In the South African business environment, new startups and small- to medium companies often struggle to compete with the large, dominant enterprises. Once established, they may find it difficult to access further capital and the resources needed to them to grow. Then there are the business functions that require the owner’s or CEO’s full attention: accounting, auditing, staffing etc. Wouldn’t you want to concentrate on what really matters – growing your business?
Enter Innovative Solutions Group (ISG). Founded by visionary entrepreneur Arnoux Maré, who understands the challenges of owning a business, ISG outsources such functions to facilitate the smooth running of a fledgling company – with trustworthy service providers who act as proxy, assuming the same level of responsibility and accountability as the company itself would. “A lot of people don’t understand how difficult business has become. In the old days, the owner of the company was the CEO, the marketing manager, the financial manager, the HR manager – but you can’t do that in today’s environment,” he told Tribe Business Magazine.
This is not a labour broking service. As Maré explained. “The difference between what we are doing and labour broking is quite easy to understand. Labour brokers’ staff are always temporary workers, often called a ‘limited duration contract’, even where employment contracts of policies refer to them as ‘permanent’. These temporary employees are deprived of their basic rights as workers in the sense that they can’t even apply for credit of a cellphone contract. So we changed the system.”
A new approach
A recent study by financial advisory firm Deloitte identifies outsourcing as a key enabler of economic growth and job creation. The outsourcing industry has elevated the economies of other emerging markets such as India and the Philippines.
“As an outsourcing company,” said Maré, “we employ more than 16 000 permanent staff over a variety of sectors including transport, mining, logistics, engineering, hospitality and agriculture. We don’t employ any temporary staff, therefore ensuring workplace stability and continued security for workers and their families.” By employing workers full-time, a company actually builds a relationship with these staff members – empowering them to work optimally and in positions that suit them best.
ISG receives around 8 000 CV’s a week and employs approximately 2 000 people a year. In 2017, the company employed a person for every working hour. Currently, ISG manages 30 companies in sectors such as mining, engineering, logistics, financial services, construction and agriculture, and is looking toward the entertainment sector in the near future. It has operations countrywide with offices in cities such as Cape Town, Durban, Port Elizabeth, Kuruman, Polokwane, Tzaneen, among others. Outside South Africa, it operates in the United States, New Zealand and Mozambique, and will soon be moving into Europe.
ISG’s Innovative Staffing Solutions subsidiary takes responsibility for the entire human resources function, which allows its clients to focus on their growth strategies and core competencies. “It’s important to note that legitimate outsourcing companies are not labour brokers or temporary employment services, but organisations where both the employees and the companies are protected,” Maré stressed.
“At Innovative Staffing Solutions, we contractually employ our clients’ staff on a permanent basis. This means we take over a client’s drivers, hospitality workers or farmworkers by reinstating them as permanent employees, but they continue to work for said client. In exchange, employees receive benefits they may not have received previously, while the client’s HR needs are handles, such as finding suitable staff and dealing with disciplinary issues.”
ISG’s other subsidiaries are: Innovative Accounting Solutions, which outsources financial and accounting processes; Innovative BEE Solutions, which assists companies to comply with Broad-Based-Black Economic Empowerment regulations and improve their Scorecard ratings; and Innovative PPE Solutions, which ensures personal protective equipment and clothing meet legal requirements and are of the highest quality.
Spirit of an innovator
In 2017 and 2018, Maré and ISG walked away with the laurels at the annual Africa Leadership Awards held in Mauritius. One of the awards lauded ISG as the “Dream Company to Work for in Africa”. The self-made millionaire grew his turnover from R32 million in 2013 to an astonishing R2 billion in 2019. Maré is proud to have created a new service that had never been heard of before. “Everyone knew what labour broking was, everyone knew what recruitment firms were, but what I was pitching to the market was something unheard of. I was telling companies to trust me with their most valuable asset, which is their people – which can also be their biggest liability, depending on how they’re managed. But nobody actually wanted to listen to me! Everybody told me I was doing it wrong, everybody said it was not the way to go, everybody said it was impossible because to them it didn’t make sense to employ people full-time.
“There were a lot of challenges, but I kind of like challenges. I like it when people say you can’t do it and I try to prove them wrong. I’m a firm believer that second place is really a politically correct term for the first loser. I don’t like being told that it’s impossible. People telling me it was impossible actually got me to push even harder,” he added.
Managing people “a science”
Innovative Staffing Solutions takes the headache of managing staff away from company owners because it’s a science to manage people, said Maré. “We’ve stopped managing work and started managing people. We manage the human resources while we let the company manage its core business, for example engineering. There are so many facets when it comes to running a business: there’s safety, payroll, human resources, sales, marketing, operations, but the people who do the operations are not the focus of the company – the operational excellence is their focus. Our focus are people excellence, so our operations are people.”
He continued, “It’s very important to understand the psyche of humans when working with them. If you have a disgruntled, unhappy employee, the production will be cut by at least 60%. However, if you have a happy employee who is proud of where he or she works, the production goes up, morale goes us up, everything works better. We can provide a better service for our clients at the end of the day, running the operations for them by managing the people correctly, while they manage production, marketing and all those things they need to take the business forward. We manage the people to ensure the actual business is done.”
Maré iterated that ISG’s employees are manager on a human level, not just on a work level. “ I’m a firm believer that you need to strike a delicate balance between the two, because if you manage you employee correctly and at the same time empower him to do his job to the best of his ability, it will be beneficial to both the worker and the company.”
Central to the company’s operations is the well-being of its most important asses: its human resources. ISG values its workforce to much that it has created systems and benefits for its employees that are second-to-none in the market.
“We’ve taken hands with a major medical aid company to assist all our employees, including more than 6 500 truck drivers, to enjoy better medical benefits at a fraction of the costs. This also allows lower-earning employees medical aid assistance.”
Asked whether ISG trains people internally, Maré said it depends on the type of training. Specialised training is outsourced, while the company does the rest in-house, such as with soft skills. “We also adapt our training to our clients’ needs. We need to build a person into a job, not a job into a person- and that’s the mistake many companies make.”
He added, however, that even though he’s a firm believer in education, people have to learn to think outside the box. Many people concentrate so much on studying that they start thinking inside the parameters of their studies, never looking for answers outside – and no business can be run like that.
“There’s no single degree, not even an MBA, that teaches you how to run a business. I concentrate on what I do best and outsource that which I can’t do best. A leader must be able to realise he can’t do everything, and work with a team who’s able to achieve the best results.”
ISG in action
ISG’s very first contract showcased the efficacy of the business model, and the client ended up marketing ISG to its own sister companies and business associates. Maré hasn’t looked back since.
Due to client confidentiality, he isn’t able to name any of ISG’s clients, but one success story deserves to be shared: “Pienaardam in Middelburg is made up of resorts, agricultural facilities and a few other elements. A few years ago, we took over their staff, which was very unionised and militant. We started handling the negotiations with the unions and, of course, because we speak the same language as the unions, we could assist the process – remember, we also understand the challenges the unions face. We took over about 200 employees, and to this day we still handle the account. We always look at it as creating a win-win situation four our client because if they’re operationally sound, so are we.” A sector that has proved difficult is transport. “It’s a very militant, very difficult market, riddles with a lot of industrial action,” Maré revealed. “But our clients don’t have to face these challenges. With our carefully executed systems, I’ve managed to bring down industrial action among our transport clients by 92% and operational costs by up to 60%, just by managing people correctly.