Team24 thinks technology could overturn sales threat
Team24 thinks technology could overturn sales threat
Fast-growing healthcare recruitment agency responds to legislation change with a new brand now it needs to decide how to fund and sell a new business.
Robert Stiff, managing director of Team24: "Deregulation allows cowboys to come into the market."
"We used to be called salesmen. Now we're all consultants," says Team24's sales director, Michael Pickard, pointing to the Glengarry Glen Ross DVD sitting on his desk.
The Surrey-based health care recruitment business doesn't suffer from the dishonesty, in-fighting or latent desperation of the ruthless Kevin Spacey-led sales team in the film of David Mamet's play, but Pickard is evidently pleased to be leading a team that's allowed to take a traditional approach to selling.
Team24's founder and chairman, Robert Stiff, looked at the role of the recruitment consultants in other businesses when he established the company five years ago. "The traditional recruiter looks after the attraction of candidates, developing new business, clearing applicants and processing time sheets," he says. "Our salespeople concentrate on sales, not admin"
Team24, which was ranked as the 16th fastest growing private company in the UK last year, places locum doctors and nurses in GPs' surgeries, NHS trusts, private hospitals and even with individual wealthy clients. Stiff credits the recruitment and retention of the right staff as one of the most influential factors in the company's growth revenues have gone from 1m in 2006 to 30.2m in its last set of accounts and he still personally trains and inducts all new sales recruits. While he has adopted some fashionable management strategies, such as allowing sales staff to set their own targets, he says the key to their motivation is more conventional and obvious: a generous basic salary and uncapped commission. "I'd seen this feeling of resentment in a lot of sales organisations, where the company was doing well but the people weren't earning the money. I wanted to make sure that everyone I employed was rewarded correctly for the job that they were doing."
Stiff, who served in the British Army for seven years, was determined to ensure that his business was more than a well drilled sales outfit, however. He recognised that it would need repeatable processes and automation to quickly scale, but he "lacked the knowledge to push that forward" as far as he would have liked. By 2008, investment in the company's website, search engine optimisation and spending 4,000 a month on paid search engine listings was significantly improving the number of candidates coming through, but the processing remained unwieldy.
There's a significant compliance burden on any company in the business of hiring doctors and nurses. It typically takes around eight weeks to clear a candidate.
Some 34 pieces of documentation need to be processed, and each applicant file was being looked at, on average, 60 times over the two-month clearing period. By the end of 2008, the company had around 1.5 million pieces of paper. When a Waitrose supermarket down the road from the company's headquarters in Banstead, Surrey burned to the ground that December, Stiff realised the system was unsafe as well as inefficient. "If we'd lost the building, we'd have lost everything," says the 50-year-old.
He hired Tonya Hills as director of IT and innovation, tasking her with implementing a web-based candidate management system. Now, the business is cloud-based and 'paperless' (any physical documents are scanned and then shredded) meaning candidate details can be accessed instantly and remotely. It is also heavily automated, with applicants updated with automatic emails and texts at every stage of the clearance and recruitment process. The technology filters out some 75pc of the 1,000 nursing applicants the website attracts each month before any of Team24's staff get involved. Stiff says the system, which cost "hundreds of thousands of pounds", has "revolutionised the business". An imminent threat to Team24's revenues has led Stiff to think that the new-found technology-led approach could also inspire a lucrative diversification.
Almost three quarters of the company's sales come from its nursing division, even though this service is currently exclusive to London, while it places doctors and GPs across the UK. The business is licensed to act as a nursing agency by the Care Quality Commission (CQC), a body established in 2009 which regulates health and social care services. The CQC inspects and regulates all agencies that hire nurses, which means an extensive compliance overhead is common across the sector. From October, however, deregulation will see the burden fall on the NHS instead. The prospect of less red tape is normally welcomed by business owners, but Stiff doesn't regard it as entirely good news, especially when it comes to doing business with the NHS trusts. "If you're regulated and I'm not, it makes you nervous about doing business with me. It also allows cowboys to come into the market."
Team24 won't alter its approach to compliance, but Stiff says there is a "slight threat" that less scrupulous agencies may try to undercut it by cutting corners. "Sometimes it is all about cost. If they can get someone cheaper, maybe they'll do it. It could also lead to some consolidation, it depends on how effective the NHS is at auditing agencies."
The change in regulation does present an opportunity, however: Stiff believes the company can outsource its existing compliance checking technology and expertise to the NHS, and eventually, any other organisation that needs to conduct complex pre- and post-employment checks on its staff social workers and teachers, for example. "Now the NHS has to follow the same compliance basis as us, they'll have to uplift their staffing level. It would be easier for them to outsource it to us because we've been doing it for a while. But how do we implement that change and diversify the business to go into that?"
Team24 is wholly owned by Stiff, has grown organically and is debt free, but he thinks the new service will need to be delivered through a distinct company and brand. "Our accountants think the best way forward is to separate it. That way we can bring outside investment in."
Stiff accepts bringing VCs in might represent a culture shock for a self-financing business, but it could be a necessity if the new operation is to take advantage of the post-October regulatory environment, which would be the perfect climate to market the service in. "How do we get the product into the market quickly? You can't sit on the phone and grow that. You need something extra. We could talk to some investment houses that already have a similar market. It's buying the expertise and the contacts."
He wants the new service to be ready by the end of the year, and the new company has already been registered and a domain name secured. Before it does launch though, Stiff and his team have to answer the most fundamental question of all: how to sell it. Considering its existing expertise, should it stick to what it knows and market it as a service, or should it simply sell the technology itself? Stiff is still weighing it up, but seems to leaning towards the technology-led approach: "The difference between selling a product and selling a person is that the product carries a higher margin. If you sell the software, your profits are higher."