The strategy Hays has adopted is based on seven operational objectives: to focus on the development of specialist professional recruitment services; to achieve accelerated international expansion primarily through organic growth, as well as carefully selected acquisitions; to maintain balanced growth in our share of the specialist permanent and temporary job markets; to increase our share of the public sector recruitment market; to enhance our range of HR services; to maintain high margins based on a tight yet flexible cost base and increased operational efficiencies; and to further develop the high brand recognition of Hays internationally.
Hays plc provides specialist recruitment and human resource (HR) Services, offering temporary and permanent staffing to customers across the globe. The company has 220 offices in the United Kingdom, as well as locations in Holland, Belgium, France, Germany, Switzerland, Austria, Czech Republic, Poland, Spain, Portugal, and South Africa. Hays operates as the largest specialist recruitment firm in Australia and New Zealand and is focused on penetrating the Canadian market as well. The company serves clients across a wide range of industries; some of its customers include Vodaphone, PricewaterhouseCoopers, KPMG, Deutsche Bank, and Bank of New York. During the 1990s chairman Ronnie Frost took Hays on an acquisition campaign both to strengthen its core areas in its United Kingdom base and to insert the company into the European market. After his retirement in 2001, the company underwent a strategic review and opted to sell off assets unrelated to its core personnel operations.
Although Frost would become the chief architect of Hays plc's growth, the company had been in the distribution business for nearly 125 years before coming under Frost's sway. The Hays business had begun in 1867, operating wharf facilities on the Thames in London, where it received dairy products shipped from New Zealand and other British colonies. Hays would gradually grow into a prominent cold storage provider, especially for dairy products. The company also would extend its services to distribution, while extending its London properties to include many prime Thames-side locations, including the eponymous Hays Wharf. By the late 1970s, Hays would come under control of the Kuwaiti Investment Office, acting as a holding company. In the late 1980s, however, Hays would be taken over by Ronnie Frost, who then took Hays public in 1989.
Ronnie Frost had had his own history with the Kuwaiti Investment Office. Frost started his own company, called Farmhouse Securities, in 1965. The company's original area of business was as a poultry wholesaler. Speaking of the period with the Financial Times, Frost would say: "Wonderful training. You'd approach someone, and in those days it could have been John Sainsbury himself or just a market trader. You'd have to adjust immediately." Frost's ability to "adjust" would become one of the principal assets of Farmhouse Securities, as was his dedication: it was not uncommon for Frost to put in 18-hour workdays. In the late 1960s and early 1970s the ambitious Frost extended the company into the distribution sphere, with an emphasis on cold storage facilities for its poultry and other products.
In the 1970s Frost would take Farmhouse Securities on a massive expansion program, opening or acquiring cold storage and other facilities throughout the United Kingdom. By the late 1970s Farmhouse Securities had built up a network of facilities capable of providing products to more than two-thirds of the United Kingdom. The company also built a fleet of trucks--one of the country's largest--to serve its storage facilities and its customers.
Farmhouse Securities' expansion would leave the company vulnerable to changes in the economic climate. After nearly three decades of strong growth since World War II, the British economy, along with much of the West, collapsed in the 1970s. Spurred by the Arab Oil Embargo and the oil-producing countries' sudden decision to raise world oil prices, the recession would strike particularly hard in the United Kingdom. Farmhouse Securities' finances, given its huge fleet of trucks, came under attack both from the rising oil prices and the drop in distribution activity. Despite its efforts to surmount its fragility in the new economic climate, Farmhouse Securities quickly found itself struggling to survive.
By the end of the 1970s Farmhouse Securities was on the verge of declaring bankruptcy. Frost, however, was not about giving up, telling the Financial Times: "There was too much blood and time invested in this business to let it go, but it was scary. We'd got to the stage of banks stopping cheques." Frost hung on into the new decade. But by 1981 it was too late. In that year Frost sold Farmhouse Securities to the Kuwaiti Investment Office. Frost would remain in charge of the company he had founded, however.
Giving up control of Farmhouse Securities had enabled the company to survive its financial problems as the British economy began to recover in the 1980s. Frost had had no intention of relinquishing permanent control of Farmhouse Securities: even as he sold the company, Frost made plans to buy back not only Farmhouse Securities, but the Hays wharf and distribution business as well.
Regaining control of the company proved more difficult than expected. It was not until 1987--the day after the October stock market crash--that the Kuwaiti Investment Office finally agreed to sell Frost back his business. For pounds 257 million, Frost regained control not only of the Farmhouse Securities businesses, but the Hays Distribution companies as well, which provided the name for the new company, Hays Plc. Joining the company's ranks was also a personnel and recruitment arm, which had been founded in 1969 and added to the Hays group in 1986. Another Hays business was its Document Exchange Service, later known as Hays DX, which had started up in 1975, offering business-to-business, overnight, and other specialty mail and delivery services. Hays DX would later build a strong focus on such sectors as the banking and accounting industries.
Frost set about imposing Hays as one of the United Kingdom's premier logistics and business services groups. To fund the company's proposed expansion, Frost led Hays to a public listing in 1989. The public offering would get off to a rocky start, however. Coming on the same day as the resignation of Britain's chancellor of the exchequer, Nigel Lawson, the Hays stock float would be forced to cut its initial price by some 15 percent. This proved to be only a temporary setback. In the 1990s Hays would become the darling of the London Stock Exchange, posting some of the decade's strongest performances.
Hays' growth would come primarily from the company's own internal expansion, as the company captured a stronger share of its market and expanded into new markets. Unwilling to compete with larger firms, the company shrewdly sought out niche opportunities in which to focus its energy, capturing leading shares of such segments as the chemicals transportation and logistics segment. The company also avoided direct exposure in the retail distribution market, which was undergoing a cutthroat shakeout in the 1990s, leading to more and more meager margins as the United Kingdom slipped into the extended recession of the first part of the decade. While parts of Hays' business inevitably suffered from the recession and the resulting drop in demand for its distribution services, the company's three-prong approach enabled it to achieve some stability. The difficult economic climate, for example, would prove a boon to Hays' personnel services division, as companies looked more and more for temporary personnel, rather than hiring permanent employees. At the same time, Hays began to look for new markets, extending the company's delivery services into more general postal services, such as sorting and other services for the British post office. Another niche of interest to the company was computer-based records management and data storage, a segment the company would come to dominate after the acquisition of Rockall Scotia Resources in 1994.
Increasing competition in other sectors would bring opportunity to Hays. When British supermarkets began installing gasoline pumps, the country's traditional service stations, including Shell and British Petroleum, found their business under extreme pressure. In response, these companies began developing onsite grocery and convenience services. Hays seized the opportunity to propose its logistics services--coordinating an extremely complex provisions operation combining goods from various segments, from foods to clothing to other products, into one service. The initiative paid off: Hays was awarded contracts from Shell, followed by British Petroleum, in 1996.
Hays had already become adept at such complex logistics operations through its association with Carrefour, the French hypermarket giant. Where the company had remained focused on the United Kingdom markets, in the 1990s the company recognized the need to expand its services onto the European continent. France would provide the company's initial entry, as Hays began making small acquisitions of companies in its three primary sectors. Germany and the Benelux countries would soon follow.
Hays continued to target internal growth, while preparing an extensive series of so-called "bolt-on" acquisitions to boost its presence in specific markets, and especially in building its continental presence. Most of these acquisitions were on a relatively modest scale. In January 1999, for example, the company announced the purchase of France Partner, one of that country's top express parcel delivery services, for £19.5 million. This acquisition, however, followed on that of Colirail, in December 1998 for £40 million, and Delta Medical Express Group, acquired for £2.2 million in 1998, boosting the company to a 20 percent market share in the next-day parcel sector in France.
These acquisitions also complemented the strong moves that the company had made in building out its logistics network, with acquisitions including FDS in 1997 and Fril in 1994, strengthening the company's presence in France and the Benelux countries, as well as the takeover of Mordhorst, in 1993, which provided Hays with its German market foothold. The acquisition of Sodibelco in April 1998 brought the company's logistics operations into Italy. In the late 1990s Hays also began spreading its personnel and recruitment wings, with acquisitions including France's Sitinfo in October 1998, itself following on the June 1998 purchases of Alpha TT, Quasar, and Arec, three French specialist recruitment agencies.
By 1999 Hays had established a firm position in each of its specialty areas across much of Western Europe, with near-future plans to expand into Spain, as well as to build a presence in the Eastern European market as well. While Ronnie Frost remained the guiding force of the company's growth, Hays would receive credit for building a strong management team, including retaining most of the executive staff of its acquisitions. This team was expected to continue to build on Hays' status as a world-leading business services group.
Changes in the New Millennium
By the start of the new millennium, Hays stood as a conglomerate of sorts, with a large group of holdings--thanks to Frost's acquisition spree during the 1990s. Global economies were fickle during this time period however, and Hays found itself in a precarious situation as profits began to falter.
Frost retired in 2001, leaving Bob Lawson at the helm as chairman. Colin Matthews was brought in as CEO in 2002. Under his direction, the company launched a strategic review of its operations which took place from November 2002 to February 2003. Upon completion of the review, Hays announced a major restructuring that would leave the company focusing solely on its personnel business. Matthews gave insight into the rationale behind the strategy telling the Financial Times, "The linkages and synergies of the four divisions are not strong enough and not valuable enough to justify keeping a multi-business group together." Furthermore, the company's 2003 annual report explained its decision to keep its personnel business, which was responsible for nearly 60 percent of total profits. According to the report, the personnel division was "well-placed to take advantage of major, very attractive opportunities which deserve the focused and undivided attention of the entire Company."
As such, Hays set plans in motion to jettison its entire Commercial division for £225.5 million. Four transactions were part of that disposal including the sale of its Information Management Services unit to Mountain Europe Ltd. in a £200 deal. The three other sales divvied up Hays' Business Outsourcing operations. In addition, its Logistics Division was sold to Platinum Equity Holdings LLC for $175 million. The final step in the company's transformation came in November 2004, when the company spun off its mail business, DX Services plc.
Matthews, uninterested in heading up a personnel business, left the company to pursue other options. Denis Waxman was named his replacement in July 2004. In the short-term, Hays' restructuring appeared to have paid off. The company reported record profits in fiscal 2005 with net income climbing to $244.3 million, an increase of 103.9 percent over the previous year. During 2005, the company experienced a 19 percent increase in recruitment consultants and opened 27 new offices. Overall, the company had 326 offices in 16 countries.
As Hays prepared to finish out the first decade of the new millennium, the company stood as a provider of specialist recruitment and HR services for permanent and temporary staff. Its clients could be found across many industries including financial services, sales and marketing, and education. While the long-term success of Hays' restructuring remained to be seen, company management was optimistic the company was on the right path for growth in the years to come.
Hays Holdings Ltd.; Hays Overseas Holdings Ltd.; Hays Commercial Services Ltd.; Hays Personnel Services (Holdings) Ltd.; Hays Holdings BV (Netherlands); Hays Specialist Recruitment Ltd.; Hays Personnel Services (Australia) Pty Ltd. (Australia); Hays Travail Temporaire SASU (France); Hays IT SASU (France); Hays Personnel Services (Canada) Inc. (Canada); Hays Personnel Services BV (Netherlands); Hays AG (Germany); Hays (Schweiz) AG (Switzerland); Hays Osterreich GmbH (Austria); Hays Czech s.r.o (Czech Republic); Hays Personnel Services (Poland) Sp.zo.o (Poland); Hays Personnel Services Espana SA (Spain); Hays Personnel Espana Temporal SA (Spain); Hays Overseas (Portugal) SGPS LDA (Portugal); Hays Specialist Recruitment (Ireland) Ltd.; Hays NV (Belgium); Hays Personnel Services (Sweden) AB (Sweden).
Adecco S.A.; Manpower Inc.; Vedior N.V.