HB RIDA, a joint initiative between Hamilton Bradshaw Private Equity and the Recruitment Industry Development Agency (RIDA), has been set up to help ownermanaged recruitment firms grow in today’s marketplace.

HB RIDA’s founders spoke exclusively to Recruiter before the 6 April launch. Chris Ledbury, managing director of Hamilton Bradshaw (HB) Ventures, said the joint venture arose due to the high numbers of enquiries for business support which HB was receiving: “The numbers of enquiries were getting too vast to manage. Among them were serious owner-managers who needed guidance, structure and mentoring.

“With my role in HB Ventures, I am Mr Start-up, but few people out there really understand what a recruitment start-up is.” HB needed the recruitment expertise to take these SMEs on from their beginnings and help develop them.

Ledbury and HB founder James Caan approached recruitment business consultancy RIDA, led by seasoned recruiters chairman Paul Macildowie, chief executive Helen Reynolds and partner Alex Strang.

RIDA has provided business support and advice to around 90 recruitment firms since its inception in July last year, and currently has 15 clients on its books.

Caan explained: “Once a start-up is operational, Helen’s expertise with RIDA is phase two, if you like. These are companies which want to be more than boutique or lifestyle recruiters. RIDA helps to ‘corporatise’ that vision, be it for career structure or succession planning. We can turn that company into a national organisation. With 95% of recruitment firms having a turnover of less than £5m, a big chunk of the market is not going anywhere.

“All those things which weren’t that important when the owner-manager was sitting at their desk working for a big corporation are now fundamental when it’s their own company.”

So what is the procedure for interested SMEs and what does HB RIDA offer them?

Firstly, there will be an investigative meeting with the client to understand the company’s issues and vision, and a healthcheck of the business will be carried out, relying on the expertise of RIDA’s associates.

“We don’t have any ‘wet behind the ears’ consultants. All our 14 associates at RIDA are experienced recruiters with at least 20 years’ experience each. For example, Terry Benson was former chief executive of Michael Page, Rob Barklamb was vice-president of operations at MRI Network Worldwide, Alex Strang was director of Michael Page, responsible for their online strategy, and Paul Macildowie was founder of Macildowie Associates, to highlight a few,” explained Reynolds.

The three main service programmes are support, growth and value creation. Support is for the owner to not only direct the business, but for themselves to develop as a business owner. Growth is for those who wish to maximise their business, creating higher-billing consultants and gain marketshare, for example.

Value creation is for those who have identified that they wish to exit their business at some point, but do not know how or when to. This programme to developed to ensure it maximises shareholder value for the best identifiable exit.

The venture is backed by a £2m development capital fund, specifically for SMEs. So will HB RIDA, with its financial backing, feed on recruiters’ fears and uncertainty during these recessionary times?

“We’re certainly not cashing in on fear,” Reynolds asserted. “We believe it’s an exciting time and not all doom and gloom. After all, many successful businesses have been started in a downturn. We can provide the help and infrastructure to make them successful.

“Most are ‘recession virgins’. Around 70% of startup SMEs fail within the first two years without help. HB RIDA can help start-ups with value-creation, possibly leading to an exit strategy. It’s a one-stop shop for business development.”

Ledbury added: “HB RIDA is not there to take over their business. We’re there to give them help and guidance. The James Caan/Hamilton Bradshaw brand is a reassuring name. And lots of the ownermanagers have never been in business through a recession before.

“If people have got the passion, we can help them all day. Fundamentally it has to be built around the person that sets it up.”

Caan interjected: “However, in the long term the brand needs to be more than just the personality of the recruiter; to grow, it needs to be more than just a lifestyle company.”

Ledbury explained that most owner-manager companies plateau and don’t go any further because they haven’t thought about an exit strategy. “Quite often, high-billing recruiters decide to go on their own — in the beginning — for income creation. The real value comes once the profit and
EBIT figure are up and they realise the true value once they sell the business.”

He summed up the HB RIDA ethos: “We go on a journey with the companies. Recruitment is a people business. We’re people. And we’re available.”

www.hbrida.com