on the way home. But when the price of entry doubled and his father refused to up his allowance, the eight-year-old had to find another way of padding his income.
He began washing cars in the neighbourhood and was so successful that his friends joined in, but they weren’t keen to knock on doors drumming up fresh business. Caswell agreed that they would do the cleaning while he found new customers, and within a year he had as many as ten pals washing up to 40 cars per day. After paying them for their labour, he was left with about £5 per week – more than his father was earning.
“I was very delighted that I knew I could go to the football matches whenever I wanted,” says Caswell, whose recruitment group Search Consultancy recently posted the strongest results in its 29-year history. “Don’t get me wrong, £5 is not a fortune, and it was not a fortune then, but for a little boy it was a lot of money.”
With its head office in Glasgow, Search Consultancy has grown to employ 700 people in 13 locations across the UK since the management buy-out led by Caswell in 2000. Like the car cleaning enterprise of his youth and everything else in between, Caswell has expanded his current business through organic growth.
“When you make an acquisition, there is always the danger of bringing two different cultures together, and sometimes that works and sometimes it doesn’t,” he says. “When you grow organically, you go forward with the same culture.”
It’s a formula that has worked for Search Consultancy, which earlier this month posted an 11 per cent increase in turnover for the year to 3 January. In addition to racking up revenues of more than £173 million, the group’s net fee income rose by nearly 9 per cent to £41.8m, plus a fifth consecutive year of underlying earnings growth, up more than 18 per cent at £7.7m.
This was achieved in what has been a booming yet fiercely competitive recruitment market, with skills shortages across an array of sectors leading in some cases to spiralling counter-offer situations as organisations cling to their most talented staff. There are no signs that those shortages will soon abate, but amid current political and economic uncertainty, maintaining momentum will be difficult. “I think everyone in recruitment is looking at a flat year, to be honest,” Caswell says. “A flat year will be a good year in the current market.”
Which is not to say that Caswell is downbeat on Search Consultancy’s prospects. Rather, the recruitment veteran of 38 years is simply pragmatic.
He attended the City of London School on scholarship, where he finished his O-Levels at the age of 14, but was not allowed to join sixth form because he was too young. He left school and worked his way through a “host of jobs” before getting his accountancy qualification and then joining a small media company, followed by a stint with world-wide tyre manufacturer Firestone.
At the age of 21 he decided that he didn’t want to be an accountant, and took a job with a local recruitment agency in London. There he found his calling, and on his 25th birthday in 1981 he struck out on his own to set up Xpert Recruitment.
The business grew from “one man and his dog” to 14 offices across the south of England. By the time it was sold to temporary staffing giant Kelly Services in 1991, it was generating profits in the region of £1.5m on turnover of £11m.
Caswell stayed on and was made managing director of the UK arm of Kelly, a £33m operation which under his leadership reached revenues of more than £200m in 1997, when he took on broader responsibility for Kelly across Northern Europe. He had scaled the ranks to senior vice-president when the urge for a change of scenery hit.
“I got the bug to do it for myself again,” he says. “So I spent some time with some venture capitalists, and I picked 3i to work with, and they backed me to buy out Search Consultancy, which we did in 2000.”
Set up in 1987 by accountant Andrew Pert and engineer Colin Blair, Search Consultancy had what Caswell describes as a business model for “the future of recruitment”. With one large office in Glasgow and a second hub in Edinburgh, each serving several different sectors, the company was not encumbered by the overheads of running lots of smaller offices across a variety of locations.
Caswell took this prototype and began replicating it in other cities across the UK, starting with a “supersite” in Manchester, which is now the company’s busiest office. It is headed up by his wife Debbie, who joined the company in August 2000 and is now managing director of Search Consultancy in England.
Other sites followed, all offering services across a diverse range of sectors spanning the likes of accountancy and aviation to hospitality, IT and nursing. Openings in Scotland included offices in Aberdeen, Dundee, Dunfermline and Inverness.
England now accounts for 68 per cent of turnover even though Search has yet to break into London, where Caswell would like to open an office in 2017. The area within the M25 accounts for half of the overall market for recruitment in the UK, but the closest Search gets to it is its office in Crawley.
Another “huge growth opportunity” is the company’s outsourcing business, established in 2011. It provides staff to carry out activities such as installing and taking readings from smart meters, with revenues based on the number of units serviced.
Outsourcing represents just 6 per cent of group turnover, while permanent job placements account for 36 per cent of revenues. The remaining lion’s share comes from filling temporary positions.
The recruiter’s contractor base peaked at 7,400 workers last year, a rise of 9.6 per cent, and it made a total of 8,520 permanent placements, up 3.7 per cent.
Looking at specific sectors, Caswell says construction, medical and health placements have all been positive, as has professional services, particularly in England. Technical appointments were slow in the first half but are expected to pick up, and IT has been flat, though the latter is primarily down to the “sheer shortage of candidates”.
The impact of Brexit on the overall market going forward remains unclear. Not surprisingly, Search Consultancy saw a slowdown in permanent placements in the run-up to the referendum as businesses pulled back on making unnecessary commitments until the situation cleared. But after the shock decision to exit, something surprising happened.
“Amazingly, we had our best week for permanent placements for 12 months in the week after the Brexit vote,” Caswell says. “I suppose it’s a case of at least we now know where we are probably headed.”
Search is also predicting a boom in heavy-hitting “chief Brexit officer” roles, as big business prepares to manage the switch. Accountancy firm KPMG has already assigned one of its senior partners to such a position, and many others are expected to follow.
Whatever may emerge from this mixed picture, Caswell believes the culture within Search Consultancy will continue to be the key to the company’s success.
“There isn’t a lot to differentiate one recruitment company from the next,” he explains. “You can come up with an innovative new method for doing something, but it will quickly be copied.
“One thing that is unique is the people you have, and the way you treat them. If you have happy staff, you will be successful going forward.”