THE FRIDAY INTERVIEW: Jason Kennedy, Grafton Recruitment:HE'S ONLY in the job a little over six weeks but Jason Kennedy has wasted little time getting down to business as group chief executive of Grafton Recruitment, a Dublin-based business with offices in 18 counties.
“At this point we’re doing nothing in the business other than creating a fit business,” Kennedy cheerily explains over a coffee in the Fitzwilliam Hotel on St Stephen’s Green.
That’s corporate speak for restructuring. Kennedy has already stripped out £5 million in costs and plans to achieve the same again by the year end.
In “southern Ireland” terms, that has resulted in Grafton closing its offices in Temple Bar and amalgamating branches in Walkinstown and Newland’s Cross, and Swords and Blanchardstown. About 40 people have left the business in Ireland so far this year.
Overseas, Grafton has withdrawn from Portugal and downsized in Chile, Singapore and Hong Kong.
Kennedy (38), a keep-fit fanatic, intends to whip Grafton into shape. In recent years, its turnover has treaded water, bobbing around in the £125 million to £130 million range, while becoming somewhat flabby.
“The good news is that we’ve not dropped market share [he means turnover] against the backdrop of the worst economic climate in years.
“The bad news is that when the market was going like this [he points his left arm upwards], we managed to stay static. But what we did do in that period was build the cost base, so we’ve got fat. My primary objective at this point in time is, yes, to maintain our market share but to take some of the fat out of the organisation.”
Kennedy’s not hanging about. In his short time in charge, he’s been to all of Grafton’s overseas offices bar Chile.
Today, he heads for Rio de Janeiro as part of the annual Ernst Young Entrepreneur of the Year award’s CEO retreat, with an eye on drumming up some new business. He’ll also be visiting Peru. “We’re retrenching so we can grow,” is Kennedy’s upbeat assessment.
He’s a northside Dub by birth with an optimistic outlook, borne, no doubt from eight years spent working for American recruiter Manpower.
“We’re pulling out of markets that have underperformed perennially and don’t have the same strategic significance for us compared with other markets where we don’t have a presence.”
Kennedy has his eye on expansion into the Baltics, Africa and the Middle East.
Grafton has long been a pioneer among local businesses “flying the flag in parts of the world that were beyond the vision or the perspective of many Irish companies”, according to Kennedy. Its footprints extends north to Belfast, south to Chile and east as far as China.
Founded in 1982 on Grafton Street – hence the name – its founders James Kilbane (61) and Ken Belshaw (57) decided recently to take a step back from the company and were looking for someone to reshape the business.
Kennedy’s next move within Manpower would have been to its headquarters in Milwaukee, Wisconsin, but, with three young children, he didn’t fancy uprooting.
“The stars all pointed in the same direction,” he says somewhat cryptically. “James, Ken and I all happened to cross paths and what they needed and what I wanted in life was absolutely aligned. So it was a timing issue.”
Grafton’s business essentially comprises its high-street temporary and permanent work placements; its specialist IT and technical engineering arm; recruitment process outsourcing; and its Spengler Fox global executive search business.
The revenue model is simple. For temporary workers, Grafton is the employer, charging clients whatever rate of pay applies plus a margin of up to 30 per cent.
It charges a fixed fee of about 15 per cent for permanent placements while its executive search arm earns up to 33 per cent of the salary for filling top-ranking corporate positions.
Not surprisingly, the placing of permanent staff in this recession is “under most pressure”. “Employers aren’t hiring perms, they’re employing temps,” Kennedy explains.
He is also planning to add an online dimension in the near future. “We’re in the process of developing our digital online strategy. We see that as very much a complementary tool to our existing service offerings. I don’t see it as a business stream that will cannibalise our existing business.”
With the boom years of the Celtic Tiger now just a memory, the Irish labour market has changed radically. Suddenly, workers here aren’t so fussy about what jobs they take.
“If it meant getting on the 46A and travelling across the city, that was too much,” Kennedy recalls. “The job had to be on their doorstep and paying premium salaries.
“Now what’s happened is that the demand has abated and there’s no choice now, so the indigenous population who didn’t want to do these jobs years ago want to do them now.”
He is unquestionably right but didn’t the recruitment industry play a part in all the madness of the Celtic Tiger years?
“We supply people and we make margin on the people. The more people we supply, the greater the margin and the more profit you make and we’re in business to make profit. While the demand and the appetite was salacious and it needed to be fed, of course we fed it. But everybody did. Hindsight is a great thing, but this country lost sight of terra firma and nobody took a stance or cried halt.”
The recession has put the brakes on growth in Ireland. Kennedy is sanguine about the future. “Employers still need people,” he says. “Our market still exists but it has become more competitive and demand has lessened.”
His advice to today’s graduates and job seekers is twofold. “Firstly, be aware that the world is a tiny place so they must be prepared to travel. And the second thing I would actively encourage graduates to be aware of is to always be selling. Always put their best foot forward. Be conscious of Facebook, Twitter and Bebo because their life is on show and they are always selling.”
Kennedy’s career path could have been so different. He studied psychology in UCD and took a master’s in organisational psychology in DCU. “Ultimately, practising clinical psychology wasn’t something I was built to do,” he says.
He took a higher diploma in finance before deciding on recruitment as a career in the early 1990s.
“At that point, I saw it as a back door into HR [human resources]. Quickly, when I was in there, I saw it as an opportunity for a young, hungry northsider to make commission.”
He has come a long way since the time in 1991 when he and a couple of pals decided to sell ice creams on a beach in Rimini, Italy.
“I went to Italy to make my fame and fortune with two friends from school. We decided working on the beach would be a good way to live and make money and we spent the couple of hundred quid on ice creams but never bought a place to store them.
So we melted whatever money we had on the beaches of Rimini and learnt a hard lesson. It was literally a financial meltdown,” he says.
Kennedy bounced back from that early entrepreneurial setback and went on to become deputy managing director of Marlborough Recruitment, the David McKenna-led business and stock market darling before crashing spectacularly in the early part of this decade.
“They had an inability to manage their cash” is how Kennedy sums up Marlborough’s demise. “That for me was a great learning curve in terms of raw energy.”
Kennedy gives a clear impression that his job is to whip Grafton into shape over the next few years with a view to providing its founders with potential strategic options.
While he hasn’t been given a stake in the business, Kennedy hints that successfully completing this task could be financially rewarding.
“If and when, at some point in the future, we choose one of the roads that may be presented to us, I certainly won’t be left out in the cold.”
ON THE RECORD
Name:Jason Kennedy.
Age:38.
Position:Chief executive, Grafton Recruitment.
Family:Wife, two sons and a daughter.
Lives:Malahide, Co Dublin.
Hobbies:Tennis.
Something we might expect:"Weekends are sacrosanct with the family."
Something that might surprise:"I have a paralysing fear of heights for someone who flies so much. I have a black belt in Shotokan karate."
