Hattingh Basson and Werner Barnard, Senior Partners at Southwestern Talent, explain the unique career history that spawned the business, the professional services gap that they are filling and why it exists, why offshoring isn't really offshoring anymore, how the South African people create a world-class talent pool, overcoming start-up pain points, and why sometimes the low-tech solution is the winning one.

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Today's guests are Hattingh Basson and Werner Barnard, both senior partners at Southwestern Talent, innovative workforce solutions from South Africa, and one of the most recent additions to the Southwestern Family of Companies. Hattingh, Werner, great to meet you.

Adam. Same on my side. It's a pleasure to be here.

Nice to see you. Adam.

One thing I wanted to start with; how we got to where we are today, and a little bit of that starts in your college years, Hattingh, that you first started in business.

Yeah, it was 2004 and I was a part time working as a bartender in Stellenbosch University, and I was recruited to fly all the way to Nashville and to go knock on about 3,000 to 4,000 doors and get rejected about 40 times a day to make 3 sales. So it was exciting time. Luckily enough, I was crazy enough to do it again, so I came back for summer number two, three and four. I brought a team, small team, but a good team. And eventually the Southern Hemisphere, we were about, I think, 46 students in total, that came to sell books for Southwestern in the US.

What was for you, the information that helped you make that crazy decision to take a leap of faith your first time coming to the US to do that job?

I'm a firm believer, if anyone else can do it, and it doesn't take a doctor's degree, then I can do it as well.

Good internal confidence.

Exactly. And with the training we received and all the history that goes along with Southwestern it made sense that everybody who's working for the company has been with the company. When you look at a company, look at the staff turnover, and everybody that's been there never left. And that was one of the big things that made it really attractive for me to join Southwestern at the time.

Love that. Werner, when you were growing up, what did you think you wanted to do as a young man in college, and how does that compare to what you decided to do?

Adam, that's a very good question. So admittedly, I was fortunate enough to know that I wanted to become a commercial and tax lawyer pretty early on in life, from about the age of 16, I've already started working part time at some of the law firms in Pretoria, which is the capital of South Africa. And yeah, I really pursued a commercial law degree as an undergrad, and then a post grad law focusing on company and tax law at the University of South Africa. So how did that lead me to where I am today. Admittedly, I realized early on in my life that I do not want to become a lawyer for the rest of my my my days, and very quickly jumped into the management consulting, let's put it profession, and that led me to cross paths with the staffing industry. And it's that staffing industry that I've stayed in for probably 20 years now, and the last six or seven years have been focusing specifically on how South African accounting talent can really change the

workforces within the US and specifically the US accounting firms and or US accounting divisions of large corporate companies, I feel passionate about helping people to get meaningful career opportunities, and especially in a country like South Africa, where I grew up, there is phenomenal talent on the African continent and within South Africa, and to me, it's always a pity to know that there's such an abundance of excellent talent and not a sufficient amount of work for them. So for me, knowing that we are creating opportunities for South Africans in the accounting space really serves a double purpose. It helps them have meaningful careers, and secondly, it helps them gain international experience, which can be phenomenally meaningful for their own individual career journeys in South Africa.

Hattingh, what about you? How did, how did you parlay team building and sales and working, I think, in the blasting industry, for some time, you've had a mining and drilling and blasting services and financial sector. What made you decide to parlay that into Southwestern Talent?

The fact of the matter is, when I met my wife about 16 years ago, I told her, If I ever get an opportunity to work again with Southwestern, doesn't matter where I am in my life, I will take that opportunity. And when this opportunity approached us, we just got down to it. We wrote a proposal to come home back to Southwestern.

Culturally, what was it that made you eager to return?

To be quite honest, I liked the idea very much of everybody working extremely hard to achieve their goals in life, and I like the leadership that Southwestern provides. Just all in all, is just a good fit. You know, if you make a mistake, you can fix it. One of the biggest things about Southwestern is that they don't ever give up. I don't know if that's a good thing or bad thing, but at least we know nobody's going to give up. That's quite exciting to go through a trial and error phase, if we have to, and just make it happen. There's so much opportunity, and what we've seen in the road so far is that there's definitely scope to build something massive here.

Yeah, the "find a way" mentality that permeates our family of companies is real. So in finding a way in this industry, you know, something that's interesting about Southwestern Talent is there are some layers that you have to overcome when you're doing something innovative. But what are some of the obstacles that you've found that you need to overcome in US companies to help them understand the value proposition that there's extraordinary talent? How do you open the door and help them not just immediately shut it out because it's different?

No, Adam, that's a that's a really good question. So one of the biggest barriers to cross was building a brand, getting into the market, getting in front of the right people, talking to the decision makers at the end of the day, the common problem of accounting, short, shortage is all over. It's not just within a, b and c, it's everywhere. There's close to 200,000 open positions in the US. So what I tell the people is that the sale is actually not so difficult. It's easy. It's getting in front of the right people that understands the industry, understands offshoring. That makes it a little bit difficult. So what we have to do just build a brand, build relationships. And it all started with just connecting with the right people that Southwestern Family of Companies introduced us with.

As Hattingh rightfully mentioned, the firms really quickly get their heads around the fact that offshoring has been in existence for quite some time, even the small and medium sized firms, I think the proposition we offer is the fact that we help them mitigate the risk of trying to do all of that on their own, and that helps them a lot in order to make that decision. The second thing is, South Africa poses significant benefits compared to the traditional offshoring model that's currently facilitated from predominantly India and the Philippines. Is in so far as South Africa depends on where you are in the US, have got a six hour time zone difference, it does allow for sufficient overlap between South Africa and the US counterpart, so immediately there's one less risk to be concerned about, and that is due and proper communication. South Africa's location per se, is so much so that some firms are actually thinking of South Africa as a near shoring

destination. And the reason for the near shoring destination is the time zone, as I mentioned. But equally, a significant amount of cultural alignment in terms of the language and how we speak the English language, the common denominator of accounting being a global language. And I think thirdly, also a lot of cultural alignment between South Africans and how things are being done in the US. So I think overall, the jump to working with South Africans, be that time zone, cultural and or language, is actually not as big a jump for the Americans as it initially were perceived to be many years back, with technology enabling this, especially after COVID, it really allows the American firms to think of Cape Town as another branch of their let's put it of their offices, so if they manage to get their heads around having a multi branch environment within the US, adding a location in Cape Town where Cape Town uses the VPN of the firm is in daily contact with that firm works on

the same type of systems and technology that really basically shrinks the risk factor significantly, and What remains is the cost efficiency and benefits proposition that comes from the arbitrage between cost of labor in South Africa on the one side and what similar skills would cost CPA firms and corporate divisions within the US if they were to fish from us talent pools only.

Makes sense. Yeah. Why do you think there's such a gap in the accounting space, in the US?

I think it boils down to predominantly two things. Our data tells us that the accounting population, on average, is getting old. If I say getting old, there's a very high exit at the top end of the firms, meaning partners are retiring or very close to retirement, so that creates a massive attrition and or exit out of the profession, and that exit is not supplemented by a sufficient flow of talent from various colleges and universities across the US. There's a perpetual talent gap in the accounting space, in the US, CPA firms and corporate accounting divisions are really going the extra mile to show the level of attractiveness and career opportunities that being an accountant can ultimately provide the talent. But still, I think for the foreseeable future, there's going to be quite a big gap in the market.

I always explain it to the clients, one of the biggest reasons why everybody is so excited that we enter this market, and there's actually two reasons. One is that we join forces with, obviously Southwestern that we do have a local presence. So the first objection would be, people ask me, so who do I pay? Do I have to wire funds to South Africa. And I was like, no, no, we've got office in Nashville. And the second thing about the quality of education as well, that's probably one of the biggest reasons we enter the market, is the quality of education. You guys have the biggest economy in the world, so the graduation rate can't keep up with the growth rate, and the appetite for accounting just went elsewhere. So when they go on things like AI, like chatgpt, and they say, What can I make in 20 years from now? What do I have to do to get there? It throws out, you can make a lot more money doing this, and accounting is not one of the options.

Yeah. So let's, let's get away just from the what you do. And I want to talk a little bit about what it's like to run the business so many of our listeners come here to The Action Catalyst, to understand and relate to what it's like getting something new off the ground. What were the expectations of what the challenges would be, and what are some things that you're uncovering that you didn't expect? I know this happens in every business and every startup.

Adam, I'll take a first swing at that. So I've started a couple of businesses in the past, some in the let's call it logistics and supply chain industry, some in financial services within larger corporate environments. And I think one of the primary things that you need to have resolved upfront prior to starting a business is you need to be very clear about what need are you solving for? What is the need that you believe that will be let's put it in place for long enough that it allows you to build a sustainable and agile business over a period of time. So in southwestern talents case, it really is this perpetual talent shortage that will prevail for years to come, because I don't see the talent shortage being resolved in the very near future. Even if the talent shortage does get resolved, the premise and the financials of having a business process outsourcing or BPO partner offshore will remain making sense for years to come, because they will

always be countries where labor is cheaper than within the US. So against that backdrop, I think Southwestern talent has very clearly defined the need in the market. Secondly, you have to be very clear in terms of how you articulate the offer that you bring to the market. In our specific instance, we've decided on only two offerings. We offer, firstly, long term engagements to our clients, where we augment or supplement the accounting talent with people from South Africa once a client has actually grown and journeyed with us during this let's call it augmentation solution. We also help them actually set up what we call a global capacity center in the Cape Town area. So that means we enable them, after they've grown with augmentation solutions, to ultimately create something for themselves. So in that instance, it's almost we being their partner to create a branch or an office of them in Cape Town. Now we do that in close cooperation with them in a model that's

known as build, operate and transfer. So we help them build out the Team. We help them operate that team, making sure that this team of people in South Africa follows the compliance, the standards and the likes of the US counterpart, and at some point in the future, we allow for them to own that infrastructure and team that we've created as a partner, and that's the transfer section of that. So once you've identified the need. You really need to have an offering that resolve the needs of the clients. And those two offerings, we believe, is a resolution or a plan of action for our US based clients, to actually engage with us, learn about the South African talent environment and then pursue a journey into our offering that will really help them work against the talent crunch that they experience within their firms. As with anything new, it's always difficult if you don't have an established brand to attract the right level of talent. I believe companies start whether they knew

or established, like Southwestern family of companies, it's always about the people, attracting the right people, holding on to the right people, and really providing the people with journeys so that they can stay with you.

Yeah. So there's two things that always pops up when you speak to a new prospect, and it's like, how long have you been in business, and how many clients do you have? That's the main things. Main things that people really want to see is that they can put faith in in your brand, because you've done it before. People like doing business with successful people, and it all boils back to the basics of doing business with successful people. And that's why we decided that we need to know what we're going to sell and to whom we're going to sell it to and as soon as we defined that, it made it a lot easier to enter the market. Because, you know, all over the show, knocking on every single door. You're just knocking on the right doors.

Yeah, you know, when you're working with companies, what are the challenge points you see inside of accounting teams?

Adam, I have to be honest with you, I think finding the right skills related fit is very, very important. And why I say that is accounting has branched out over the years in so many specialist disciplines, just like the law profession, the medical profession and the likes. And what we definitely encounter is that more and more firms are battling to find the ideal skills match, and that becomes more and more difficult as a talent pool shrinks. So if the US, if, if a firm, is only looking for the exact skill and or talent fit for that specific group of people or organization, and they don't cost the talent, net wide enough, they sometimes end up basically settling for somebody that they think can do the job, or that they hope can do the job, and that's when there's complexity in the organization, when that person does not have the necessary experience and the necessary of skills, And that then creates turbulence within the team, ultimately leading to some, let's call it,

increased attrition, and that then basically puts the entire firm on their back foot in terms of, we don't have the right number of people. We can't take on new clients, or if we take on new clients, it creates phenomenal amount of work pressure within the organization, their ability to accurately plan the skills that are required, let's call it, the capacity that they need in order to service all of their clients according to their own service standards. That in itself, is becoming quite a let's call it quite a skilled discipline in its own so the result is a organization such a southwestern talent that can provide talent from a very large South African pool of accounting talent can actually significantly supplement their ability to look for talent globally, instead of only locally, within a state or with within the US.

What are you learning from your placements and from this pairing of South African talent with US companies, what are you learning about the profile of the South African that really thrives in that environment?

So one of the things that I think Southwestern Talent does phenomenally well is trying to understand the culture of our clients, so that when we look at talent within our talent pool, that we really identify the best possible cultural fit between the South African and the firm that they will be working with. So cultural fit is one of the most important things that we need to understand from our clients, so that we can find the corresponding cultural alignment in the candidate that we want to place at that specific firm.

The only way I can pivot from that is from testimonials. Everybody that we've placed are still with that company. Some of that CPA firms are currently helping us with testimonials and introductions to new CPA firms, because at the end of the day, competition is healthy, and they all need everybody else to succeed to stay in the market. So from that backdrop, like Werner always says, Just coming back to the talent side, what it does in the shortage space as well is it helps the current team not feel burnt out. It helps them to meet deadlines. And overall, it just lifts the spirits to know that the workload can get done collectively from South Africa and the US.

So on an individual note, Werner, what are the habits that you feel like you've personally formed that helps you drive business forward, that helps you cultivate what's needed inside of a business to make it successful, what are the personal habits that you feel like set you apart?

Thanks for that question, Adam, I love responding to those because I think in the end, successful businesses are successful predominantly for for two or three reasons. Firstly, I believe in the value of connection and relationships. And I mean in southwestern talent or selling people to other people related firms, you have to have a very deep level of trust. So point number one, invest your time in building successful and deep relationships. Secondly, I think it's of phenomenal importance to have an organization running like a well oiled engine. So have your processes well mapped and understood, have your have your back office in alignment to how you want to represent your organization in the front office. So I'm a huge proponent of making sure that your back office is in full support of your front office. And I think then, thirdly, also very, very important, is to look after the people that you employ. I believe, if you start a new business and

you focus on those three things, deep and meaningful relationships with your clients, a well oiled engine from a back office perspective and respect and appreciation for the people that's part of your team. It's very difficult for that new organization not to be successful.

Now, for me, on a personal side note, it would probably just be sense of urgency. Don't waste time. Time is your most valuable asset. Manage your time well, don't make decisions that's going to cost you more time, more money. If it's not working. Can try something new. Get the right people involved, and if you don't know what you don't know, raise your hand and say you don't know, and somebody else can help you. It's just being true to yourself. And just work hard every day. If you think you are working harder than somebody else, think again, you need to still work harder than that guy and the guy next to him and the guy behind him to succeed in life.

It's something we've definitely, I've seen. It's that innovation of taking risks and chances, and if it doesn't work, move on, instead of being too timid. I appreciate that. Technology; on an individual level or a business level. Is there anything you feel that you have gravitated towards using that's been exceptionally useful in building the business?

I think, and right, right off the bat, um, given the work that that we specifically focus on, meaning that, let's call it the talent industry, you have to make a significant investment into your ATS and your CRM. I think the moment we implemented bullhorn, and bullhorn became the epicenter of how we talk to our candidates and how within the firm, we know what we are saying to which clients at what point in time, once all of those interactions are logged and accessible by everybody in the firm that really created the catapult for growth. And yeah, I think we are fortunate to have phenomenal support from the southwestern family of companies. IT division, and I think that as a from a from a startup perspective, really makes your life a lot easier, knowing that you've got a solid partner that supports your IT infrastructure, and you've actually got the operational IT tools that really can accelerate growth within the organization. So for me

personally, it was definitely the ATS and the CRM implementation.

CRM is great. I'm very old school, so I prefer to just knock on the door. So using the whole technology factor is very cool and new to me. And I love the way it saves us time. We get in front of a lot more people, just documenting everything quicker, following up quicker, and getting to the next steps quicker and closing quicker.

It's interesting, with the proliferation of AI and the growth of technology, there's, there's two ways we need both, I think. And you know, Werner pointed to one, which is embracing these tools that save us time and can duplicate some of our efforts. And then number two is, you have to learn how to cut through the noise, right? And if everybody's communicating and doing their approach through email passively, then sometimes showing up at someone's doorstep, at an office, is the best way to do something that's very scarce and unusual, and build a direct relationship email. Open rates are like point, oh, 1% nowadays, you know. But FedEx, if you send a fed a Federal Express package that needs a sign that the open rate is 100% you know, it's old school, but it works exceptionally well. So, I appreciate both your responses. One thing I would ask is, what is maybe one habit or practice that you feel personally saves you time each day?

Staying on schedule.

Simple but effective. Werner?

A skill that's probably most needed these days is, as you pointed out earlier, is to basically be able to cut through the clutter. You should not be spending time in an inbox that's filled with unnecessary communication. So for for me, it's really trying to extract the gist out of the day, following the diary and spending just the right amount of time in your inbox. Because in the end, I mean, we don't work for our email boxes. We work for our clients by being effective in how you communicate and knowing which emails deserves your time and attention allows you to spend more time in front of your clients. So perhaps a bit of a lengthy response to say, know how much time to spend on emails and know how to spend time in front of clients, and don't confuse the two as being busy in both instances.

Yeah, busy doesn't always mean productive, right?

Exactly. Never confuse motion with progress.

Well said. What's one piece of advice that you would turn around and give a young, 21 year old Hattingh?

I actually give this advice to quite a few people when they tell me their idea what they want to do, what they want to achieve, where they want to be in 10 years, wherever. Then I've only got one response is register your LLC and do it start tomorrow.

It's really all about get up, dress up and show up every single day. There's just no space for laziness in this world. It's the action orientated people that is currently changing the world. So I tell it to my kids every day, get up, dress up, show up, because that's ultimately the success recipe to life and to business.

So funny how I remember when I was 18, 19, years old, knocking on doors as well. You dealt with more than one car problem. And so the other day recently, my tire blew out on the highway and my wheel cracked, and I thought to myself, Oh, the expense and the problems, and then my AC unit goes out. There's probably a young version of myself that would have reacted one way, but there's this feeling that overtook me that's probably from the training I received from our company when I was 18 where I said, Wow, let's see how quickly I could, I could fix these problems so I can get to work and do my job. And it was fun. It just became a game. And by, you know, 9:30 in the morning, I felt like I'd already accomplished three things, even though most people might have looked at that as waking up at the wrong side of the bed.

You bring a very good point. And I mean, it's a word that a lot of companies are using, and it's agility, but I do think it also applied to us as people as well, exactly as you said, even if life throws you a couple of hiccups or lemons early in the morning. It's how you can quickly move beyond that and see the bigger focus for the day. Or what does success look like that that day and at that point in time, success may be to fix the wheel, fix the AC unit, and get going again. So I do think that mental mindset of agility, your ability to move on, even if everything is not going according to plan, I think that is of phenomenal importance, and that's the one thing I can always give kudos to South Africans, is, if ever you want to know of a team of people globally that knows how to move on and be agile and quickly put a challenge in the rear view rear view window, it's a South African.

What a wonderful thing to end on. Thanks for sharing your knowledge and wisdom with us today, some of the tools that you possess. And where can our listeners go to find a little bit more about Southwestern Talent?

Thank you. Adam, yes, everybody can find us on www.Southwesterntalent.com and if I can ask everybody to find us on LinkedIn and share and like our page and follow our page, that's where you can find us. Direct link to the website, to the contact details, everything you need to know is on social media.

Werner, Hattingh, it was a pleasure. Thank you guys.

Thank you so much. Cheers, cheers. Bye, bye.