Companies were once run in an insular manner. Business owners developed and produced everything in-house and kept staff close at hand. Today, the businesses that are more likely to succeed are the ones that collaborate with more efficient and nimble external partners.
The logic behind this is simple: companies can’t be good at everything, so why try? Sometimes you just can’t buy the experience you need, and, at times, the time and effort required to do so restrict your focus on running the business. Why attempt this when you can benefit from the hard work that others have already put in, and which can shorten your time to market for new products, as well as introducing new talent to your company? An organisation can save a lot of resources (human and financial) by freeing itself from the burden of having to carry out every bit of work and can focus on the core aspects of its business.
In addition, working with outsourced partners may facilitate a new way of looking at your business. This can help you to shape it for the future and even uncover new areas to expand into. With the right partners, you can save money. By dealing with a company, which is completely focused on one business niche, you can be exposed to newer technology specifically designed for your business. This makes you more efficient while giving you better cost control. However, the need to work with partners may be obvious to most, but finding the right ones is the tricky part. If you select the wrong people to work with, who don’t match your company’s values, it will just cause you problems. 34-year-old Arnoux Maré, CEO of Innovative Solutions Group, which owns the subsidiary companies Innovative Staffing Solutions, Innovative Accounting Solutions, Innovative BEE Solutions and Innovative Guarding Solutions, has built his business from the ground up and has achieved tremendous success over the past six years, to the extent of a group turnover of R600 million per annum. In fact, the group is growing so rapidly that Maré intends to more than double his employee numbers, from 6 000 employees to 15 000 by the end of the 2019 financial year.
Please share some background to the Innovative Solutions Group, what your core offerings and competitive advantage are?
Innovative Staffing Solutions is an outsourcing and Human Resource consultancy firm, which I started in my lounge with R500 in my pocket and two employees six years ago. It didn’t seem like much at the time, but all I needed was one client to take a chance on me. If I could get one client and successfully outsource staff to them then I could get another. I took big risks in the hopes of big rewards. After all, I had nothing to lose. My aim was to transform this small business into a successful, growing business, which held the potential to create tens of thousands of jobs and, in turn, would support hundreds of thousands of South Africans. With big thinking and many sleepless nights, we expanded to two Gauteng-based offices. Six years later, we have multiple offices across the country and have launched a holding company, Innovative Solutions Group, which currently has 17 subsidiaries, and we proudly employ more than 6 000 people. Our philosophy is ‘What you put into your work is what you get out’. This value is embedded throughout every subsidiary and runs through every layer of management and staff. The basis of our business is the idea that outsourcing is the key to business success. Why should a firm of lawyers be occupying their time employing cleaners, security guards, IT technicians and secretaries when they should be maximising consulting hours at a far higher rate of revenue? The same principle applies in almost every sector of our economy.
The ‘big idea’ we had was that business owners and entrepreneurs should be enabled to focus entirely on their own ‘big ideas’. To accomplish that, they need to have reliable service providers who act as their proxy, who can assume the same level of responsibility and accountability as the business owner would himself, had he been providing the service in-house. Our largest subsidiary, Innovative Staffing Solutions’ core focus is optimising our clients’ workforce efficiency so they can get more done, by partnering with a staffing firm driven by innovation. We provide strategic staffing, professional recruiting and on-site services to clients throughout the country. Whether staffing challenges are large or small, simple or complex, we develop creative solutions that can save our clients up to 60% of their operating costs—we do this across all sectors of industry, whether it be logistics, hospitality, mining, engineering or even agriculture, we cover it all.
What are the current trends you have noticed in the economy and the core threats facing business owners?
All businesses are struggling to remain viable in a tough economic environment where competition is rife. South Africa is a middle-income country with an abundance of unskilled workers. However, for a small firm and even for many bigger firms wanting to focus on their core business, managing them and ensuring that they remain skilled and current with new working practices can be a time-consuming challenge. At the other end of the spectrum, skilled workers and those in managerial positions are in high demand, expensive and in short supply. They can be just as expensive to manage due to the need to retain them in a mobile job market.
These demands on time exacerbate a situation where South Africa is a highly monopolistic business environment. Small businesses and new business start-ups often struggle to compete with large, dominant companies and barely two in 10 start-ups succeed. As we were once a start-up ourselves, we understand the challenges faced by fellow entrepreneurs. It is a challenge we’re passionate about. Our promise is to cut clients’ operational costs by anything up to 60% and improve productivity and efficiency. We take care of the non-essentials so that our clients can focus on their core business. We have a proven track record of reducing absenteeism and sick days amongst staff while improving their efficiency and productivity. We do so without depriving staff of a single benefit. Rather, we give them access to a broader range of large-company type benefits, which a small- or medium-sized company often can’t afford otherwise.
What are the challenges facing Innovative Staffing Solutions in the next few years?
As a staffing company, the biggest challenge we have in common with all our clients is a skills shortage. Of all the skills shortages in South Africa, the driver shortage is one of the most critical. The danger is that, with high levels of corruption in our country, many unemployed people can obtain a Professional Driver’s Permit for what is a highly skilled job, with just an hour’s paperwork and none of the necessary qualifications. Within days, these individuals can be driving a multi-million rand rig and sometimes carry multi-million rand loads. Not surprisingly, we treat those qualifications with scepticism and rather rely on detailed background checks and rigorous practical checks to establish actual competence. As a result, only one-fifth of applicants is finally employed.
The current shortage of skilled drivers in South Africa has been estimated at approximately 3 000. The single major challenge facing the transport industry is, therefore, training. This is the challenge we are facing. It is not just about training new drivers. Existing drivers need constant training and refresher courses to ensure their safety and the safety of other road users. We have advanced plans to address this problem for the entire industry: we are in the process of registering and managing an in-house training centre for drivers with the capacity to train 2 400 skilled drivers a year. We are also encouraging the transport industry to establish apprentice-type schemes to train matriculants straight out of school. Unfortunately, this isn’t already happening because transport companies lack the focus on people, which Innovative Staffing Solutions has. Where other companies may become so desperate to recruit skilled drivers that they will neglect critical aspects of the employment process, we, on the other hand, don’t just naïvely take credentials presented by applicants at face value. We verify applicants’ qualifications, perform background screenings and routine checks. In addition, we put applicants through stringent yard and public road tests, which are well in excess of what they would ever likely experience on the road.
What are the opportunities available to Innovative Staffing Solutions in the next few years?
We are confident that there is a growing perception that it is smart business to outsource all your business’ non-core areas to professionals rather than invest time, which would be better spent elsewhere, trying to do it yourself. Outsourcing is a valuable business tool and we are occupying that ground. Innovative Staffing Solutions offers a ready-made solution specifically tailored to your business needs by assuming responsibility and accountability for clients’ staff, ensuring they are appropriate for the role they are being placed in. What is important is to provide staffing solutions to both large organisations and small- to medium-sized enterprises. Our solutions are specifically developed to maximise service delivery at a cost-effective price for all types of business. The advantage of outsourcing is that it permits the redeployment of staff to alternative sites at relatively short notice, which ensures job stability for the staff member and assurance for the client that they will never be left in the lurch by an employee who just didn’t pitch up for work.
What have some of Innovative Staffing Solutions’ major successes been in recent years?
The growth of Innovative Staffing Solutions has been truly exceptional in its first six years. We have clients who have been with us since the very day we started up as a Human Resource Consultancy Firm and that is an achievement we are exceptionally proud of.
What are the challenges of working with your bigger clients, and what successes have you enjoyed together?
We tackle one of the biggest challenges faced by almost all companies, which is that they spend a disproportionate amount of their time in a highly regulated labour market on hiring, managing and firing staff. Our clients consistently tell us we have ‘cracked the code’ on traditional staff management. Innovative Staffing Solutions addresses this cost on behalf of clients by assuming responsibility and accountability for clients’ staff and ensuring they are appropriate to a business’ needs. We differ from other providers by offering passion and round-the-clock service, which anticipates problems before they ever occur. Our exceptional growth is a demonstration of the satisfaction our clients’ experience. We have been able to do so in the presence of our unparalleled human resource and industrial relations expertise.
We are often told that the sourcing of new staff and saving on the time taken to interview potential candidates is a big drawcard for our customers. We have exceptional disciplinary processes and professional human relations services. In the event of any labour unrest, we deal with the issue without it affecting the productivity of our clients’ businesses. We supply staff to replace those not at work so that our clients do not lose any productivity. We take pride in the fact that our company’s contract managers are extremely professional and always available, and we will go as far as resolving any union issues our clients may have, swiftly and with minimum backlash. We also endeavour to win the approval of our staff by offering services that were previously not available to them, including cash advances and loans. By delivering on our clients’ quality expectations, they have favoured our firm’s processes with a high degree of repeat business. If any business needs skilled workers without the hassle of managing them, then outsourced labour management is a proven solution.
What are the major issues around sustainability and what do you believe are the keys to operating your various business interests in sustainable ways?
Sustainability is all about productivity, saving money, improving efficiency and getting more done with less.
This virtually describes our business model. In a survey published in the New York Times, American workers admitted that only about 35% of their day was productive work time. The rest is lost to distractions—instant messages, chatting, the Internet, meetings, et cetera. We strive to get that 35% to as close to 100% as possible for our clients. While an absolute 100% is highly unlikely, it can be approached through staff outsourcing, which achieves: lower costs; more skilled staff; more focused management and improved customer service, resulting in a greater retention of customers. By managing staff over multiple sites, we can promptly relocate staff to cut levels of downtime and by improving working conditions, we improve staff morale, thereby reducing absenteeism, sick leave, unproductivity and a poor work ethic. Furthermore, when you outsource, you allow a business to skip certain personnel costs such as a medical scheme and leave pay—without the employees losing those benefits. We take over that burden, leaving the client with a fixed and predictable cost. Most managers report that hiring good people is the biggest business challenge they face, as there are only a few top managers for whom human resources is their core skill. Outsourcing frees companies from the hassle of in-house hiring, leaving them to focus on building their business.
That’s just one due diligence they have to do as opposed to interviewing dozens or even hundreds of individuals. That Innovative Staffing Solutions has grown to over 6 000 employees in just six years points to the efficacy of our systems. We have become a magnet for highly-skilled drivers, among other professions, as the word gets out that we are a reputable outsourcing company. Good customer service is the foundation of any company, but over-stretched executives wasting time hiring and firing, rarely give it sufficient attention. The time and energy they would otherwise have put into managing staff can now be redirected to managing customers. Each of these saves costs. The proof is in the number of companies that are currently outsourcing. While outsourcing remains in its infancy in South Africa, it is a huge industry in developed countries
What have been the challenges in terms of your labour force and ensuring continued employment for as many people as possible?
As mentioned, the shortage of qualified commercial drivers is the biggest challenge we face. We have advanced plans in place to establish our own training institute, but training in all its forms will remain a significant challenge for the foreseeable future. Trucks are high-tech instruments today, and even highly-qualified drivers need to be taken off work periodically to learn about new vehicles, as well as to have refresher courses on safe driving. On these courses, we have drivers reverse 200 metres through barrels, take evasive action both with loads and unloaded, as well as taking evasive action on roads during high-traffic and low-traffic scenarios. Drivers continue to receive regular training on routes, traffic and vehicle pre-checks. Once they’ve been through our tests, our clients have the certainty they have a skilled driver operating their expensive assets.
What are your major CSI initiatives and what do you have planned as new initiatives in the next year?
We have numerous CSI initiatives at a local level, to uplift communities in areas in which our employees live. These are many, diverse and, typically, grassroots. As an illustration, we have partnered with a non-profit company, Mimi Women, which aims to both provide job opportunities for unemployed and underprivileged women and to reduce schoolgirl absenteeism through the free distribution of sanitary pads. The first collaboration, which coincided with last year’s 16 Days of Activism, saw Innovative Solutions Group contribute enough sanitary towels to keep one thousand girls in school for the next year. The partnership is aimed at meaningfully addressing the fact that two million schoolgirls each year cannot afford sanitary pads, resulting in many going truant and ultimately underperforming at school. In extreme cases, it results in girls selling their bodies for sex to ‘blessers’. In many of the communities in which our staff come from, such vulnerable girls are exposed to the risk of exploitation by ‘blessers’—a particularly degrading form of abuse against girls. When we learned the consequences for these girls for the want of a supply of sanitary pads, which cost just R180 for an entire year per girl, we rearranged our CSI spend to enable us to participate in this worthy cause.
We are closely involved in the communities in which our staff members live and believe the best use of any discretionary money at this point lies in education. There are few things in life that can be more satisfying than participating in a venture which keeps thousands of learners at school. We can’t address poverty in its entirety but we can help to address one of the root causes of the poverty trap—the phenomenon of girls being abused through ostracism and exclusion due to their periods. Of course, sanitary pads alone will not keep children at school and we are excited about the educational work Mimi Women is doing to give girls back their dignity. Distributing affordable sanitary pads is an important activity for our partnership, but the greater part of our activity is empowering and educating the youth on issues of empowerment and self-respect. Our objective is to move girls and women from poverty to sustainability.
What do you see as the future growth areas that Innovative Staffing Solutions will look to grow market share in or become an influencer in?
Outsourcing is a worldwide phenomenon. Frequent research suggests that as many as 50% of all jobs are created by small businesses. Yet, the typical entrepreneur or small business owner has to be everything rolled into one.
If South Africa is to truly fulfil its economic potential, it has to create many more small businesses and that implies having a buoyant outsourcing industry. Business today has become an intricate science that requires a host of specialists who not all small business owners can afford. To improve the survival potential of small businesses requires outsourcing firms that can assume responsibility for all those ancillary services. This can be provided at a lower price and more efficiently than any single person could, thereby, leaving the small business with a fixed cost that it can budget around. Entrepreneurs and company bosses, who are otherwise exceptional at their jobs, can become easily distracted by things which really have nothing to do with their core function of creating a brand, marketing their business and managing operations. The smart thing to do in business is to recognise your weaknesses and get someone else to assist with these, thereby complementing your strengths. An important but often overlooked aspect of outsourcing staffing is that it can resolve a host of social issues when done intelligently. One example of this that I see quite frequently is illustrated by the case of a Northern Cape-based business.
It was starting a new operation in Limpopo and transferring staff was the easiest solution. Importing staff can create staff disruption, societal problems among locals in the area and sometimes leads to an increase in crime during job transitions. It is always better to have indigenous people. We have extensive databases in all areas of the country and are able to appoint suitable, vetted people from the area, enabling new start-ups to avoid such teething problems.Good business is always about making good decisions, taking calculated risks, having the right people for the right job and keeping one’s personal life separate from the business. I think most business people will find that outsourcing enables them to accomplish all those goals.
What are some of the values, which have inspired your business?
I believe the one thing, which separates Innovative Staffing Solutions from the many other staffing firms, is something almost impossible to fake: passion. I have enormous passion and energy for what I do and I only employ managers in my own mould. We do not have work hours but are available 24/7. I have managers who will cross the country to resolve a problem. In fact, our strategy is not to react to problems but rather to anticipate them and address them before they even arise. Our focus on the human element of any contract we sign is what enables the company to inject energy into any problem before it materialises because it is not distracted by any other concerns. Most strikes occur out of stupidity: a dispute, which, through inaction, is allowed to drift into something more serious.
What are some of the key leadership lessons you have learned during your career?
I believe the one thing, which separates Innovative Staffing Solutions from the many other staffing firms, is something almost impossible to fake: passion. I have enormous passion and energy for what I do and I only employ managers in my own mould. We do not have work hours but are available 24/7. I have managers who will cross the country to resolve a problem. In fact, our strategy is not to react to problems but rather to anticipate them and address them before they even arise.
Our focus on the human element of any contract we sign is what enables the company to inject energy into any problem before it materialises because it is not distracted by any other concerns. Most strikes occur out of stupidity: a dispute, which, through inaction, is allowed to drift into something more serious.
What are some of the key leadership lessons you have learned during your career?
My advice to any prospective CEO would be the same as to any prospective employee—don’t choose a particular business or career unless you have a passion for it. I believe it is simply common sense to reward good behaviour while tackling poor performance, and that every successful CEO must master this. This can sound very ‘black and white’ and overly simplistic, and, in fact, the philosophy only really succeeds when matched with a high level of emotional intelligence. Among staff, we are typically dealing with people who often have financial, social or marital problems at home. Therefore, it is vital when applying this ‘carrot and stick’ approach to retaining people, to simultaneously understand their personal issues. If you’re afraid to fire people, you’ll never hire them.
We are not afraid to discipline people when necessary in order to retain our efficiency, cost containment and productivity. But we also understand when people need a helping hand financially, or need some training. The ideal CEO is, therefore, someone who is prepared to dismiss staff when necessary, but who would rather see it as a last resort and try alternative disciplinary measures first. A good CEO is fair but strict. Knowing boundaries creates predictability for all parties concerned. Done properly, there is more emphasis on the reward than on the disciplinary process. For instance, our company has dismissed only one employee in the past year and that was with good reason. A good CEO cares deeply for every individual employee—whether it’s his work or his personal life. I believe you don’t get the best out of an employee unless you understand something of their personal circumstances. While I can’t do that for every one of our more than 6 000 people, I employ contract managers and middle management who have the same values as me so as to inculcate this caring approach throughout the organisation. When I see like-minded people, I hire them. When I find them within my business, I promote them.
I believe that a good leader recognises the potential in even his or her most mediocre staff. He recognises that they simply need more leadership and guidance through training, mentorship and discipline to develop their full potential. Based on my experience in this field, my advice to entrepreneurs is to outsource staffing and as many of the other services as they possibly can. If they feel they must keep staff, then strongly incentivise workers to go the extra mile. We have staff who have enjoyed seven salary increases in a single year. In a similar vein: we do not tolerate ‘clock watchers’. Make sure there is no place for them to hide. This allows a business to get the work done to a higher quality and for a fraction of the price.
What does the future hold for you?
Life is exciting, the business is expanding so fast. I believe in setting myself and my business tough goals, just as I do for all my staff. We have set the target for Innovation Staffing Solutions to reach the level of 15 000 staff by the end of the 2019 financial year. This is the result of uncompromising focus on the benefits of outsourcing. Outsourced staffing is one of those choices that falls into the category of working smarter, not harder. This dovetails with the ‘80/20 rule’. Only 20% of what you do produces 80% of your results each day. Working smarter, rather than harder, consists of focusing on the 20% and eliminating as many as you can of the elements that have a minimal effect on your overall productivity.
The 80/20 rule is the business case on which we sell our business to clients—and it finds a receptive audience. For an entrepreneur working all hours of the day to keep the business afloat, the concept certainly resonates that managing the emotions and reactions of human beings firmly falls into that 80%. He’s permitted to spend all his time on that 20% of actions, which produces 80% of results, and that is more profitable to him. I am convinced we can continue to grow fast because we live what we preach: we concentrate on our 20% without distractions. People are our business and we have a complete focus on all matters related to human resources and industrial relations.