FEATURE: EXECUTIVE SEARCH & RECRUITMENT


Success is in succession


By ANDREW GUY, director of PGC E


xecutive Search or “head hunting” is often the most effective recruitment methodology for making important appointments. Senior,


strategic, sensitive or specialist vacancies are rarely filled from databases. The discretion and insights necessary to advise a board choosing from a shortlist of hand-picked candidates takes experience and judgement. The stakes are, by definition, high. A new managing director, non-executive, CFO,


operations director, CTO or business development director could – and arguably should – have a profound effect on a business. Headhunting is not the murky cloak-and-dagger


world of screen fiction. It is an accepted norm of business that - done well - preserves the confidentiality of everyone involved, as all should reasonably expect. It is equally effective for young and growing businesses as it is for FTSE PLCs, but is perhaps especially valuable to mid-market businesses that need to hire senior people, but may do so relatively infrequently. It is in this mid-market that some recurring themes


have become evident. From 2008 owner-managed and family businesses have seen some “hanging on in there”. With the very best of intentions, a founder or owner may have abandoned exit or retirement plans when the financial crisis hit, to steady the ship and steer a safe course through the storm. Their pension pot as well as the order book probably suffered, market valuations dipped, costs and headcounts were cut. Under such circumstances some decided not to replace members of the senior team as they left or were let go. Now, some years on, valuations are on the up, deal flows are better, order books are recovering. However, potential lenders, investors and purchasers are understandably nervous about businesses which are heavily reliant on a dominant personality. There is now increasing evidence that with stricter lending criteria, the banks are actively pushing such customers to reinforce their management teams. With a strong successor in place and a capable board, the chances of a fruitful future for the business will be significantly advanced. The backdrop to this is a rising desire on the part of


private equity and corporates (both of which have considerable funds to invest) to find and back investible opportunities. With confidence undermined in January by China, oil prices, Brexit; the appetite remains but decisions have been deferred. Several commentators are predicting that there will be a period of “catch up” later in 2016, with investment-ready businesses set to benefit from returning confidence. Businesses without a credible top team in place will miss out. A feature of the Midlands in 2016 will be stiffer


competition for good people. The Greater Birmingham Chambers of Commerce reported in its latest Quarterly


42 CHAMBERLINK MARCH 2016


Economic Survey that 89% of manufacturing business are experiencing difficulties in recruiting into management and professional positions. This is the highest reported figure in the history of the QES and it’s showing no signs of dropping anytime soon. For years, boards have been focused on survival and


cost-down. When paying down debt and share buybacks are less of an imperative and expansion into new markets with innovative products and services once again takes priority, then business will need directors and managers who can lead growth. There is not much recent experience of that around, so the struggle to secure it will become intense. The laws of supply and demand cannot be ignored, but as the


‘A feature of the Midlands in 2016 will be stiffer competition for good people’


Andrew Guy, director of PGC


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