Buoyant Glotel tempted to float

In an industry plagued by high staff turnover, recruitment consultancy Glotel stands out as something of a beacon. As many as 16 of the first 20 employees taken on by the company - now approaching its eighth anniversary - are still there.

And it is this ability to retain its best people that chief executive Andy Baker believes is a key factor behind the success of an operation that has grown from sales of just over pounds 2m in its first year to nearly pounds 50m last year. At the same time the workforce has grown from just himself and business partner Les Clark to about 200 internal employees and 1,200 external consultants - good enough to put it in tenth place in the latest Independent on Sunday/Price Waterhouse list of fastest-growing companies.

Glotel specialises in recruiting people in the information technology field, but has lately moved into the market for temporary accountants and accounting software consultancy.

Though the company has done well out of serving these niches from its base in London's Wardour Street, Mr Baker and Mr Clark soon realised that the British market offered only limited opportunities. Pointing out that there are about 3,000 competitors in the UK, with the biggest enjoying a market share of only about 3 per cent, he says that the organisation has sought to differentiate itself by growing organically overseas rather than by the more usual route of buying foreign operations.

The first foray out of Britain came in 1992, when Glotel set up an operation in Amsterdam that went so well that it soon found itself operating across the continent. Buoyed up by this, the company set off for the US. Conscious that the competition there was, if anything, more intense than that in Britain, it dipped its toe in the water with a small office in Atlanta - chosen because it was a hub for IT and was one of the US's fastest-growing cities.

Since then, it has become fully immersed in the US, with 10 offices there contributing about 45 per cent of the group's overall turnover. It is now moving in to what it regards as the exciting Asia-Pacific region, starting with Sydney and Singapore. Further expansion of an operation that now stretches across 23 offices in four continents can be expected.

The two founders still own the company 50:50, but are now considering flotation as the means of fuelling further growth and expansion into a billion-pound organisation. Hitherto, development has been funded by confidential invoice discounting, a financing system that effectively enables a company to pay its bills out of future income.

The method, long popular in the US, used to be regarded as something of a last resort but has become increasingly widespread. With the company's army of consultants having to be paid immediately, it offered the only way for the organisation to expand without building up a huge debt, says Mr Baker. "It's exciting, but it's a tough market. When things are good you've got to work even harder. The more markets you're in the more recession-proof you are," he says.