IR35 non-compliance, and how to avoid it.
For recruitment agencies, it’s perhaps the hottest topic right now. IR35 is in the spotlight, with non-compliance potentially resulting in ...Read more
This year, Back Office celebrates its 20th year in business – and founder and MD Ian Humphrey is still at the helm. So what have been his proudest moments, and what keeps him coming back for more? Here he tells all…
What led you to set up Back Office?
I’d always been a bit of an entrepreneur in my youth, buying and selling, wheeling and dealing. Then I gained a Law degree and CIMA accounting qualification, joined Unilever and got a broad experience of business going up through the ranks to Commercial Director, mainly in the transport and logistics industry.
In 1995 I joined a recruitment agency called Meridian Business Support, which had a loss-making subsidiary in Gloucester that processed outsourced payrolls from third party recruitment agencies. I was given the task of ‘killing it or curing it’ – it was in a mess, but I liked the concept and spent three years turning it into a success.
When I left Meridian in ’98, I was at that ‘crossroads of life’. Should I go to another senior job, or stop talking about what makes a business successful and try it for myself? I chose the latter, and Back Office was born!
What was your ambition back then?
Initially, to see if my theories held water! I believed a company could be profitable by daring to be different – or in our case, extra-ordinary – at what they do, through better customer service and attention to detail, right-first-time accuracy and doing what’s right rather than what’s easy.
One of the biggest challenges has been to maintain those core principles through staff and structure changes as we’ve grown – it’s easy when there’s just a few of you, but when you expand it’s more important than ever, and I think those principles are more relevant now than they were 20 years ago.
Has the industry changed much in 20 years?
Ours is a niche marketplace, and we’ve seen a lot of comings and goings from competitors over the years. I think there are three main reasons why.
Firstly, legislation. It’s changed dramatically in the last 20 years, with successive governments bringing in WTR (Holiday Pay), AWR (parity with permanent staff), IR35, RTI Real Time HMRC reporting), Auto-Enrolment pensions, Travel & Subsistence rulings, and more recently GDPR as well as a plethora of smaller social and technical changes. We have to implement and comply with all these as standard, but are rarely able to offset the increased costs; hence tighter margins, which have weeded out a few competitors over the years.
Technology’s had a big impact too, as you’d expect. IT can really improve the customer experience, yet several competitors have failed in spite of having an excellent IT offer. That’s because they’ve tried to use it as a substitute for customer service, rather than a tool to help it. For my money, any business that doesn’t have the customer at its core will never succeed long-term.
And finally, there are the motives for starting up. So far, we’ve seen bankers and financiers trying to develop into the recruitment marketplace; IT companies hoping to use their software as an outsourcing tool, large recruitment agencies trying to achieve synergies or horizontal integrations; former umbrella company providers trying to widen their net; and front office providers looking to provide back office services.
So what does that mean for business?
Inevitably, there’s a ‘race to the bottom’ – cut-price deals being offered as these new entrants look to build their market share quickly and realise a return on their sizeable investment. How they’ll approach customer service remains to be seen though; that’s what will determine whether they’re still around in 20 years!
What’s been your proudest moment?
There have been so many…but strangely, reaching the break-even point in 1999 isn’t one – I always knew that would happen if we made sure we got things right first time every time!
I’d say getting our first agency client – it was a real act of faith from them to go with a brand new venture, the sort of trust we like to repay many times over – and moving out of my attic into a proper office six months later were both highlights.
Celebrating Alison’s 15th year of service in 2015 was another; she and our other long-service employees underpin all that’s good about what we’ve achieved. And I love watching individual’s progress too, like the employee that was repeatedly promoted from junior scanner to become a key senior member of our IT development team.
It’s very satisfying handing recruitment agency awards to our own client agencies at national events too – that’s a proper mutual partnership! – and hearing from clients when they’ve tried elsewhere and decided they’d rather come back to us. They’re always welcomed back with open arms, of course.
On a personal level, there was taking the whole team to Lapland to see Santa on my 60th birthday, and the fact we receive presents from employees and client agencies – surely that should be the other way round? Then there’s supporting the Mini and Junior sections of Congleton Rugby Club for many years now. If we can’t give something back to our community, what’s the point?
What about the next 20 years?
If we carry on being extra-ordinary, I don’t see any reason why we won’t prosper and grow regardless of the wider economy and competitors. The future’s looking good…and it’d be even better if Man City were to lift the Champions League Trophy as well!