Case Studies
CPP Case Study 2 – Recruit Media
Written
by Victoria Lubbock and Alan Binnie (former owners of Recruit Media)
Key services provided:
- Market sector understanding
- Budget and target setting
- Remuneration strategy
- Competitor research
- Outsourcing
- Access to relevant specialists
- Business aquisition support
The situation:
Recruit Media Ltd was a privately-owned niche recruitment consultancy, launched in 1989, and specialising in creative, media and design placements on both a permanent and temporary basis.
The recruitment business is one which is especially susceptible to ups and downs in the economy, making it imperative that market trends are identified early and acted on. This was particularly the case in the recessions of 1992-3 and 2000-01 which hit the recruitment sector very hard. Through prudent financial care, Recruit Media was able to successfully ride out these downturns, returning quickly to profitability in each case the following year.
CPP was the company’s accountancy firm from 1991 to 2005, successfully steering the business through three recessions, one aquisition and ultimately a sale.
How CPP Helped:
CPP has a solid background and expertise in the recruitment sector, which has seen a myriad of legislative changes in relation to employment law (e.g. the introduction of the Working Time Directive, maternity, redundancy and dismissal legislation). Through well researched advice and the ability to upscale and downscale the level of services needed, CPP remained the first and only choice for Recruit Media’s accountancy, finance and business consultancy needs.
CPP always kept a close eye on Recruit Media’s competition which varied from very small independent operators such as The Media Network, through to large-scale IT recruitment business such as Best and Office Angels. The information was very helpful in reviewing competitiveness and in responding to complex tenders.
One of the main features of the recruitment business is the need to attract and retain quality staff. It was therefore essential to ensure that the business was able to provide excellent and competitive remuneration benefits for staff. Keen to explore new and innovative schemes to attract quality staff, CPP was involved in advising on the introduction of a staff share option scheme in 2001. Commission schemes needed review and tailoring to differing market conditions.
Rather than employ an on-site bookkeeper or finance team to manage payroll, calculating staff commissions, preparing monthly management accounts and managing the purchase/debtor book on a day-to-day basis, Recruit Media passed all work to CPP. Without an in-house Financial Director, Recruit Media always relied heavily upon CPP for providing a broader service than one would expect from any Chartered Accountancy firm.
Over the years, Recruit Media was approached by a number of potential suitors, including competitors. CPP provided invaluable advice and contacts in this area. It was decided that the company was best served without being sold.
During MBO discussions, shareholders, however, in pursuing the MBO option, did select legal and tax advisors recommended by CPP and have been very happy with the outcome of these introductions.
Results of CPP's support:
From 1991 to 2005, CPP successfully steered Recruit Media through three separate recessions. Peter Ciccone, the firm’s principal, was appointed as a non-executive director in April 2002 where he remained an active participant until an MBO of the business was concluded in January 2005.
In 1999, Recruit Media acquired another small recruitment business, Informed Business Services. Effectively a ‘fire sale’, it was a pre-requisite to move very fast and put together a package/offer acceptable to the principal of that business, adhering to TUPE, and integrating a number of new staff. During this time, CPP was instrumental in assisting the Recruit Media shareholders to successfully conclude a deal.