Transforming recruitment across Europe with YER

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Audio Transcript

Tim Smallbone

Hello and welcome to Inflexion Point, the podcast that explores those crucial moments in a company's journey that change the trajectory of success. Through conversations with business founders and entrepreneurs, we'll explore what those moments look like and how to recognise and harness them. We're recording today's episode in Amsterdam, the home of our portfolio company, YER, a European specialist recruitment agency. YER was set up in 1987, when taking out full-page ads in newspapers for job openings was the way forward. Today, as a talent platform driven by data, it connects ambitious students, professionals, managers and executives with employers.

Johan Overgaauw

If you want to reach your goals, then it's always really important to know exactly where your strengths are, of course, but also where your weaknesses are.

Sander Ruijter

YER has had this amazing success story and there's every reason to be proud, but this willingness to learn is really something that for me sets YER apart.

Tim Smallbone

I'm Tim Smallbone and in my 20 years as a partner at Inflexion, I've been lucky enough to witness a huge number of those moments that are a part of every success story. Johan Overgaauw joined in 2011 and worked his way up to CEO by 2022. Recent growth has seen YER expand into new markets, and it now has a workforce of almost 4000, with activities across the Netherlands, Germany, Belgium and the US. Inflexion made a minority investment into the business in 2023, allowing the YER shareholders to retain control whilst benefiting from Inflexion's sector knowledge and M&A experience. Johan joins us in the studio and we're also joined by the head of Inflexion's Benelux office, Sander Ruijter, who led our investment in the business. Welcome to you both, thanks for joining me, exciting to be here in Amsterdam. Johan, why don't you introduce yourself first of all and tell me a little bit about your background before you came to YER?

Johan Overgaauw

Yeah, of course. Tim, thank you very much. First of all I have almost 20 years of experience in the staffing industry. I started my career at one of the competitors of YER, it's named Mandag. I started there in 2006, and started there as a consultant and grew over 6 years into a senior management position, and then after that, I got in contact with Jaap Kooijman, the founder of YER and one of the shareholders today. And I will never forget my first conversation with Jaap Kooijman. It was, I think, a conversation of two hours, I felt directly the entrepreneurship of him, the winning mentality. From day one, I had really intensive contact with Jaap on a daily basis, and I think that was one of the reasons that Jaap asked me in 2016 to become the managing director of the Netherlands. I'm responsible for our business in the Netherlands. Later on, Inflexion stepped in as an investor and from that moment, I'm CEO of the company and responsible for all our activities. So that's, in short, my career within YER.

Tim Smallbone

So you were a professional manager and you were looking for something else. It was Jaap's, the founder, Jaap founded the business, it was his energy, something about him attracted you to the business.

Johan Overgaauw

His energy, his way of thinking, but also his entrepreneurship. At that moment, YER was in quite a difficult situation. In 2007, YER was the market leader, then, of course, the financial crisis hit, and the consequence of that was that the period was quite hard for YER. 50% of our clients at that moment were banking and insurance companies.

Tim Smallbone

So you were really badly hit.

Johan Overgaau

Yeah, we were really badly hit. And that was, for Jaap also the moment to decide after the financial crisis to transform his complete business model.

Tim Smallbone

That experience encouraged the change to the secondment model.

Johan Overgaauw

Yes, and that was, I think, a game changer.

Tim Smallbone

Just help me understand, what does it mean, this secondment model, rather than a pure recruitment model?

Johan Overgaauw

In a conventional recruitment model, there is a vacancy and we find the right candidate. And that then is, of course, the transaction, and we were quite successful in that, and when you look to a secondment model, and we chose directly to focus on engineering profiles. So profiles which are really difficult to find. You have to explain to him what the job is, you have to pay him or her on a monthly basis, you have to take the risk if the job is ending earlier that you can replace this candidate. So the situation is a complete different one, but it was indeed a big change for us.

Tim Smallbone

I can see the attraction to the graduates, to the young people. They come in, they get trained, and they get a job, which is otherwise difficult to get. Just tell me about the specific attractions of this model to the end client.

Johan Overgaauw

If you look at the client side, there is a lot of scarcity. And that scarcity is there and will grow in the coming 5 to 10 years. That is what all clients are saying and what we are aware of. But if you can deliver a young academic, which is really ambitious, which is coming out of school and chooses 100% for your company, then for your end client, you are offering a real solution.

Tim Smallbone

And Sander, just turning to you, opened the office for Inflexion.

Sander Ruijter

December 2020, yeah.

Tim Smallbone

Just tell me how you came into contact with Johan and Jaap.

Sander Ruijter

So as Inflexion, we're focused on high-growth businesses that are very successful. And if you look at YER in the secondment space that we were just talking about, YER has organically completely outgrown all the competition in the Dutch market over sort of a 10-year trajectory. A very impressive achievement. And we have been admiring that performance from a distance. And of course, we were very keen to get to know Jaap, to get to know Johan. And therefore, in the first instance, it was us sort of reaching out to Jaap, saying, can we have a conversation, because we're really impressed by what you've been doing so far, organically growing your business in the Dutch market.

Tim Smallbone

Recruitment is not an obvious place for Inflexion to invest because of its cyclicality.

Sander Ruijter

Absolutely. But to Johan's point, it's not a permanent recruitment model. And we have a lot of experience through successful businesses like FDM, Calco, Sparta, and actually there are many similarities between the model of YER and those businesses that we understand very well. And therefore, we felt, and we're seeing it actually that this model is a lot less cyclical than your typical recruitment business.

Tim Smallbone

And this model, track, train, deploy, as you describe it, this was completely new.

Johan Overgaauw

I don't think that it was completely new, but at the other hand, the way I think we do it and we believe in it is completely new in the market, let's give an example in our traineeships. What we see within our clients is, of course, that it's really difficult to find highly educated people who are at the start of their career, of course. And what we discover and what we also developed is a specific program where candidates have hard skill development, but also soft skill development, and also get support from our psychologists. And within that program, 97% of these candidates sign a contract within one of our clients. This is a real example of bringing added value, not only to your clients, but also, of course, to your candidates.

Tim Smallbone

I hadn't appreciated that. You train people in specific skills, and there are soft skills as well. What do you mean by that? Just being in the business environment.

Johan Overgaauw

Yeah, we are in contact, of course, with a lot of engineers and IT specialists, and they love their job, of course, but sometimes they need to improve their competence in how you can work together in a group within your company, or what is the best way to communicate with people around you, and that kinds of competencies are really important if you look in more technical environments.

Tim Smallbone

It's a really big change to go from a permanent recruitment business, which was recruiting CEOs and managers, now just focused on graduates, training them, it's a whole shift in business model.

Johan Overgaauw

Yeah, it's a whole shift in business model, and of course, besides traineeships, we also do the normal junior, medior and senior profiles within our clients. But I think there are in that journey in the last 10 years, besides the change, also some moments which are really critical in what we achieved. For example, in 2016, we had 700 people working for us on a daily basis, within our clients, so we made our first 700 step. Then you could say, okay, if we look further and we put a dot on the horizon, then it could be interesting to reach the 1,000 or 1,500. Then it's typically YER to say, yeah, we are really ambitious, so we want to reach 2,000 candidates working for us within our clients in 2020, and at that moment, people were looking at us saying, yeah, you are crazy, you will never succeed, but we succeeded because we reached that number already in 2019, and I think that is a really important part in our growth story, that if you believe in reaching your goals, and you can explain that in a natural way to your people, and you bring them with you in that adventure, then you can achieve it, of course.

Tim Smallbone

So you had the vision?

Johan Overgaauw

Yeah.

Tim Smallbone

People didn't believe you, but you communicated it.

Johan Overgaauw

Yes.

Tim Smallbone

You said, we're going to do it.

Johan Overgaauw

Yes.

Tim Smallbone

And you did it.

Johan Overgaauw

And we did it.

Tim Smallbone

And presumably this was a big reason, Sander, why and you talked to the extraordinary growth was driven by the leadership of the business.

Sander Ruijter

Absolutely. When I was speaking to Jaap and Johan and they spoke about their equal ambitions to internationalise the business, but also a realisation that if we want to reach that goal, we probably need to do that via acquisitions, and what I was really impressed about, this highly successful company realised this is something that we've not done before, so if we want to succeed on this path of our next growth journey, then we need to get that skill set on board from someone externally. And that's sort of really how our discussion started to get traction. How can we as a shareholder help YER grow internationally via acquisitions?

Tim Smallbone

And was that the reason you took Inflexion on as a fellow investor — to expand beyond the Netherlands?

Johan Overgaauw

Yes. If you want to reach your goals as an entrepreneur or as a senior manager or in your company, then it's always really important to know exactly where your strengths are, of course, but also where your weaknesses are. And we knew at that moment that one of our weaknesses was that we never did an M&A process. I was not aware of words like SPA or W&I insurance or leakage. And that combined with the contacts that we had at that moment with Sander and of course the way he presented Inflexion to us, but also brings specific added value to the table with cases, and of course his personality, brings us to the decision to bring Inflexion also in our shareholder structure, because Inflexion was and still is really able to guide us in what we want to achieve in our international growth story.

Tim Smallbone

And we've done two substantial acquisitions in Germany.

Sander Ruijter

Absolutely. And so we did those two acquisitions, or Johan did them in 2024.

Johan Overgaauw

No, we did them together.

Sander Ruijter

We did them together. And the first year was really a year of sort of building up the capability, so we hired a German non-executive director onto the team whose been really helpful in getting traction in the market and showing that we were really committed, we started to have our first discussions. But I remember quite well, December 2023, we were having our Christmas lunch, and yes, we had really planted many seeds, but actually we were a little bit disappointed that it wasn't going as quickly as we anticipated. And then in Q1 of 2024, the green shoots of those seeds started to come through. And we first made the acquisition of Staff Experts and soon thereafter Avantgarde Experts. And then you really see that hard work is paying off in the way that Johan is describing. If you believe in your strategy and you're going for full execution, then you will get success.

Tim Smallbone

So Johan, how did you attract people to sell the business to you? What's the secret sauce that you sell to a seller to come to you?

Johan Overgaauw

Do you have some minutes? I think if you want to be successful in M&A, then you need to have 100% focus. And during my summer break in 2023, when I was on the beach or walking or walking with my dog, then I was thinking, okay, I'm always telling my colleagues that they need to have focus, but where is my focus? Because I need to internationalise our company, but I also need to have 100% focus on our Dutch activities. So after summer break, I had contact with Jaap and also with Sander. And I said to them, I think that we need to find a new managing director for our Dutch activities, which means that I can free myself 100% for M&A, and then we got in contact with Staff Experts and later on with Avantgarde Experts. And I think one of the ingredients is really important that you need to take the time to understand their business model, to see the similarities between our business model and the business model in Germany. Of course, there are similarities, but there are also differences. If they listen to you, one hour, a first meeting, a second lunch, a dinner, go to a football match, whatever — then after some meetings, they get the feeling: hey, you understand what we are doing. You are an expert in this specific business case. You also understand that if you want to grow, you first have to invest. That's logical. That's also what we did in the Netherlands when we hired in 2013 and 2014 100 new colleagues from our competitors, and that's an investment. And I think these kind of, i think examples, to company owners — in this case in Germany, but later on also in France, I think convince them that you are the right party of course together to make the future growth. One other example I think is interesting to mention, and that was also for me a learning curve, of course. We were in process with Staff Experts. There was one other competitor in the playing field, also a Dutch party, but that specific Dutch party was already represented in Germany. So the owner of Staff Experts called me on Friday and he said to me, yeah, I have some doubts about YER, and your story is fantastic, probably a little bit too good to be true. And the other party is already in Germany, that gives me trust and a good feeling. And Sander said, yeah, if we have a case like this in our company or in one of our invested companies, then my advice would be: take your car, go to this specific person, think about your relevant arguments, and then make the next step in that process. And that is the way, of course, that you can convince people. You have to play to win. It's not a game, but you have to show them that you, together with them, want to build an incredible future. That's what you have to show.

Tim Smallbone

Your emotional reaction was one thing.

Johan Overgaauw

Yeah.

Tim Smallbone

But by getting in the car, going and actually spending time with the individuals, you were then able to not just say you wanted a partnership — you actually demonstrated it.

Johan Overgaauw

Yes. And I think that is the difference between us and a lot of other parties. We are not saying it only, but we also show it to them.

Tim Smallbone

To achieve this huge inflexion point of going into a new territory, taking this model of yours into a new territory, those culture barriers actually are real. So presumably you had to sell that partnership at a very personal level.

Johan Overgaauw

I think first of all, there are some misunderstandings about cultural differences. If you are aware of that and you speak about these topics openly with the management team in Germany, and we did it, okay, this is who we are, this is who you are, we can complain about it, but let's find the best world of both. And I think if you look that way to cultural differences, then you can learn things, and we can also learn things from out of Germany, which we are using in our company.

Tim Smallbone

To help your own business improve.

Johan Overgaauw

Exactly, so I see cultural differences as a chance instead of a threat.

Sander Ruijter

YER has had this amazing success story, and there's every reason to be proud, as Jaap is and Johan is, and there's a lot of ambition. But this willingness to learn is really something that for me sets YER apart. When you've done better than the market, you can think, well, we're doing it in the best possible way. And I think that willingness to learn and that vulnerability really opens up people to YER because they feel that there's also a place for them within the company rather than it's all about they are imposing their best practice on a business that comes on board.

Tim Smallbone

And that's true that we don't know best. Let's learn best together.

Sander Ruijter

Exactly. And I think that's very impressive. And that continues to today. And I mean, if you look at where YER currently is in terms of an M&A capability versus when we started our partnership, there was no experience. And now Johan and Michel, the CFO, and a broader team within YER are really leading this day-to-day. And when it comes to the German activities, as Inflexion, we now have a much more passive role because that has really found a foundation that YER can now drive itself.

Tim Smallbone

Sander an interesting opportunity for us at Inflexion because YER was looking for a minority investor. How did you manage to match us with them?

Sander Ruijter

I don't even think they were looking for a minority investor. And that's what the great thing is about sort of us being able to take minority stakes, because we're not asking you to sell your company. We're willing to come on board as a minority investor. We don't need to have control, but we do think we can help you with a certain part of your strategy, which is about internationalisation. But it was really important to get across to Jaap and subsequently also to Johan that we wouldn't be becoming a controlling investor driving day-to-day decisions in the Dutch market, which they know so well, but that we were there for a purpose and that we were willing to stick to that part of value add.

Tim Smallbone

And Johan, when you have a private equity investor, does that change the dynamic when you're talking to people who are looking to sell the business to you?

Johan Overgaauw

Sometimes there are negative ideas about private equity investors. And from my perspective, that's completely wrong, because in our situation, I can say that without Inflexion on board, as an investor, we will never be able to do our acquisitions in the German market, because they bring that specific knowledge to us, which we wouldn't have had at that moment. So for me, it's only positive to have a partner who is, of course, critical in a positive way, who looks from another point or another angle of experience to the future. And then, of course, which have a sparring partner who can give you advice, but also sometimes critical to the choices you made.

Tim Smallbone

A partnership, a bit of fun. And Sander, what else have we done to work with YER?

Sander Ruijter

What we have tried to sort of get across is that it's really good to sort of get experienced people on board. There wasn't previously a supervisory board or an advisory board at YER and we introduced Andreas in Germany. He used to lead Adecco in Germany and Austria as CEO. And it's really good to have a local representative close to your organisation so that you can really assess these cultural differences. But I think our value add on the M&A strategy is becoming a bit more limited. And I'm actually quite proud of that because they can do it themselves.

Tim Smallbone

Embedded it within the company itself.

Sander Ruijter

Exactly.

Tim Smallbone

Where's the vision now? You've taken the business to a leadership position in Holland. You're now growing in Germany. What's next?

Johan Overgaauw

What's next in Germany? We have, I think, a really good value creation plan. But besides that, we have a lot of opportunities for all our colleagues in the German company, which means that we are also able to grow our sales force in Germany in the existing situation. We also want to grow in the competence of IT in Germany. If you look at the two acquisitions that we did in Germany, then its mainly focused on engineering profiles in mobility and energy, which are interesting areas to invest in the coming years. And what we did during the period from September to December is to take a really deep dive into the European markets to see what could be a next interesting geography after Germany. And the conclusion was that we want to invest in our next geography, which will be France. We see a lot of similarities in between the markets in Germany, France, but also the Netherlands. After Germany, France is the second economy in Europe. So it's a really huge market. And at our yearly meeting with all our internal colleagues, I promised on stage that we will enter the French market.

Tim Smallbone

You're committed.

Johan Overgaauw

Yeah, of course. And that's also, I think, one of the secrets. If you promise to your whole company that you will succeed in one of your goals, you have to succeed because you promised it to everybody.

Tim Smallbone

So no shortage of ambition. We're going to continue to grow in Holland, and we're going to grow IT in Germany.

Johan Overgaauw

Yes.

Tim Smallbone

And presumably as you enter France, you're able to point to the fact that you've already taken a step in one country, and use that experience as a referral process for people who are looking to sell the business.

Johan Overgaauw

If you compare the current situation with the situation we were in at the beginning of 2024, then for a party which you want to acquire, we were more or less a Dutch company. Of course, we are also in Belgium and also in United States, but at that moment, 90% of the revenue came out of the Netherlands. So for an outsider, you are a Dutch company. But nowadays, and that is also what is really interesting, if we are speaking with advisors, but also with experts in the market, then they see that it's not only a story, but we also succeed in the German market. And last week, I had a conversation with a former C-level guy of one of the biggest players in the France market, and they had tried for the last five years to enter the German market without any success. So what he said directly was, you were able to enter the German market. So yeah, what is your secret? What is the story? I hope you didn't tell him. No, but to mention that it's not easier today, but we have more best practices to share on this specific theme.

Tim Smallbone

Yeah, and it's been an amazing story, a fascinating story of how you've developed the business, come up with new ideas, and led from the front. That's it for this episode. My thanks to Johan and Sander for joining me. Remember to subscribe to Inflexion Point wherever you get your podcasts so you don't miss an episode. And of course, you can check out our previous instalments too, including a discussion with the Inflexion founders and their story. Thanks for listening.

About the episode

Inflexion Point tells the story of YER, the Dutch specialist recruitment and secondment business, and how it set out to take a model honed at home into new European markets. Host Tim Smallbone is joined by chief executive Johan Overgaauw, who joined YER in 2011 and became CEO in 2022, and Sander Ruijter, the head of Inflexion's Benelux office who led the 2023 minority investment. They reflect on the moments that shaped it: the shift from permanent recruitment to a track, train and deploy secondment model after the financial crisis, the ambitious targets the team set and beat, the decision to internationalise through acquisition despite never having done a deal, and the two German acquisitions that followed. Along the way, they talk about winning businesses through trust rather than outbidding, treating cultural difference as an opportunity, the value of a minority partner who backs your strategy without taking control, and the next step into France.