Why the big groups are selling territories, and what it means

In June we bought six businesses from Hays in a single transaction. Sweden, Denmark, Hungary, Romania, Luxembourg and Czechia. Hays said publicly why it was selling: a more streamlined approach, more focus on its core markets, and partners to keep a multi-country offering in place.

I do not think that will be the last decision of its kind.

Focus is now worth more than footprint

For a long time, scale in recruitment meant a flag in as many countries as possible. That made sense when growth was easy. In tighter markets, the large groups are asking a harder question about each territory: is this where we want our management time and our capital? Sometimes the honest answer is no, even when the business itself is good.

Good businesses can still be non-core

That is the important point. The six we bought were not problem businesses. They had experienced local leaders, real teams and years of client relationships. They simply mattered more to a buyer that wanted to build around them than to a seller that wanted to concentrate elsewhere.

What a carve-out needs from a buyer

Buying part of a large group is different from buying from a founder. The business has to keep trading while it separates from systems, brands and contracts it has relied on for years. It needs a buyer that can move quickly, keep local leadership in place and protect the client relationships through the change. Tessero traded throughout and launched under its new name ten weeks after completion.

What happens next

I expect more groups to look hard at their portfolios over the next few years. Some will sell territories, some will sell specialist divisions, and some will look for partners to run markets they no longer want to own.

If you are making those decisions inside a larger group, we would like to talk. Quietly, and early.