It’s no secret that the so-called jobless recovery has been a mixed blessing for many businesses that remain dependent on an uptick in hiring to drive growth. Western Union Co. is just such a business. The unemployment rate can quickly bolster or undercut the performance of Western Union, the largest money transfer company in the world. So it was earlier this year when a pickup in hiring during the first quarter helped the company to process 49.6 million consumer transactions, an 8.1 percent increase compared with the same period in 2009.

However, having steadily expanded its operations outside the U.S. and built new product lines such as mobile-money transfers, Western Union finds that domestic hiring no longer holds sway over its financials, as Western Union CFO Scott Scheirman explains in this edited abstract of a recent interview.

BF: How do you feel Western Union’s finance function has responded to the downturn?

Scheirman: Clearly, the last 18 months have been challenging from a global economy standpoint. The analogy I like to use is the 70-year flood, and hopefully we don’t see something like this again for another 70 years, but we feel that we have validated our business practices. These are prudent practices, where we have suffered no real losses to speak of and which have allowed us to execute on a number of key strategic initiatives that really have made us stronger inside this environment.

BF: Can you be more specific in terms of initiatives?

Scheirman: As we went through this cycle, we had opportunities to look in depth at our practices. For example, we’ve always done long-range forecasting, but now we have added a few more scenarios to it. We’ve been thinking about how the markets may evolve, because it’s always tough to predict where they may be headed three to four years down the road, and having three or four scenarios is always helpful.

BF: How was your response to the downturn executed?

Scheirman: This really starts with the finance team. I’ve been fortunate to hire, retain, and develop some key people, including our treasurer — who really allowed our liquidity to remain strong. Our chief risk officer really helped to identify certain risks before they became significant, as well as allowed us to take appropriate actions; a testament to this is that our losses continued to run less than 1 percent of our revenue, which is in line with our historical practices. Our finance team partnered with our business leaders around the globe to see opportunities and challenges and to drive our business.

The second thing was reinforcing diversification. If you look at our cash and investment, our first goal has always been preservation of principal. Our second one was the return on that. Also important is our capital structure or our debt profile — we had debt maturities due at appropriate times, so no large amount of debt came due during this period.

BF: Your offshore footprint has continued to grow. What has this meant for the business?

Scheirman: We operate in 200 countries, and besides the U.S., there is no one country that is more than 7 percent of our revenue. So some economies are seeing less of a challenge than others, and doing business in 200 countries — from a diversification standpoint — was clearly helpful. Meanwhile, we have maintained great relationships with our banks. We were able to refinance about $500 million worth of debt by working closely with our banks. This allowed us to is generate over $1 billion in cash flow, so we have strong cash balances on the balance sheet. We were able to do a couple of things, including the acquisition one of our large agents in Europe, known as FEXCO. FEXCO allowed us to have a deeper footprint in Europe, and we also spent $370 million on a company called Custom House up in Canada, which allowed us to expand our product offerings.

BF: What are some of the key metrics you have come to depend on over the last 18 months?

Scheirman: Our goal is to profitably gain market share. We closed 2009 with an 18 percent share of the market. Our objective every year is to grow market share, and that goes for whether it’s a very robust economy or a challenging one. We also focus on customer analytics. What is our new customer acquisition rate? What are our customer retention rates? What is the frequency or usage of our customers? And then we have the typical measurements related to cash flow and cash flow growth. We’re also becoming more focused on productivity and how do drive efficiency and effectiveness. ###