It is an incongruous setting.

In a sparse garret room of a Georgian townhouse, furnished with nothing but two chairs and a white table, Lorna Conn is discussing CPL’s international expansion.

A climate protest is vibrating off the single-glazed windows of the recruitment firm’s Merrion Square headquarters and so we have scaled to the top of the building and are secreted at the back.

The space belies CPL’s new firepower from Outsourcing Inc, the Japanese conglomerate, that acquired it for €318 million in 2020 in an all-cash deal.

At €11.25 per share, the deal represented a 36 per cent premium to CPL’s contemporaneous share price.

Conn was announced as chief executive last Christmas and stepped into the shoes of Anne Heraty, CPL’s founder, a few weeks later. The succession is described as “natural” and “organic” by Conn, who originally joined the business as chief financial officer five years ago.

Heraty founded the company when she was 29 and floated it on the Irish Stock Exchange a decade later in 1999, earning the distinction of being the first Irish woman to take a company public.

The performance of recruitment companies is cyclical and tied to the general economy, and CPL has had several blows to the head. Starting life as a specialist in tech recruitment, it was heavily exposed when the dot com bubble burst at the turn of the century and when the financial crisis hit in 2008. 

But its lowest point came in April 2009, when the share price had dropped 80 per cent in less than two years. Heraty rebuilt the business, diversifying its offering and focusing on voluminous service provider contracts. Over the next decade the share price went up 965 per cent, to the point where Outsourcing came knocking. 

Heraty and her husband exited with €110 million for their combined 34.9 per cent stake and Conn was one of 30 executives to share in a €5.5 million windfall from the acquisition as a result of  an exclusive employee share option scheme.

CPL enabled executives to exercise their share options before the takeover was completed in January 2021, entitling them to shares worth €11.25 for an option price of €0.10. 

A year into the takeover and four months into Conn’s role, the attributes that will define the new era of CPL are now becoming visible. 

Currently operating in 12 countries, employing 15,000 people and serving 4,000 clients, geographic expansion is Conn’s watchword. 

“My ambition as CEO is to further our internationalisation strategy,” Conn begins.

“So we’ll do that through a mix of organic investments – we’ve already organically entered Switzerland and Bulgaria, for instance, they are two recent countries where we’ve established operations, and we’ll do some M&A as well. 

“We’re looking at the UK, Germany and the United States for that. A lot of our focus right now is evaluating how we can broaden our geographic footprint and in some key areas where we have operations already, we are deepening our presence.”

In a podcast interview for EY in December 2020, Heraty said the one regret she had was not trying to take CPL global sooner. Conn will likely have her own regrets in years to come, but attempting an aggressive overseas expansion will not be one of them.

One advantage of being inside Outsourcing Inc is the possibility of leveraging the Japanese company’s operations in over 40 countries and across six continents, to further CPL’s own “geographic bandwidth,” as Conn phrases it. 

“They are ambitious, and they are very ambitious on our behalf,” Conn said.

“Their organisation is pretty autonomous in style. We plug into them in terms of finance and reporting, but otherwise, it’s very much a decentralised model.

“It certainly empowers me as CEO to drive the organisation to feel boundaryless in my vision.”

*****

CPL’s specialism is recruiting for temporary positions with multinationals based in Ireland. 

It makes 75 per cent of its fees from filling temporary jobs, and 25 per cent filling permanent ones. 79 per cent of its revenue is booked in Ireland, although 50 per cent of the jobs it fills are outside of Ireland. 

Recruitment companies tend to do well when the economy is in good health and face leaner times when there is a downturn. Outsourcing Inc’s share price is down around 16 per cent since the beginning of the year. This is broadly in keeping with other publicly listed recruitment companies, as the labour market continues to be choppy in a post-Covid environment.

Conn won’t speak to the health of the parent company, but only to CPL’s own business, which she says is resilient and has continued to be so through the pandemic. 

This is in part to the strength of CPL’s “flexible talent” portion of its business which has been beefed up in recent years. 

“Because organisations may still have needed talent during the pandemic but they weren’t feeling confident enough to invest in permanent roles, they came to us looking for contract roles or temporary staff,” she said.

“We have large numbers of managed service provider contracts, or POS, which is recruitment, processing, and traditional outsourcing of services with clients. So it’s longer contract, tenure, and it is larger-volume recruitment.

“We have found during a recession, which the pandemic period was akin to, you can find a swing from the permanent placement side of the business, which is only about 25 per cent of our business, to the flexible talent side of our business, where companies are looking for a bit more flexibility in terms of their recruitment or in their talent needs.”

CPL Healthcare also “partnered” with the HSE during the height of the pandemic to provide temporary staff for Covid activity, from call centres to nursing home staff. 

As those contracts wind down and the economy enters a living-with-Covid phase, there are more permanent shifts in working culture that Conn can see from her vantage point. 

Flexibility in working hours and location are no longer deemed to be a perk, or a point of negotiation by employees, but rather an expectation. 

“I would say that there will be more and more people, particularly in the professional space, who will be more open to to working for themselves or working more flexibly, on temporary assignments or establishing themselves as their own limited liability company, and going out and working on a contract basis with different organisations,” she said.

This is also coinciding with a global shift over the past few years to more people working on a freelance or on a contract or temporary basis, a shift that CPL has gained from. 

Recruiting for Facebook – a touchy subject

When Heraty started Computer Placement Ltd in 1989, she started it as a specialist tech recruitment firm and initially it was just her, a desk, a phone and a bet on herself.

And while the magnitude and variety of what CPL does has increased exponentially since then, the tech sector it is still a reliable and highly lucrative part of its base.

CPL has been working with Facebook since 2010 and part of this work is to to employ content moderators for the social media platform. Conn indicated prior to the interview that she was not prepared to discuss Facebook and, when asked during the interview whether continuing to do the work for them is worth the potential reputational  damage, Conn declined to answer the question

At present CPL Solutions Ltd  is co-defendant in at least nine High Court actions by individuals who are claiming damages for serious psychological injuries incurred as a result of the content moderating work. 

The plaintiffs are alleging CPL and Facebook failed to have reasonable regard to their safety, or to take reasonable care for their physical and mental health and wellbeing, and exposed them to risk, danger and/or injury, in legal documents seen by The Currency.

The cases are ongoing, and Conn won’t comment. In the aforementioned EY podcast, however, Heraty said she was convinced, as were her team, that the work CPL was doing for Facebook was helping to keep the social network safe. 

“It does require human eyes on a lot of the content because you are working across many different cultures and many different nuances, so it is important work and it’s about keeping the platform safe,” Heraty said.

The battle for talent

One of the dominant narratives in the post-Covid economic recovery is the ongoing battle for talent. In Ireland, the market is particularly hot because so many of the major multinationals have their European headquarters here. 

Companies are offering candidates lucrative signing bonuses, paid holidays to consider an offer, and unlimited holidays once they accept an offer – and on and on and on. 

For Conn, the perks and salaries in the tech and life sciences sectors seem to be in particular overdrive, but while big pay packets and add-ons seem flush now, their longevity is not guaranteed. 

“If the candidate doesn’t perform relative to the package that they’ve been awarded, I think that that candidate is vulnerable over time,” she said.

“So I think, when you get through a very tight, or a period of tightness in the labour market, and  things stabilises, the packages that look out of kilter, or look overly generous  start coming under the spotlight of organisations. 

“This will solve itself naturally over time through attrition.”

“Certainly, in my mind, I was preparing for the succession.”

Lorna Conn

For most of Conn’s career, she has worked in finance director roles, training initially with Deloitte as an accountant before moving into a managerial role there, and then into NTR PLC, where she worked as chief financial officer in several companies, including Greenstar Recycling and Wind Capital Group.

After two years as the Finance Director of ISS Ireland Ltd, a global provider of facility services, she joined CPL as chief financial officer in 2017. 

And while the possibility of her succeeding Heraty wasn’t floated until later, she says she evolved into the chief executive role over time.

“Certainly, in my mind, I was preparing for the succession. So I had, you know, a period of time where I could at least prepare it in my head for what type of CEO I might be,” she said.

“Anne saw something in me. She and I share a lot of common qualities and traits. And I think she knew how passionate I was about CPL, about our mission and about our people. 

“When it came to a point when it was the right time for Anne to decide to step down, I was there beside her and people could see how aligned we were.”

Conn is now figuring out what kind of CEO she is going to be, how to use her voice to speak with relevance to the thousands of employees in varying circumstances and understanding the new responsibilities she has as a leader to take a stand on behalf of her company, which she recently did condemning the Russian invasion of Ukraine. 

“We don’t have any business with any Russian companies to the best of my knowledge, and we don’t have any operations in Russia,” she said.,

“But much more importantly, on a more humanitarian level, as an organisation, we’re absolutely appalled by the invasion into Ukraine

“It has really impacted our people. We have offices that are on the border of Ukraine, Slovakia, the Czech Republic, Poland, and our people out there are extremely shaken by what has happened.

“I think it was very important to go out with a public message that we ultimately unequivocally condemned the invasion by Russia into Ukraine. 

“I found, certainly as a CEO and as an executive team, we’ve just had to be really conscious about how people are feeling right now. Making sure that we have an opportunity as an organisation to share our dismay and our sadness, and to do what we can to help support those who have been so impacted by the war.“