Recruitment forges ahead

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The Independent Online
THE PROMINENCE in this year's Independent 100 of computer companies such as Steve Vassiliades's Basilica Computing in St Albans continues a trend stretching back to the listing's beginning in 1990, writes Roger Trapp. From the start, high-tech businesses based in the South-east of England have dominated this table of Britain's fastest-growing companies compiled by the Independent on Sunday in association with Price Waterhouse, the accountants.

But the buoyancy of the UK economy over the past few years is reflected in the rise of a few other sectors to challenge IT's pre-eminence. Retailers, leisure companies, even estate agents, make an appearance in what has become the definitive examination of this increasingly vibrant sector of the economy.

But of particular interest is the half-dozen recruitment companies in the listing. Some, such as 21st-placed Glotel, have had their growth fuelled by the well-known heavy demand for IT professionals as a result of the millennium bug problem.

Many others, though, are expanding because of the dash to increase employee headcounts in a variety of disciplines in response to the booming economy.

Moreover, the strength of the sector is creating a lot of activity, with a number of firms in recent months either selling out or being floated on the stock exchange. For example, Robert Walters Associates, a specialist in the financial area that was formed by a former employee of Michael Page, has been one of the best performing new stocks, while Michael Page itself is one of the big players that have picked up niche players.

Meanwhile, US companies are reported to be showing great interest in the UK recruitment sector because they see it as still undervalued compared with their domestic arena. In fact, Prime Time Recruitment, placed second in the Independent 100 with annual sales growth over five years of 114.5 per cent, was born of an early bout of consolidation. The Northampton company was started in 1992 by David Gallagher after the part of the Hestair group he had been running was bought by BET, the widely-based services company, which has since become part of Rentokil.

Mr Gallagher admits that the start was "fairly rocky", as not only was the economy in a slump but his embryonic company was held back by restrictions arising from a dispute with his former employer. But with a focus on the food-processing sector in particular and industrial temporary placements in general, the company started to develop. Aided by the setting up of an arm devoted to sales recruitment, the company has recently grown rapidly and now has 47 branches stretching from Glasgow to Poole and Wales and last year achieved a turnover of nearly pounds 28m.

As with many other companies that have been successful in the Independent 100 listing, Prime Time sets a lot of store by people, both in terms of its 180 employees and those it is seeking to place in jobs.

With the current year having started "fantastically well," Mr Gallagher and his colleagues are looking at several options, including flotation. However, he says that nothing has been decided yet.

On the other hand, HW Group, the London recruitment consultancy best- known for Harrison Willis, the specialist financial firm, has indicated that it intends to go public by 2000. Though the company dates back to the 1950s, it owes its current form to a 1997 management buyout under which Graham Palfery-Smith, the chief executive, and senior colleagues bought 75 per cent of the company, with the rest split between 3i, the venture capitalists, and 100 shareholders. Mr Palfery-Smith sees this as especially important. The same people have been given new motivation under new management, he says.