Received wisdom has it that recruitment companies get decimated in recessions. But received wisdom is often wrong, as Kate Bleasdale, the founder of AIM-listed Healthcare Locums, is amply demonstrating.
Received wisdom has it that recruitment companies get decimated in recessions. But received wisdom is often wrong, as Kate Bleasdale, the founder of AIM-listed Healthcare Locums, is amply demonstrating.
If investors like an entrepreneur to know their numbers, they must love Kate Bleasdale. Figures and facts roll from the tongue of Healthcare Locums’ (HCL’s) founder and executive vice-chair at a blistering pace.
This is Bleasdale on the market for healthcare staff across the Atlantic: ‘The US has always been a huge opportunity. Even before Obama put additional money in they needed 1.2 million new nurses to register before 2014. Now that Obama has allocated $634 billion to bring 48 million people into the healthcare system, that requirement has gone up another 400,000. We’re looking at 1.6 million new nurses between now and 2014. You can’t quantify that market. Conservatively, it’s worth $30 billion.’
The UK-based HCL is flying. At an AGM earlier this year, Bleasdale quoted numbers that must have been a welcome shot in the arm for the shareholders of this AIM-listed success story. Revenue was up 23 per cent to £166 million and operating profits rocketed 44 per cent to £21.2 million. The company was only established in April 2003.
‘I’ve been in this market for 23 years and of the top five companies providing healthcare staff, two of them I set up. We’re number one and the number two company I also established; the other three have been my competitors for the past two decades,’ says Bleasdale, who was dubbed Entrepreneur of the Year at the Quoted Company Awards in January.
To say she is on a mission is an understatement. Her zeal may partially be explained by her experiences at her previous company, Match Group, which she founded in 1986 after quitting her job as senior nurse manager. Setting the company up with £2,500 from her mother, the same amount from her business partner’s father, and £2,000 from a bank, Match Group went on to become the largest healthcare staffing agency in the UK with sales of £120 million in 2000.
Record payout
By that stage, however, there was discord in the boardroom as doubts reportedly arose about her ability to take the company forward. She departed on decidedly unamicable terms and in 2002 received the largest out of court settlement for sex discrimination and unfair dismissal in the UK (thought to be £2.2 million).
‘I spent two years fighting that legal case,’ she comments. ‘It was the most stressful time of my life; it was dreadful. I was living in Brussels as I had to fight it there. My shareholding was in the company as well and I had to get my shares out. There was no choice.’
Bleasdale denies that she has a point to prove and she won’t be pigeonholed as a crusader against sexism in the City – ‘the male culture is massively different to what it used to be like’.
That said, she readily reveals she has all of the staff she wanted from her previous company now working with her at HCL, and the VCs who acquired Match in 1999 are yet to exit. ‘VCs don’t normally stay around that long unless they have to,’ she notes drily.
‘I had to get my shares out. There was no choice’
As the general recruitment sector takes a pounding, healthcare is only going to expand. ‘Every single market that we are in is growing and we can only see that continuing because of the demographic factors. We have more pensioners now in the UK than under-16 year olds, so there we have an ageing population that requires much more care, and there aren’t enough people coming into the profession. We have known about this for years – I did my masters degree at King’s 19 years ago and it was on the demographic time bomb that is going to hit us by 2012.’
Bolton-born Bleasdale, whose parents were both teachers, brusquely declares that she doesn’t like to think of ‘anything as a challenge’. Nevertheless, with four million healthcare vacancies worldwide, there is enormous pressure in the sector to meet growing demand.
‘One of the reasons we went into international development was because we were so dependent on bringing people into the UK to fill positions,’ she recounts. ‘That has opened up a whole range of opportunities which we were early to pick up on.’
Finding professionals with the adequate skills can’t be seen as anything but a challenge. ‘We cannot ever provide someone who is not of the right quality because if that happens then we won’t get any more business. It means we have to be increasingly innovative about how we look at healthcare recruitment.’
The international arm of HCL did £50,000 worth of placements worldwide in 2005. ‘This year we will do £13 million and in 2010 it’ll be over £20 million. In 2008, international business accounted for approximately ten per cent of our gross margin; this year it will be 20 per cent.’
Talent trafficking
Identifying countries with surplus healthcare workers is a tall order. South Korea, explains Bleasdale, is the only country with excess nurses, while Egypt has too many doctors. In Nepal and Sri Lanka, HCL’s international team have liaised with the governments there to start medical training programmes.
‘They are training more nursing staff than they will ever need [domestically]. We will take the excess and put them into the Middle East for 18 months and, during that period, we can get their green card to enter North America – they have to pass a conversion course – and then we can get them a job.
‘When they’re in the Middle East, they’ve gone from earning $1,500 a year to earning $30,000 a year. If they go to North America with their green cards, they are earning $80,000 to $100,000, depending on their specialism. That creates a situation whereby the money can be used to support people back home.’
Bleasdale has assembled a team she believes is well equipped to handle the company’s fast growth, including the new hires of Mo Dedat from Adecco UK as finance director, and Andy McRae from Hays to take on the role of chief operating officer. Bleasdale herself has moved from MD to her executive vice chair role in order to concentrate on strategy as she seeks to double the size of the business over the next two to three years.
This plan comes after using HCL’s AIM listing to acquire 13 companies in a four-year period. ‘The key thing with any acquisition is that once you have bought a company you integrate it swiftly. With any of the acquisitions we have done, they’ve been working to our back office systems within three months.’
Team effort
Plenty of companies have lost their way in a similar blaze of acquisition activity. Bleasdale appears to have kept control of the pace of growth and the assimilation of the different company cultures and working practices.
‘In any recruitment business there aren’t any tangible assets – it’s all goodwill. So locking in the people, databases and client contacts is key to our success,’ she comments. When it comes to remuneration, staff are offered share options and a couple of years ago ‘staff motivation awards’ were introduced. ‘There are excellent bonus structures and schemes and we give away significant prizes, so our main employee of the year won an Aston Martin,’ she recounts.
Overseeing the company culture is evidently important for Bleasdale. ‘When you’re doing acquisitions, you’re buying companies that used to be competitors, so managing the cultural change and getting everyone to understand that we are all part of the same group and moving forward, can be quite difficult sometimes as you have people who used to fight for clients as competitors. In recruitment, there are huge egos.’
‘Our model is all about having a low cost base’
The last acquisition was in 2007 and the focus now is on organic growth and paying off the debt used to buy those companies. ‘Inevitably, we did have a fair amount of debt but now we have finished our acquisition phase, that is falling rapidly and by the end of this year, we’ll have around £12 million of debt. By the end of 2010, there won’t be any debt.’
HCL’s head office may be in Haymarket in the West End, but the premises are far from flashy. ‘Our model is very much about having a low cost base. We don’t have a lot of high street sites, like Adecco or Manpower,’ states Bleasdale. During the past 12 months, £500,000 has been saved by outsourcing the majority of HCL’s payroll and back office services to India. ‘It’s the low level administrative tasks that can be done elsewhere that we will be looking to outsource,’ she says.
The knowledge gained from quitting her job as a nurse to steer Match Group from start-up to a multi-million pound venture is proving invaluable for Bleasdale. ‘With the best will in the world, looking after patients and holding their hands when they’re dying and then going on to set up a business are two very different things. There is a steep learning curve; the second time around has been an awful lot easier as you know what’s going to happen. So when your turnover reaches £30 million to £40 million, if you’re not on top of your debtor book and collecting cash then that is going to cause huge problems,’ she explains, adding that HCL’s debtor days are around 35 while the ‘industry average is 47 to 48 days.’
No messing about
Bleasdale still retains the air of a nurse who is happy to have a laugh and a joke but is also a no-nonsense disciplinarian (she means it when she says: ‘You live and die by the sword – if you say you are going to do something, you do it’). She chose nursing as a career because she knew she would always have work, a smart decision given the lengthy dole queues of the early 1980s when she graduated.
It was her experience of agency nurses that gave her the idea to start her own business. ‘I was a senior nurse and I had been working for 16 hours and had to do four drugs rounds because there weren’t enough qualified nurses on. I was looking after the elderly, which was a deeply unpopular speciality, so we received the dregs of the agencies. One nurse was walking past an elderly patient with dementia and just ignored him. I asked why and she said: “That patient isn’t allocated to me.” I sent her home and carried on working another shift. Then I thought to myself: there is no reason why agencies can’t be run properly so they send in people who are committed and care.’
When she announced that she was quitting as a nurse, her bosses thought she was joking – that was pretty naive as she’s very much someone who doesn’t do things by halves. ‘I drive the business and leave all the hard work to other people,’ she says. ‘But if they can’t make things happen, they need to have a good reason as I want to know why. Generally, they come round to my way of thinking.’
Vital Statistics
Date of Birth: 10.01.1961
Marital status: Engaged (‘been with the same person for 23 years’)
Children: Four
Favourite restaurant: Nobu
Inspirational figure: Anita Roddick, late founder of The Body Shop (‘She was great because she couldn’t give two hoots about the City and she said exactly what she thought. She was funny and supportive, not just to women but men too: a genuinely nice person who would always give you the time of day’)
Business motto: ‘“Never give up, never give in” (a family and business motto from the movie Galaxy Quest)’
