HRNETGROUP: Leads in Engaging Talent, Transforming Lives

SearchAsia is one of HRnetGroup's 10 distinct human resources recruiting brands. (Above: The company's online job search portal)

With her easy demeanour and ability to build rapport with just about anyone, Adeline Sim is the consummate people person.

"I've been told that I'm all about people, people, people, and it's true," the Executive Director of HRnetGroup Ltd, which makes its trading debut today on SGX, said with a laugh.

Sim enjoys spending time with different people - whether it be her pastry chef bestie of more than two decades, her ex-colleagues in legal circles, the "Yummy Mummy" pals she began her parenting journey with, or the 424 people who co-own HRnetGroup with her.

Exerting a positive influence on those who cross your path is important, noted the 36-year-old, who is also big on books and food.

"My dad always says that anyone he meets should benefit from that encounter, and that has become a driving philosophy for us at HRnet," Sim added, referring to Group Chairman and human resources veteran Peter Sim, who founded HRnetGroup in 1992.

With 10,500 contracted staff at any one time, and more than 8,500 permanent placements across the region per year, the largest Asia-based recruitment agency in Asia Pacific ex-Japan wields considerable clout. "That amounts to one placement every hour. So the number of lives we can positively impact is tremendous," she said.

"At HRnet, we're adding value to people and elevating their lives. This puts us on a totally different level from just selling a service or a product," she pointed out.

"How do we do that? By helping organisations find better employees, and by helping candidates discover better careers, based on our specialist knowledge of the market."

Started as a one-stop shop for human resource solutions, HRnetGroup has grown to 24 business units with 838 full-time consultants as at the end of last year, from 17 business units and 426 permanent employees a decade ago.

With over 2,000 clients, its operations span 10 cities - Singapore, Kuala Lumpur, Bangkok, Tokyo, Hong Kong, Taipei, Seoul, Beijing, Guangzhou and Shanghai.

The Group has 10 distinct recruiting brands, including HRnetOne, RecruitExpress, PeopleSearch, SearchAsia and RecruitFirst. It specialises in industries ranging from healthcare, life sciences, finance and legal, to retail, consumer, industrials, telecommunications and technology. It also offers payroll processing, HR consulting and corporate training services.

HRnetGroup is SGX's second Mainboard listing this year. In its initial public offer (IPO), HRnetGroup issued 193.4 million new shares at 90 Singapore cents each. Due to overwhelming investor response, the 85.7 million placement shares in the IPO were 13.17 times subscribed, while the 3.4 million shares in the public tranche were 68.34 times subscribed. More than half, or about 103.9 million shares, went to cornerstone investors, while 440,800 shares were reserved for directors and employees.

Cornerstone investors include Aberdeen Asset Management, Affin Hwang Asset Management, FIL Investment Management (Hong Kong) and Meiji Yasuda Asset Management Co. Strategic investors include TechnoPro, one of Japan's largest technology-focused staffing and service companies, as well as Jasdaq-listed recruiter en-japan inc.

Heliconia Capital, a unit of Singapore state investment firm Temasek Holdings, has been a shareholder since last October and will hold about 1.95% post-IPO.

Both Heliconia and Simco - the Sim family vehicle that controls about 74% of HRnetGroup post-IPO - have agreed to a six-month lock-up period from the listing date.

We are a collective of entrepreneurs, and we behave as such.

- Adeline Sim
Executive Director

HRnetGroup

Sim attributes the process-driven mindset to the legacy built by her father and uncle - RecruitExpress Group Chief Executive Officer JS Sim. "It's that same focus on efficiency," she added.

HRnetGroup also has a sales-driven culture, with about 85% of employees holding sales roles. "In our organisation, there are no receptionists, no secretaries and no drivers," she said.

To sharpen that edge, particularly for those fresh out of university, employees are given a detailed sales manual and taught the 10-10-3-3 rule to boost success rates of matching candidates with clients, Sim said.

Every week, each employee is encouraged to set up 10 internal interviews with potential candidates, send out 10 profiles to clients, and set up three appointments for clients to meet candidates. This will result in a minimum of three candidates starting work per quarter.

"It takes discipline, and it's easy to fool yourself and say you don't need to set activity targets every week in order to be a PHC or productive headcount," she noted.

"But numbers never lie, and we have statistics to prove that the 10-10-3-3 formula, which is practiced by our most successful consultants, can make you very happy and very well-rewarded."

Remuneration packages and promotion criteria are equally transparent. "You don't have to carry your boss's bag to get promoted. For someone new, if you chalk up sales in excess of five times your payroll costs for two straight quarters, that's an automatic promotion."

The company's profit-sharing - rather than commission-based payouts - model also sets the tone. "This directs the energy of every team member to focus on, among other things, gross profits instead of market share, and cost-effectiveness instead of budget spend. This means everyone is motivated to ensure everyone else in their business unit is performing well," she added.

The IPO helps HRnetGroup build on its co-ownership model, and will see up to 404 more employees becoming shareholders, motivating them to continue growing profits. A total of 22 shareholders in specific subsidiaries will also have the option of swopping a portion of those holdings for shares in the company.

We believe North Asia will drive our next stage of growth. The recruitment markets in cities such as Shanghai and Tokyo are also highly fragmented, which provides compelling opportunities for us to deepen our presence.

- Adeline Sim
Executive Director

HRnetGroup

With relatively low entry barriers, competition is a persistent bugbear, and staying nimble is imperative, Sim noted. "We provide a blue-sky environment, giving our staff freedom to find the best areas of growth and move quickly without being dragged down by bureaucracy - that's how we thrive."

Talent retention is a huge concern. "Over the last two to three years, we've been very focused on training productive headcount, and haven't been concentrating as much on retention, so we're now working on that."

Another focus is how to best harness technology to disrupt the industry and leapfrog rivals. "It's easier to disrupt flexible staffing services with technology, so we've developed an app for that business," she added.

But professional recruitment services require more human intervention, for example, advising clients on the specific talent landscape, negotiating packages, or advising candidates whether moving or staying works best in their circumstances.

At the end of the day, it boils down to who knows the space best, and who is quickest in finding the right candidate.

"The question is how we organise ourselves to ensure we are faster and better, and a 120 hour-work week could be one way to go about it," Sim said, referring to a comment made by notorious workaholic and tech billionaire Elon Musk.

Musk had said that if one worked 120 hours a week, while everyone else worked 40 hours per week, one could accomplish in four months what the rest would take a year to achieve.

But the mother of two - her son is 10, and her daughter, 9 - admits that upholding the mantra of work-life integration is a more realistic goal. "It's not sustainable to say business always comes first - something will have to give."

"My son has already complained that other families go on holidays, while we just go where Mummy has meetings," she added with a laugh.

But the boundaries between work and play are blurred for Sim. "Work has become play. Work is not drudgery - otherwise, why get on the plane? We have offices in 10 cities, and I travel so much, so I try to look forward to something in every city that I visit."

Another comment from her son that gave her pause is: 'Mummy, you have very high standards and very little patience'.

"It's true - high standards have become my way of life," Sim admitted. "But we need high standards because we have to set the benchmark, and ultimately, it's the little things that count."

This attention to detail can be seen from HRnetGroup's rule of establishing a presence only in Grade A office buildings. "What's the experience and impression that you give clients and candidates when they meet you? Is it a positive one?"

Discipline is also critical. "I always tell my kids the amount of effort you put in matters above all else, because the degree of intelligence between you and the next person in class is not huge. Instead, how much discipline you have will be the key differentiator."

The Chinese proverb "yin shui si yuan" (饮水思源) - meaning when one drinks water, one should think of its source - is a maxim that resonates deeply.

"Gratitude and positive thinking are important. It's also about the law of attraction - if you keep having negative thoughts, they will ultimately happen," Sim noted.

"Life isn't perfect, but these are some of the values that will help us get through difficult patches, which are bound to happen, no matter who you are or where you work."

• Investors face immediate and substantial dilution in NAV per share and may experience future dilution as the offer price is higher than the Group's NAV per share as at 31 December 2016 of (a) 10.9 cents; and (b) 26.9 cents (adjusted for various effects including GLOW Initial Shares, Loyalty Shares, and Cornerstone Shares)
• HRnetGroup could be affected by fluctuations in economic activity and employment growth in the key sectors and geographies it operates in.
• Competition in the highly fragmented industry may affect its financial performance, as its operations have relatively low barriers of entry and face price-cutting pressure from existing rivals and new entrants
• HRnetGroup is subject to laws, regulations and policies imposed by various government and regulatory authorities, which may affect the operations and/or scope of its business; eg. it may not be able to maintain and/or obtain approvals and licences from relevant government authorities necessary to carry out or expand its business, or cope with future regulatory requirements.