Lessons – shedding clients as a pathway to success

Three years ago, Craig Batchelor was feeling dissatisfied with where his successful business had taken him. He shares his lessons about stripping his business back and staying true to his values.

When Craig Batchelor was trying to work out how to transform his business into something he and his staff would want to keep working in, he made a decision that had his accountants questioning his sanity.

Batchelor, the MD of Edge Personnel and Arditi, made the courageous decision to part ways with two of his largest clients who, combined, accounted for some 60 per cent of his annual business revenue.

Two years later, Batchelor insists it was one of the best decisions he ever made.

“At the end of 2015, we were dragged into a messy common law dispute through one of our major clients and it forced me to stop and look at what we were doing as a business and whether I wanted to keep doing that,” Batchelor said.

“I looked at the company and felt that it didn’t fit with the values I had when I started the business back in 2000, where the premise was that we would only do business with people we enjoyed doing business with. I asked myself how much fun I was having and it wasn’t a lot.

“We had basically become a one-trick pony where the fundamental function of our business was servicing two major clients who were sucking up all of our time, energy and oxygen. We had essentially become order fillers; good order fillers, but that really was effectively all we were doing.”

Edge Personnel, originally known as LRS Labour Solutions, started on the back of logistics and warehouse provision. While the company had a small number of clients in 2015, their two major clients required 70 to 100 temp staff each, on a daily basis.

In 2004, LRS Labour Solutions was named in the BRW Fast 100 List. It was a feat replicated under the re-branded Edge Personnel in 2005 and 2006.

“By 2015, most of our energy was being taken up with the sausage factory mentality of finding the staff these two clients needed,” Batchelor said. “So much of our time was dedicated to these clients, we weren’t able to bring in new business and expand our own business into other industry sectors.

“As a result, we were losing staff because they would assess their own situation at the end of the year and know they would be doing exactly the same thing next year. We couldn’t provide them with variety under the structure we had in place and good staff want to be challenged and engaged and quite rightly so.”

At the end of 2015, Batchelor took stock and that meant being transparent with his staff about where they were and where he wanted to take them.

“I sat all my staff down and said to them, ‘when you meet someone at a barbecue and they ask you what you do for a living, what do you say?’ I wrote their answers up on a whiteboard and then asked them what they tell people we do as a company,” Batchelor said.

“Everything went up on the whiteboard so we could all look at it and then I asked if the answers would inspire anyone to want and come and work with us. They didn’t.

“We had to decide if we were going to change the business and the structure. I knew I had to create some space so we could fill it with something else. We could see the risk, but we could also see the upside.

“So I decided to replace our major clients who had large, temporary personnel demands which had peaks and troughs, with small to medium businesses which would need smaller numbers of staff.

“We found this changed our dynamic and focus and gave us the ability to manage both our business and client and candidate relationships more effectively.”

Batchelor said he was driven to build a sustainable business which fulfilled his original vision, while providing a workplace which would give his staff drive and excitement so they feel good about what they are doing.

He explained the process of transforming Edge Personnel was done over a period of months and included monthly staff meetings where staff were shown the company’s financials and where shared values, mission and vision were determined as a template for the company’s new structure.

Performance evaluations were also transformed into a reciprocal process. Reviews were conducted with all members of the team and once completed, Craig had his own performance reviewed by the team collectively, to further enhance the feeling of being part of a team.

He also used this opportunity to restructure many aspects of the business, transitioning to cloud- based operating systems, which facilitate flexible working conditions for staff as well as other infrastructure adjustments to enable the business to be more agile.

Edge Personnel works in logistics and warehouse provision, food production, small trades, in-home care, manufacturing and white collar positions sourcing staff for permanent and temporary roles.

Batchelor said there were many benefits of working exclusively with small and medium sized businesses, including:

  • Reduced WorkCover premiums

  • Reduced infrastructure costs

  • Smaller in-office staff numbers to work with

  • Expand reach into different sectors

  • Ability to respond more in ways that are flexible and agile

  • Improved quality of relationships with clients

  • Paves way for more successful placements

  • Improved margins

  • Fewer peaks and troughs in demand

“When I made the decision to part ways with our two major clients, there were some people around me who questioned what I was doing and whether I had lost my sanity, including the accounting firm I had been with for 20-odd years,” Batchelor said.

“I changed accounting firms.”

With more than 20 years’ experience in the recruitment sector, Batchelor admits that while letting his major accounts go and banking on building his business with a raft of smaller clients was risky, he says it was a calculated risk.

“I had to do the numbers and I did them over and over again,” he said. “The first two months were very lean, as I expected.

“I knew there would be a gap once we let our big clients go that would not be immediately filled and I also knew that while costs would come down, it wouldn’t be enough to cover the gap.

“I knew that we just had to hang in there long enough, have the courage of our convictions and had to back our experience and knowledge in the network and industry. By the third month, we reached break-even point and we haven’t looked back since.

“I can guarantee you that the two clients we let go would have been lapped up by other agencies with great relish and probably at cheaper rates.

“But we knew it was the right move for us to step away and there are no regrets.”

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