As a young lieutenant in the Royal Navy, AJulian Young, chief executive of Matrix Supply Chain Management, supplied fuel, parts and provisions of all kinds to the British fleet. Young left his life on the ocean wave more than a decade ago, but the parallels between being a Naval supply officer and heading up one of the UK’s most prominent vendor-managed service providers (VMSPs) are obvious.

“The fundamental thing about the military is that you have the right thing in the right place at the right time,” he says, from the company’s shipshape offices in Milton Keynes. But he could just as easily be talking about the raison d’être for the entire staffing industry.

Indeed, you could say that Young has followed these principles ever since. Not least at Matrix, where under his command, the business has grown from a £100m enterprise to one with a projected turnover of £200m this year. During the same period, the number of recruitment agencies supplying staff through Matrix has almost doubled from 260 to around 500.

And just as Young’s Navy experiences were the bedrock from which he launched his subsequent career, the business model he developed at Matrix also emanates from the next stages of his professional development — this time in recruitment.

After leaving the Navy, Young joined Securicor Recruitment Services. “It was fairly standard stuff,” he says, but even at this stage, Young was beginning to ask questions of the recruitment industry.

“It always struck me as slightly wrong that as a recruiter I could sell what I could sell to clients when I had a candidate, but more often than not I could not supply all their needs,” he says.

“This was because I didn’t have another candidate,” he continues, “either because there weren’t any or because they were signed up with someone else.” He adds: “The only thing I did differently to others was look at the whole recruitment process from a fairly cynical view.”

There followed a brief interlude as director of managed services at Blue Arrow Managed Services, where Young took charge of the company’s Centrica and BT accounts among others. However, his belief that the relationship between recruiters and clients was flawed remained.

He says he felt what he was offering was “a fairly poor service”, and one whose quality diminished even further when one agency was asked to supply more than one category of staff. It follows from this, he argues, that in order to meet their needs, clients need to engage with more than one supplier.

However, he argues that while “it would be great fun” to have a personal relationship with multiple suppliers “if your business wasn’t based on net profit but a more philosophical view of life”, this requires multiple contacts, multiple price points and leaves line managers little time to do anything else. Hence, the need for ‘middlemen’ such as Matrix.

It is an argument that many employers, particularly those in local government are finding increasingly persuasive. Matrix recently picked up large contracts to provide its business process outsourcing services to local authorities in Flintshire, North Wales and Lambeth, London.

The company expects to make net profits of £1.6m in 2008-09, up from £0.6m the previous year. International expansion and moves into new areas such as facilities management and care are also planned.

Young’s first introduction to the world of VMSP provision came when he moved to Comensura, part of Corporate Services Group (CSG), now Impellam Group, where the then chief executive Peter Owen asked him to adopt US technology-led managed service models to manage workforces and direct suppliers. “The idea was to use technology to reduce our costs, and make more profits from our accounts,” says Young.

Young says the model established at Comensura had several clear principles. One was “if you want to manage the supply chain you shouldn’t be part of it”. Another was “not to increase costs”. “The weight of the transaction has to be carried by the technology,” he explains. These two principles are also integral to the Matrix model.

After growing Comensura into a £200m business, Young left after being headhunted by James Caan, chairman of Hamilton Bradshaw Human Capital, who had acquired Matrix as part of Eden Brown. “He [Caan] was very compelling. He was very keen to let me do what I needed to do with Matrix to make it into a hugely successful global business.” Young says he was also attracted by the opportunity to build a long-term business.

Young admits he left Comensura in the late summer of 2007 “on fairly bad terms” — not surprising considering that he took two other founder directors with him, as well as the legal director. “I will defend the right to work for whosoever I wish to my dying breath,” he adds testily. However, evidently he bears no grudges. “Comensura is just a competitor in the market,” he says. When contacted by Recruiter, Comensura declined to comment.

On joining Matrix in March this year, Young set to work overhauling “a labour intensive process, in which the company was doing a lot of the work of the suppliers by effectively screening candidates in the centre”.

Matrix bought a proprietary software technology to facilitate the transaction between the supply chain and the clients. “We got the supply chain to do what was necessary to supply good quality candidates,” he explains.

Similarly, the new technology allowed clients to place their orders on the system, so they could be tracked, providing them with “empirical evidence” of what was going on. Headcount was cut, the company moved from London to Milton Keynes, and it became a 24/7 rather than a 08.30-17.30 operation.

There are now 18 account managers who deal with clients and can view and manage the whole process from order placement right through to supplier payment.

Young is evidently proud of the company’s achievements. “We manage the transactions and we manage them better than anyone else. We don’t replicate the supply chain, we ask them to do what they are paid for, and we make it easy for clients to place orders.” Young says the average time taken for suppliers to be paid has fallen by an average of 22 days in the past six months.

He is aware of the criticism made of VMSPs that the service clients receive is inferior because there is no direct contact between recruiter and client. However, he says that if there is a requirement for high quality recruiters to communicate directly with clients and this can “add value”, he is “more than happy” to consider this.

The Association of Social Work Employment Business’s idea to allow certain recruiters tier one status “is something to think about”, but only as long as his clients find it acceptable, he adds.

“We constantly ask suppliers for their views and hope we can engage with them better,” he says. He says the ‘proof of the pudding’ is that around 20-30 suppliers joined ‘the Matrix programme’ in the past month.

Tim Wood, managing director of education recruiter Chalk Face, which supplies staff through Matrix, told Recruiter that Young “recognised the importance of working in partnership with his suppliers”. He says the Matrix model helps suppliers meet the “exacting standards of consistency of service and standardisation” required by clients.

Nevertheless, Young admits that suppliers leave the Matrix supply chain all the time. “What I think is that they are looking at the profit route, and inevitably their gross profit will be lower if they go thorough our programme than if they go direct to the client,” he says.

However, he argues that because recruiters can see all the jobs in their category coming in from Matrix, “a large part of their cost base can go”. They no longer have the cost of all those sales calls, as well as the “wining and dining” associated with account management, he says.

Young says his concern is that recruiters make a profit on the costs they incur, because that provides a sustainable business model, and not that they make “an excessive profit”.

He is also dismissive of suggestions that the Matrix methodology is unfair to smaller agencies. In fact, he argues, “it balances things up” as agencies are “not marked down” by Matrix’s balanced score card if they only submit candidates for a few vacancies.

And while he admits some small recruiters will get ‘marked down’, and subsequently not used for submitting poor quality candidates, this applies to all recruiters of all sizes across the board. Recruiters are also free to charge a higher rate than that suggested by Matrix, and because the scorecard is based 70% on quality and only 30% on price, they won’t necessarily lose out, as long as the quality they offer is demonstrably better.

Young says he “gets a bit weary” of those who criticise VMSPs. He says all he is doing is systemise the boring and routine bits, and allowing the skills of recruiters “to interpret a requirement and submit a candidate” to shine through.

And while he admits the Matrix methodology is disliked by recruiters, whose short-term profits are hit because they can no longer “sell on their stock” of inappropriate candidates, he argues that for truly professional recruiters, it can only be beneficial.

“If you can’t see the vision for systemising then you might as well say goodbye to the 21st century,” he says.