Neuven gives small businesses a big place

In the world of neutral vending, the big players seem to always be in the mix, as DeeDee Doke discovered

The name 'Neuven' looks vaguely foreign. At first, the appropriate pronunciation is uncertain — should it be 'noy-ven' or 'noo-ven' or 'nee-yoo ven'? It's only when Neuven is put into its correct context that it all becomes clear.

Neuven is a contraction of 'neutral vendor', the term describing a form of recruitment process outsourcing in which a supposedly unbiased agent contracts with recruitment agencies to fulfil a client's need for staff.

Neuven Solutions is the name of a newly launched company whose proprietors believe the word 'neutral' has lost its meaning in the conflicted world inhabited by managed services and recruitment. As the consortium behind Neuven sees it, that's because the actual practice of neutral vendorship rarely fulfils the promise of neutrality. But Neuven's leaders and shareholders promise that situation is about to change.

"What Neuven is about, and the idea behind Neuven, is that it's neutral — it is a truly neutral vendor business," says Gary Irvine, Neuven's chairman and one of the consortium's shareholders. "It's not a recruitment business, it's not a recruitment agency, it does not have a database. It is truly a neutral vendor specialising in recruitment vending."

The creation of Neuven has been two years in the making, borne out of its creators' concern that small- and medium-sized businesses were losing out to much larger companies in the growing managed services marketplace, and could not successfully compete for national contracts.

Neuven's founders also believed that as a result, the clients being served by neutral vendors were not receiving the desired level of service — the kind that can be provided by small companies with a more personalised approach to doing business.

"We've all come from recruitment backgrounds and we've seen a change within the industry — master vendors, neutral vendors, preferred supplier lists," says Neuven managing director Adrian Klean. "We've been seeing larger players come in and a general swamping of the business, with margins being eroded and the level of service dropping down. We thought we could, as a group of people, do it differently, a little bit better."

As a group, Klean says, the consortium members have "shared values, shared thoughts, shared experiences. We reached an understanding of something we could create, and potentially where we wanted to be as well".

What Neuven proposes to do is compete for large contracts across the UK and then, when the deal is won, contract with SME recruitment businesses in the right locations with the right specialities to supply the people.

"We're talking contracts that are many, many millions in size in terms of turnover. We will manage both temporary and permanent, but we will be looking at high volume, high turnover stuff that a small community business could never hope to win. In their own right, they never could have hoped to have won; they didn't have the credibility or the scope," Irvine says.

Speaking exclusively to Recruiter, Irvine offers a little history. When the concept of 'master vendor' emerged in the recruitment marketplace some years ago, the idea of having one company manage all of an employer's recruitment agency contracts for a set rate offered great appeal to employers who wanted to save time and money.

SMEs that had been supplying workers to employers were often promised that they would continue to get work under the new arrangement. But Irvine says he has heard all too often from SMEs that the promised work failed to materialise.

"The theory behind it was good," Irvine acknowledges, "but the reality was that it didn't work so well because the agenda predominantly was for the master vendor, the owner of the contract to win the contract and fill the majority of the vacancies directly themselves. It was really only when they struggled that they then would go to the second-tier suppliers.

"And of course behind the scenes, the master vendor would have negotiated new rates with the second-tier suppliers and the margins were getting tighter and tighter because to win the contract from their competitors, they would have reduced the margins substantially."

Employers found that they did indeed save money but that the supply of workers was not always to the desired standard. "The second-tier suppliers started to lose interest because they felt they were just getting the crumbs from the table, as it were, and the volume simply wasn't there for them to make it worth their while," Irvine continues.

Second-tier suppliers' hopes for a greater piece of the pie rose when agents declaring themselves neutral vendors emerged. Under such arrangements, the managed service provider could not simply dole out the work to their own recruitment businesses but were required to work with the best possible suppliers. However, Irvine and his Neuven partners contend that this ideal has rarely been the reality.

"My argument would be that those out there who claim to be neutral vendors at the moment are not neutral vendors; I still think they are operating, to a large extent, like master vendors. Their business model is right — we love the business model — if only it was truly neutral," Irvine says.

A cynic might point out that the 'day jobs' of Irvine and his consortium colleagues are in running recruitment businesses themselves — a point of which, to their credit, they make no secret. The genial Irvine, for example, is managing partner of the Diamond Recruitment Group in Belfast and is also the former chairman of the Recruitment and Employment Confederation board, who left last year. The other board members and directors are key figures in Angela Mortimer, ASA International, City Centre Recruitment, Lifeline Personnel and RE Personnel (see box overleaf).

In fact, a key selling point for Neuven's services will be the fact that all the players are recruitment-savvy. "Together, we have a £100m-plus turnover, just in terms of the shareholders themselves. Together we can bring

200-plus years of experience. We have a proven track record," Irvine says. "And we have experience of managing many contracts as well. The experience we have within our consortium can't be found anywhere else. Because we've got health care, industrial, education, professional, technical and so on."

The collective also represents a breadth of geographic knowledge and understanding, from Northern Ireland to the South East and back north to Scotland.

When potential clients want to know who they're dealing with, Irvine says, "we will be able to say 'look, let's tell you exactly who we are. Here is our amalgamated set of accounts, these are the organisations that we represent, here are the CVs belonging to our shareholders, here is the level of experience and expertise that we can bring to these contracts, and here is the structure of Neuven in its own right'."

Klean and director of client services Sue Pickard will run Neuven on a day-to-day basis. Completing the board alongside Klean, Pickard and Irvine are financial director Paul Donaldson and commercial director Dan Shrimpton. The board will meet monthly in London.

To provide the necessary technology platform for Neuven's offering, recruitment vendor management technology supplier expressHR has signed on as a strategic partner. Pickard says: "Its bespoke system will be exactly what's needed. And even we can't say what's needed at each moment in time until we have a clear understanding of what our client wants."

"It's an exciting opportunity," expressHR chief executive Nick Ray told Recruiter. "We think what they're doing is very interesting. It breaks the mould and we're keen to support them in doing that."

Even if, as Irvine says, clients have begun to come to the realisation that margins are as low as they can go, cost savings will still be of critical key interest. Part of Neuven's strategy to keep the costs low without cutting back on service will be to emphasise the need for clients to pay their bills within 30 days to avoid the financial servicing required on the account.

At the heart of the Neuven philosophy is the belief is that SMEs who want to be part of a long-term solution will provide a high level of service and high quality, responsible workers — both factors which will also save gratuitous spend.

At this stage, talks are already underway between Neuven and large potential client organisations around the UK, in both the public and private sectors about possible business. Now the push will be on to bring on board "the best" SME recruitment firms who want to become suppliers to upcoming contracts that Neuven wants to win from what Irvine calls "the big boys".

"I have to say we want to put a focus on the SME players — they represent 99.5% of the industry. Those are the players that we feel have got the raw end of the deal to a large extent over the last number of years," Irvine says.

"Do you want to come on board and help us do that?" he asks rhetorically of SME recruiters. "Then get on board, get on to the website and get listed.

"We genuinely hope that when people understand what we're trying to do, they will say, 'About time!'"

Neuven: structure


• Angela Mortimer
• ASA International
• City Centre Recruitment
• Diamond Recruitment Group
• Lifeline Personnel
• RE Personnel


Chairman: Gary Irvine
Commercial director: Dan Shrimpton
Financial director: Paul Donaldson
Managing director: Adrian Klean
Directors: Richard East, Kim-Marie Freeston, Ashley Williams

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