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Recruitment agents and Opportunity UK

Andy at SironaConsulting reported earlier today that the former CEO of Woolworths has started a new recruitment agency.  For non-British readers, Woolworths was a High Street chain which, at its peak, was a precursor of $1 shops.  This year, it finally went under and put a lot of people out of work.

Andy wondered how the CEO of a failed company could front a start up and his question led me to a question of my own.

Which recruitment agencies in the UK (or elsewhere) specialise in the 4 BCG segments?

Cash cows

Cash cows dominate their own market but are growing slowly if at all.  They typically offer stable careers, plenty of training and good benefits, such as final salary pension schemes.  They are a great place to raise a family.  And  importantly, cash cows tend to recruit from other cash cows.  There is an inside track of cash cows, so to speak.

Downside:  If you have been working in a cash cow, you’ve been living a soft life.  You are ill-prepared to enter the hurly-burly of a small business and the other 3 segments.  Once in cash cows, it is better to stay.

Question-marks

Question-marks are typically start-ups.  They don’t have much cash and pay low wages with stock options.  If the company makes it, like founding employees of Google, employees get very rich indeed.

Downside:  If the company does not make it, you have little to show for the years you spent with them.  This is not a good place for someone with a family to support or someone who wants to return to a cash-cow.

Stars

Stars are in a high-growth phase.  Basic pay is still modest and benefits are not luxurious.  Indeed, bonuses are linked to performance and may be lavish to compensate for the low pay and the very real possibility of not receiving a bonus at all.

Downside:  The official downside is that if growth does not happen, you will not get a bonus.  The real downside is two fold.  You only know how to do business in growth conditions.  Anyone can do business in an up-turn.  Can you also succeed in a down turn?   And as we have all learned, some growth is fictious.  If you don’t really understand the business, you might be involved in a Ponzi scheme.

Dogs

Dogs have had their day.  They no longer dominate their segment and they are no longer growing.  Oddly, though, employees are paid very well in a dog and in cash, not benefits or stock-options or performance bonuses.  Why?  Well obviously, no one with any sense will work there unless they are paid almost in advance!

Downside:  You make a lot of money helping to squeeze the last pennies out of a dog but you become a dog specialist.  You would be disruptive in the lazy life of a cash cow.  Startups and their delayed payments will scare you. And you don’t know anything about growth.  Once in a dog, you move from dog to dog.

Recruitment Agencies

The credit crunch has changed the trading conditions for companies in the UK quite and it is likely that many companies have switched segments.  The star of yesterday may well be the dog of today.

An intuitive understanding of the four segments and the HR policies that go with them seem to play beneath current public discussion about the credit crunch.

  • Should cash cows have been managed like stars and hasn’t this confusion led to their collapse?
  • Can the banks be reformed back into the slow, passive cash-cows they once were?
  • Now that derivatives hang around the bank’s necks like albatrosses, are they not indeed dogs?

For my part, I suspect the banks are simply stars that were managed with insufficient understanding of the business.  But if they had been managed as startups (which is consistent with a level of ignorance about a business and its trajectory), they should have had delayed stock options.   And given their strategic importance to UK, the powers-that-be should have insisted on some careful modularization and ring-fencing of risk.

It might be possible to mould the banks back into the slow and cautious form of the cash cows that we once knew banks to be, but I wonder if cash cows are made so readily.   I suspect that banks need to be unbundled into the four segments: safe operations of cash cows,  unknowable outcomes typical of start-ups, growth related work of stars,  and cashing-up operations of dogs.  But I’m not on the inside.  This is only armchair analysis.

What I am curious about, given Sirona Say’s post of today, is which recruitment agencies specialise in cash-cows, which in startups, which in stars and which in dogs?

And how has the credit crunch changed the mix of companies you deal with and hence your own focus and service?



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