SUCCESSFUL ENTREPRENEUR RAKES IN OVER R600-MILLION TURNOVER

Innovative Solutions Group™ takes the market by storm

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South Africa’s economy owes a lot to those businessmen and entrepreneurs whose success has spurred job creation and skills development. One such individual is Arnoux Maré who, in six years, has grown his R500 start-up into an empire with a R600-million turnover.

Maré, the Chief Executive Officer of Innovative Solutions Group™, is no ordinary businessman. He began his company from his lounge with a mere R500 in his pocket. Today, Innovative Solutions Group™ has 17 subsidiaries across a number of sectors with offices and over 7,500 staff across the country.

In 2011, Maré—armed with nothing more than an unequivocal belief in his own capability as a labour relations expert – left the corporate world to establish himself as a human resources consultant in Middelburg, Mpumalanga. He had no running capital to finance his new business and his first retainer netted him a meagre R780 a month.

What he did have though, was a dream—to turn his vision of a successful, growing business into reality and in so doing, actively create scores of jobs. He also had a “Can Do” attitude and an aptitude for hard work and strategic thinking.

Maré forged ahead and was soon consulting for clients and dealing with human resources cases that had been taken to the Commission for Conciliation, Mediation and Arbitration (CCMA). “Business quickly started to pick up so much that I decided to take a risk and hire an employee to assist me,” he says.

After about a year, he was providing consulting services to companies in the areas of fair labour practices, labour legislation and industrial relations.

“I was aggressive in my approach, assuring my clients that if I lost the case, my company would pay the penalty or settlement. This was a huge business risk because no matter how strong a case was, anything could have happened,” says Maré.

Innovative Staffing Solutions

Ultimately, the sheer volume of mediation and CCMA cases he was handling for clients is what led to the birth of the fledgling company’s first subsidiary—Innovative Staffing Solutions—in 2013. Maré says he realised that the only way to mitigate his clients’ labour risk was to bear it himself by employing the workforce needed by a client on a full-time basis and placing appropriately-skilled Innovative Staffing Solutions employees on contract with a client.

Innovative Staffing Solutions is therefore not a labour broker or temporary employment service. Instead it assumes the responsibility and accountability for clients’ labour needs.

“Labour brokers sell people as a commodity. This is not what we do,” states Maré. He explains that South Africa, as a middle-income country, has an abundance of low- and semi-skilled workers, who can sometimes be challenging to manage.

Skilled workers and those in managerial positions, on the other hand, are in high demand, short supply and expensive to retain.

“Staffing a business can be time-consuming, taxing and demanding. Management should be focused on their company’s core competencies, not on labour issues, and this is where Innovative Staffing Solutions fills the gap with leading human resource and industrial relations expertise,” says Maré.

“We currently have over 7,500 employees on contract with our clients, which include large, medium and small businesses, and this number continues to grow,” confirms Maré.

Despite the huge number of people in its employ, Innovative Staffing Solutions has not experienced a single incident of labour unrest in its years of operation.

“Knowing that their workforce is well taken care of, is trained and productive, enables our clients to focus on their core business capabilities and grow their businesses. Outsourcing their staff to us also reduces their business risk, in terms of industrial action, and enables them to spend capital funds on their business, product or customers,” says Maré.

In addition, management and other key resources can focus on strategic business functions instead of day-to-day staffing duties. “Our staffing solutions are designed to simplify systems and lessen our clients’ workload, allowing them to focus on what they do best, while we focus on our core capability—their staffing needs.”

Filling a gap in the market

Maré’s idea for Innovative Staffing Solutions took shape after tirelessly researching labour legislation and its shortfalls until he was able to identify gaps in the market.

“This exercise showed me how labour brokers operate and how legislation in turn allows them to create an unstable work environment, with no guaranteed future for their clients and employees. We changed this entire process to protect our clients and employees, while playing open cards and ensuring good labour relations with unions and bargaining councils,” says Maré.

“Our first client was experiencing weekly issues with his employees for a variety of reasons. Initially sceptical, the company agreed to outsource 30 of its drivers to us on a two-month trial basis. As Innovative Staffing Solutions stepped up to the plate, the improvements were immediate and far-reaching. The employees were now part of a company that was interested in their issues, that listened to their issues and actively engaged with them on a daily basis, also ensuring career growth opportunities for these employees.

“After the two-month trial period, we had such an impact on daily operations that the company outsourced the rest of its staff to us, including their staff in the manufacturing, engineering and retail sectors. Within the next few months we were asked to outsource the staff at its Komatiepoort branch and later, we were asked to open offices in Bloemfontein to better assist with the client’s operations around the country.”

From 2013 to 2015, Innovative Staffing Solutions did not actively market its services. As the company’s reputation matured, business grew by word of mouth and from mid-2014 to the beginning of 2015, business began to boom.

One of the clients that Maré is proud to have on board is Izusa Carriers. “The company had experienced ongoing disputes with its employees and had to negotiate with a highly militant union, which further impeded day-to-day operations. Izusa Carriers outsourced all of its staff to us and we engaged in discussions with the employees and union. Through our negotiations, the union came to realise the tangible benefits to their members of being outsourced to us and readily agreed to our terms.”

Since taking over the site approximately 18 months ago, there have been no serious industrial issues and not a single serious accident involving any of the drivers.

“Numerous clients have experienced significant increases to their fleet sizes due to more efficient systems, more productive workforce and little to no industrial action.” says Maré.

“After these early successes, word began to spread and we signed up more clients—both big and small companies—and in the first quarter of 2015 we went from a no-name brand to one that is well-known in the transport industry,” says Maré.

Business is a science

The way successful businesses operate has changed significantly over the years and, according to Maré, running a successful business is somewhat of a science and an art.

“Entrepreneurs need to concentrate on building and growing their businesses into sustainable entities and to lessen the time spent in the back office dealing with non-core operational issues. They need to implement efficient systems and establish the right balance, and this is where Innovative Staffing Solutions has much value to add. Our clients know that they can concentrate on their fundamental business operations while their workforce is being properly managed and carefully selected, ensuring that employees are happy and hardworking,” says Maré. “We make certain that our contract managers are properly trained in the intricacies of the specific industries they manage. This ensures that they understand the day-to-day challenges experienced in their relevant industries and as such, can assist our clients in improving their systems and operations.”

Maré was onto a winning formula, evidenced by the fact that Maré’s company has never faced serious industrial relations disputes or had to retrench a single employee.

“In the event that an employee makes a mistake, we ensure that the case is thoroughly investigated and dealt with fairly in terms of labour legislation. In fact, during the national transport strike our drivers continued to drive, knowing that we would treat them fairly based on the outcome of the negotiation process the Bargaining Council was involved in. We went above and beyond the call of duty to ensure the safety of all our drivers by arranging safe transport from their homes to their various sites of employment. By treating employees justly and ensuring that their rights are not infringed upon, we have been fortunate enough to have never had a strike,” he confirms.

Innovative Accounting Solutions

Innovative Staffing Solutions was just the beginning of Maré’s burgeoning empire. Following the success of this subsidiary, he realised that his clients were in need of additional complimentary services.

Maré explains that all his business entities are interlinked. For example, employing a large workforce increases the cost of book-keeping and auditing costs. As a solution, Maré bought an auditing firm, which led to the birth of Innovative Accounting Solutions.

“With the launch of Innovative Accounting Solutions we effectively solved two problems for our clients – the handling of their workforce combined with a financial management solution. This helps them maintain their focus on growing their businesses, rather than dealing with the associated challenges,” says Maré.

Innovative Accounting Solutions offers a range of taxation, accounting, auditing and administrative services, either on a consulting or full-outsource basis. Its primary purpose is to drive efficiency in its clients’ businesses, by relieving them of the administrative functions that do not form part of their core activities.

“To date, Innovative Accounting Solutions has successfully assisted its clients to obtain R82-million in financing through various banks. By researching the methods used by financial institutions to calculate risk factors when assessing credit, we’ve been able to assist our clients to obtain easier, more cost-effective financing.”

“All the companies within the Innovative Solutions Group™ are headed up by dynamic business leaders in their own fields,” he adds.

In-depth investigation into the tax-laws inherent to different industries and better appraising its clients with that knowledge, has allowed Innovative Accounting Solutions to save its clients over R10 million in tax over the last 12 months. “As a general rule, companies should look for a new tax practitioner every three years, and if they find a better-suited practitioner, they should appoint them. A company needs to find a partner who understands their industry and who will ensure maximum tax benefits instead of just appointing a service provider. Innovative Accounting Solutions prides itself on remaining abreast of SARS regulations and tax legislation. We assist clients develop better benchmark and baseline financial processes to help their company meet all of its governance requirements,” says Maré.

He explains that simplifying and standardising finance and accounting processes is a key characteristic of well-run companies.

Innovative BEE Solutions

The launch of Innovative BEE Solutions was Maré’s next milestone.

“We understood the importance of BEE and invited many service providers to assist us in becoming more compliant. During the course of our search we found a company that really stood out because its methods were both progressive and in line with our personal business practices. Having experienced first-hand the company’s proficiency in this sphere, we negotiated and bought it out to form part of our group of companies,” he says.

This subsidiary assists clients with BEE compliance and regulations, whilst simultaneously enhancing its business efficiency through improved scorecard ratings.

“The company educates clients on how to affordably integrate BEE policies, social responsibility initiatives and enterprise development into their strategic vision and operations,” says Maré. “Our objective is to encourage sustainable business growth and social development among companies which strive for an improved rating, and which regard BEE processes as an important economic objective for South Africa.”

Whilst BEE is an unavoidable and necessary practice of business compliance in South Africa, Innovative BEE Solutions can guarantee that its clients get the best possible value from going through the inevitable processes and expenses associated with complying with BEE regulations.

“Many of our clients have been awarded tenders and contracts because we assisted them in improving their BEE rating in cost-effective and operationally friendly ways,” continues Maré. “With South Africa’s ever-changing economic environment, BEE has become so sophisticated and complex that it requires specialist skills. The complexity of the new BEE codes makes it almost impossible for most small to medium businesses to organise their scorecard returns and implement the strategy if they do not consult specialists in the field.”

Innovative BEE Solutions coordinates its clients’ BEE-related activities and ensures that they are all captured and documented. It also implements innovative and inexpensive activities and trains applicable staff on how to continuously improve the company’s ratings.

Innovative Solutions Group™ is currently a Level 2 BEE contributor. “It’s possible to achieve this level when you have the right people doing the job for you. In the past year-and-a-half we have had over 2 000 BEE certificates issued to our clients,” he says.

Group turnover soars in two years

From the outset, Maré was determined that Innovative Solutions Group™ would become an instantly recognisable brand. “All of the subsidiaries have the same brand identity and each can be acknowledged as a member of the group,” he says.

And it is a brand identity each subsidiary can be proud of – especially when looking at the group’s phenomenal growth. From a turnover of R35-million at the end of February 2014 to a staggering R600-million at the end of February 2017, there is no denying the meteoric rise of Innovative Solutions Group™.

In South Africa, up to 80% of small businesses do not make it past the first few years, but Maré remained focused on doing what he does best – the same philosophy that all of the group’s subsidiaries are founded on – persuading clients to outsource various functions to the group, so that they are able to focus on building and growing their own businesses.

Maré explains, “We are not IT specialists, so we outsource that function. We do exactly what we sell in the market. Business is a risk, but if you can calculate and weigh your risk and find a formula for risk versus return, you can make calculated decisions. The more options you have, the better decisions you can make,” he says.

When it comes to providing advice for other entrepreneurs, Maré stresses that there is no place for emotion when it comes to making business decisions.

“Always think of the critical business response and not your emotional response. By basing decisions on emotion, you could end up making financial, operational, or other incorrect decisions creating a host of other problems. Always think of what’s best for the business, and not what’s best for you. Business has nothing to do with your personal life and vice versa,” says Maré. “A business is a living, breathing organism that needs to be fed. It needs discipline and attention.”

That said, Maré clarifies that this does not refer to his employees. “You must have an emotional connection with your employees if you are to understand their needs. Our entire operation is built on our employees and to run the business as well as we do, we need to understand the human factors at play. Employees are not a company’s product, they are human beings. People’s needs and business needs are vastly different.”

When it comes to the youth, Maré says today’s business leaders are entering the market at a far younger age. “Unfortunately, many youngsters don’t believe in working hard for their success. They have a sense of entitlement, which is a flawed approach. When I started the company and couldn’t feed my family no-one said, ‘Don’t worry, I’ll pay your rent for you’. Youth should not expect success to come automatically. It takes time, passion, skill and an unwavering single-mindedness.”

Another of Maré’s passions is evident in Innovative Staffing Solutions’ Driver Training Programme, which enables inexperienced Code 14 drivers to shadow more knowledgeable drivers on the team, allowing them to hone their abilities through on-the-job training and mentorship. “The programme has been very successful and we train about 1,000 drivers a year. In successfully growing and upskilling them, the results have been a more dedicated, loyal and productive workforce,” says Maré.

“We believe in doing a lot for our employees. In the early stages of our existence, I personally conducted every interview and still do this for key positions. I have always explained to new employees that we have two fundamental rules to follow.

The first is to protect themselves at all times, for example by following up a phone call with an email or a text message; the second rule is that what they put in, they will get out. As an example, the second person I employed advanced from being an Admin Clerk to Group General Manager and my right hand in the holding company.

“We empower our employees to progress through the ranks, thus improving their skill-sets and giving them the opportunity to flourish and thrive into more responsible positions,” he adds.

As a leadership style, Maré believes in maintaining a healthy balance between consistent discipline and rewarding employees who excel. “It is important to manage people individually as each person responds differently to various leadership styles. It’s very important to manage the individual rather than micro-managing the work that they do.”

Tackling challenges head-on

When it comes to challenges, every business within the group faces its own obstacles, says Maré.

“The biggest challenge faced by Innovative Staffing Solutions is educating the public and private sectors about the difference between labour broking and the staff outsourcing service that we provide.

“Whilst outsourcing might not appear be a money-saving method in the short term, in the long run it is just that.” He explains that if, for example, a company doesn’t outsource its IT function, it needs to engage the services of an employee to ensure that the IT systems are well-managed and no downtime is experienced.

“In the event that the employee falls ill, or faces family responsibility leave, it would be an infringement on the employees’ rights to expect him or her to come to work to prevent IT downtime. If however, the company outsourced its IT function, this scenario could be prevented. In this instance outsourcing ensures better opportunities for career advancement for these employees,” he says.

“In addition, we need to overcome the perception in the market that when you outsource services you lose control. This is simply not the case,” Maré stresses. “You actually gain control, because instead of managing something that is outside of the ambit of your core business, you simply have to manage a service provider that is a specialist in its field and is measured by the level of service it provides.”

When it comes to Innovative Accounting Solutions, Maré’s biggest challenge is getting potential clients to understand that there are people who can advise them on better financial practices because they have the requisite tax and accounting knowledge and experience.

“Innovative Accounting Solutions, for example, specialises in taxation, accounting and financial management. That’s why outsourcing a financial function has immense benefits.

“If you think about it, almost everything in the world is outsourced, as is proven by international business practices. By outsourcing a workforce, for example, it can be optimally managed, allowing businesses to focus on what they do best,” he says.

Of the group’s 17 subsidiaries, Innovative Staffing Solutions is no doubt the fastest growing.

“We projected a 30% growth for the financial year and would have been satisfied with that, but we had already exceeded that by 143% at the end of July,” says Maré.

The group has offices in all major operational areas across the country, including Nelspruit, Komatiepoort, Bloemfontein, Kimberly, Cape Town, East London, Port Elizabeth and Limpopo, with its Head Office in Pretoria.

As for the future, Maré aims to break into the technical manufacturing sector. “Automation will result in many job losses over the next 10 years as companies are looking for methods to improve on the problems that the ‘human factor’ creates. I disagree with this philosophy as I think the ‘human factor’ shows that a brand cares about its products and ensures that its consumers get the best products,” he says.

He also aims to employ 15 000 people by the end of 2018 while making certain the group remains sustainable and true to itself. As things stand, with two new contracts currently being signed, Maré will have achieved his first goal by July 2018.

Growth despite tough economy

The Innovative Solutions Group™ is living proof that business can not only survive, but triumph in a tough economy.

“A hard economy doesn’t really touch on business-to-business services because business needs certain key services to survive. When times get tough the market looks for the most reliable service providers to ensure cost efficiencies. We have made sure that we are that supplier. We improve service delivery, market harder and work harder. The services that we offer are essential to every business, they are not luxury items.”

Marketing as a function, is also of the utmost importance to Maré. “When times get tough the first thing most companies cut is their marketing budget because it doesn’t show immediate, tangible results. We have embarked on an aggressive marketing campaign and tripled our marketing budget so that our name is always out there. Whilst increasing your marketing budget in the short term may seem to negatively affect the bottom line, it will assist in creating a sustainable business in the long run. Our marketing efforts have certainly proved successful as we are constantly signing up new clients.”

Every subsidiary within the group has big growth potential. “We find ways to challenge the status quo—we don’t follow the norm,” says Maré.

He explains that the Innovative Solutions Group™ always looks for new and exciting ways to change the way business is conducted.

“Innovative Staffing Solutions will always be the biggest grower in our group. It’s an amazing company with a unique product and has already proved to be much more than I ever expected it to be. Any sector of the economy can benefit from Innovative Staffing Solutions’ offering.”

There are always gaps to fill in any successful business environment and, judging by Maré’s passion and determination to turn things on their head and his success to date, one can only foresee that he will soon find many more.

“The goal of Innovative Solutions Group™ is to not have customer service that is the best, but customer satisfaction that is legendary,” concludes Maré.

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