Carter Schwartz is an executive search boutique with a long-standing relationship in the independent healthcare and education ecosystems; it has one of the largest teams dedicated to C-suite level search in the sector. Operating out of offices in London, Bristol, Munich and New York, it offers clients a pan-European focus and a proposition for investors seeking leadership for cross-border roll-ups.
The company was formed in 2014 by Adam Carter, a healthcare industry stalwart since 1996. HMi caught up with Adam to learn how he goes about finding his clients the people they need.
The following transcript of HMi’s interview with Adam Carter has been edited for brevity and clarity.
HMi: How do you get your business?
Adam Carter: We’re fortunate in that we’ve been embedded in the market for 25 years and we’ve created a reputation as trusted advisors, as such, roughly 95% of mandates are repeat customers or referred. The latter is an important point as it’s about intermediaries validating our reputation – so that is the Big Four, prominent legal firms and leading commercial due diligence (CDD) companies.
These relationships are really important to us – they put their trust in us and we take that faith seriously.
HMi: How do you differentiate yourself from the competition?
AC: Knowledge, networks and process – that’s the USP. The first two elements are time served, again it’s about being embedded in a market and understanding what good looks like in the context of both people and systems. But our process is the ‘secret sauce’ – competitors try to copy it, but they always fall short because they don’t understand it and they miss the nuances.
But to truly understand how we differentiate you need to understand the recruitment landscape in the healthcare arena. Loosely speaking there are two recruitment models – contingent agents and retained search…. and we occupy the latter. Agents flood clients with CVs from their databases, often before they understand the client’s need; naturally they serve a purpose, but they only sell what’s on the database. Conversely search is about understanding your client’s challenges and addressing these through informed advice and a bespoke recruitment solution.
We also challenge our clients to be courageous and present solutions that go beyond the artificial borders set by contingent agents – so that’s sourcing talent from all markets and not just those intra-sectors.
HMi: Once the solution is accepted, how do you find the right candidate?
AC: This goes back to the point on ‘secret sauce’ – so you’ll appreciate if I go a little high level on this response.
Our process typically takes around six weeks. So, the mandate spends approximately four weeks in research – that’s two weeks in ID (identification) and two weeks in approach (pitching). Significant communication between research and client during this period is vital; nothing is assumed, and clients sign off multiple reports to ensure the correct direction of travel – target sectors, target companies and organisational structures. The final two weeks is all about candidate analysis with in-depth competency-based interviewing, getting under the skin of potential candidates.
While that’s a high-level whisk through our process, we’re obsessive about it, because ultimately at shortlist presentation we believe in ‘no surprises’.
HMi: Is there a dwindling pool of talent as the market gets busier?
AC: The market has always suffered with a dearth of talent, largely because the continued consolidation of the healthcare market has moved at such a pace that it has outstripped the capability of many in this space. In addition, this is partly due to the healthcare sector’s obsession with hiring talent from within the industry.
There’s a belief, rightly or wrongly, that because we operate in a heavily regulated environment that candidates can’t come from other sectors – not true!
And we work tirelessly to evidence the value add of hiring external market talent that bring a fresh insight to working practices.
I also blame the contingent recruiters in this space for perpetuating this perception. When all they have are CVs on a database, then there’s no incentive to meet the actual needs of the client. So, we see the same candidates moving around the sector like a merry-go-round, often poorly appointed to roles that are beyond them.
I’m not anti-sector, I’m just a realist. I’m all for succession and promotion from within, but that can also bring limitations. Those limitations stem from a lack of exposure to external influences – they only know what they know from their own market. It can be a real challenge to get clients to look further afield, but as I’ve said previously – ‘be courageous’.
HMi: What are the investors looking at?
AC: US investors are interesting – they want to deal with London because we speak the same language; but really, we’re a segway into mainland Europe as their focus tends to be cross border roll-ups.
From a mainland European perspective there are a number of investors trying to penetrate the UK ecosystem. With Brexit back on the agenda, accessing the UK through the Irish market seems to be an interesting strategy and certainly the concept is attracting a lot of attention.
We’ve had several inquiries in the last couple of weeks from investors on this very subject.
While the majority of our mandates are UK centric, the DACH region continues to have much Pharma activity for us, as does Spain – although the latter is more around care service provision for ex-pats.
HMi: In what sectors are you busiest now, and where do you see the market going?
AC: The specialist care and home healthcare markets remain active, and this has been so throughout the pandemic. Certainly, in the low/midcap space we’re seeing buy & build opportunities on a weekly basis. That said, price expectation from vendors is very high and for sure that’s alarming some investors.
Childrens’ services were very busy last year, particularly when the pandemic hit, but the Competitions and Markets Authority’s (CMA) investigation into investor activity in the market has caused a hiatus. That said, we’re still active in a number of surprisingly large transactions where investors are taking a bullish approach to market opportunity.
In the Pharma market we’re seeing a lot of interest in the advisory and supply space; so that’s anything from Medical Comms to Contract Development and Manufacturing Organisations (CDMOs) and Clinical Research (CROs). Although much of this activity is centred on the DACH region; so, our Munich office has been active here.
Digital has been a key focus for investors recently and we see this as a growing trend, particularly as the pandemic demonstrated the need to find more innovative ways to support people remotely. Certainly, we see digital and tech as the next big thing and unsurprisingly we’ve just added a new Practice Head to our own structure to maximise opportunities in this niche.
The challenge here is spotting the winners – the market is hugely innovative and very Venture Capital (VC) focused, so whilst many firms won’t make it, for others, the potential is huge. There are a lot of people with bright ideas but not all of them with the business acumen to grow the business. That’s where we come in and that’s where we’re adding resources. Our involvement in this niche is simple; it’s all about helping bright sparks monetising a great idea.
So, you can see we’re pretty active and as usual we play a critical role in the investment cycle.
It’s not unusual for us to be in a position where the investment committee won’t sign off unless we’ve identified the appropriate leadership team to deliver the exit.
HMi: How has Covid affected the business?
AC: With all that’s going on I’m actually embarrassed to say we’ve had our best ever year; but I can’t hide our success because the team deserve the plaudits for digging in so deep: revenues are up 35%, profitability is up by over 1,400% and our headcount doubled to meet increased demand.
Even operationally we were largely unaffected. We’re a global business from a candidate sourcing perspective and so video has been a large part of our process for a number of years, so the switch to virtual-only business was actually seamless for us. That said, our clients required more input; certainly, in terms of supporting decision making.
So, we had to go the extra mile with enhanced levels of psychometric testing and significantly deeper referencing; again, it’s all about reassurance.
From a new business perspective, when we went into the first lockdown everyone hit pause, largely because no one was sure how long the pandemic was going to last. Yet the retained nature of our business is such that we had a full workload already in tow and this allowed us to bridge the lull.
That said, once clients realised the longer-term nature of the pandemic, activity levels picked up considerably and by Q4 the number of transactions we were engaged in were ahead of activity pre-Covid.