Publisher’s Corner

I just heard one of the dumbest things ever from a long time practitioner who has very successfully worked in a very specialized niche for over two decades.

This reader’s major client (several very high level searches every year for over a decade with this Fortune 50 company), recommended his firm to one of their outside service providers as the best firm to perform several high level searches for them.

The prospective client (also a highly visible and well known firm) called our reader because of the recommendation and told him that they had two high level openings and asked whether our reader would be interested. He said yes and the potential client said they would get back to him.

In the meantime, as a result of efforts made long before the telephone call, our reader had one of the referred prospective client’s senior executives on the final interview track with another of his clients. Although it didn’t work out, the candidate evidently told his employer (the prospective client) about the deal and the fact that our reader was the conduit for the other job.

Our reader didn’t hear back from the prospective client for two months, at which time, they asked him for some background about his firm and successes as well as a proposal. Our reader spent a full day preparing the information and submitted it.

One month went by; then two. In the meantime, the prospective client’s executives discussed the proposal and were surprised to find that our reader had a good many other high level contacts within their company. These were people who were occasionally used by our reader for referrals and other networking. Our reader also told me that he had resumes on quite a few people within the prospective client’s company which he had gathered one way or another over the years but that none of them were under active consideration for any of his other clients nor was he interested in marketing any of them.

This particular reader is considered by most people within his niche to be a premier performer and a seriously influential person within that niche. A definite mover and shaker. Just exactly what a recruiter is supposed to be and do and the one who should undoubtedly be the prime contender to handle the open positions for this prospective client.

What happened? Our reader received a letter from their HR Chief thanking him for responding to their ‘RFQ’ but “after much discussion with other executives (the old committee buck pass) they were apprehensive about doing business with him since he had so many existing contacts within their company.” They gave the openings to two other search firms, neither of which had experience in this niche or these types of searches.

Our reader called to ask what I thought about this whole scenario. My initial reaction was an HR Chief with the IQ of a doorknob. That could still be the case. But upon reflection, what if a couple of the “executives” with whom our reader’s potential involvement was discussed internally were the very folks whose resumes resided in our reader’s database? What if they were afraid that their cover might be blown? That, of course, was not the reason given in the turn down letter and I guess we will never know the truth of the matter, but the ignorance of a company turning down the search firm recommended by their best customer because they knew too much about the industry’s key players bends my mind.

While I feel sorry for our reader, if it took four months for them to get back to him after the original call and the fact that everything seemed to hinge on committee decisions, he should probably thank his lucky stars that this company’s recruitment problems are now his competitor’s problems.

Hoo boy!

Mini tip. After reading our January issue regarding the selection of a specialty niche for the umpteenth time, one reader wanted to know how to find a listing of the hottest and most sought after openings within some of the specialty areas mentioned. The simplest way is to morph yourself into a “jobseeker” and log on to Monster, HotJobs or any of a thousand other job boards and see for yourself what openings are being advertised. You will also see what jobs are advertised by your competition. Fee paid, for sure.

Since most postings also reveal the employer, this is a great opportunity to create a database of the types of opening generally sought by these firms which can be useful in future marketing efforts to those companies.

One practitioner with a “rare bird” type candidate used the database he had constructed with this technique to identify four companies he never thought would be able to utilize his candidate’s unique background. Guess what? He placed him with one of them for a $40K fee. You never know when a weird background may be just the ticket for a placement with a firm you never suspected as a target.

MORE ON SPAM FILTERS Last month, I opined about my crankiness with all the spam filtering going on, much of it counterproductive to your business. Imagine my surprise when I heard from CareerJournal.com, The Wall Street Journal’s executive career guide discussing the same problem from a jobseeker’s perspective. Tony Lee, esteemed editor in chief said, “Corporate spam filters can hinder companies that are looking for the right people, and it’s hurting job seekers. It’s difficult to determine how widespread the problem is, since neither companies nor job seekers typically are notified when e-mails are deleted by spam-filtering systems. Yet, since many employers now advise applicants to send resumes via e-mail rather than the post office, the issue is becoming a headache for job seekers and companies. Resumes, along with other legitimate e-mail, most commonly are blocked when companies set spam and virus filters too high. E-mail filtering systems typically scan for keywords that are common to spam, such as ‘free,’ ‘expand,’ and ‘trial,’ as well as exclamation points or colored backgrounds. Messages containing attached files sent from unknown addresses are often deleted automatically. Companies also block suspected spam senders whose addresses are on ‘blacklists,’ or deflect mail from an Internet service provider known to be used by spammers.”

Everybody understands why you might lock your doors at night but erecting iron bars and metal doors might just cost you the business you try so hard to acquire. Think about it.

A recent survey conducted by ExecuNet, reports that by a margin of two-to-one, executive recruiters believe a second term for George W. Bush would be better for the executive employment market than a victory for John Kerry.

According to the survey of 149 executive recruiters, 66% believe George W. Bush will win the Presidential election, 12% are anticipating a victory for John Kerry, and 22% were unsure who will win on November 2.

A majority of recruiters (54%) think a victory for George Bush would have the most positive effect on the executive employment market while just 27% said a Kerry presidency would be best for the job market, and 19% were unsure.

A related survey of 406 employed executives revealed similar sentiments, as 54% believe another term for George W. Bush would have the most positive impact on the executive employment market compared with 19% of executives that think a victory for John Kerry would be best for the job market. Twenty-seven percent of executives were unsure about which outcome would have the most positive effect.

“While Republicans are typically perceived to be more business-friendly than Democrats, the support for Bush could also reflect what’s happening in the market,” says Dave Opton, CEO and Founder of ExecuNet. “The job market is making an impressive comeback, in the last three months alone we’ve seen a double-digit increase in the number of executive members that have landed new jobs.”

I was asked by one of the networks for my opinion to appear in their newsletter not necessarily about who would win – but whether the end of the election nonsense itself would matter. My answer was a resounding yes. But opinions are like noses; everyone has one but that doesn’t make them any more attractive so we went to our readership for some opinions. Since we value the secret ballot, we have omitted the respondents’ names. We thank them for their input. We asked: “Will the coming election make the environment for the search and placement business better, worse or about the same? Why?”

“I’m an eternal optimist and as such think that things will be better. I can’t, however, tell you why or whether it makes a hill of beans who gets elected or not. Certainly, a Republican president will probably bode well for the economy and the country, but I’m not sure either candidate, or either party really has any idea what the hell they are doing. This whole election year to date has been disgusting and more ridiculous than usual. Who cares what happened 30 years ago?”

 

“My hope is that it will improve as long as we do not have another 9/11. Hopefully, companies and the stock market will know what is coming and get back to work. They will not be sitting around wondering which way the government will be moving. Knowing is a good thing.”

“I believe that so much attention, and rightfully so, has been given to the November presidential election, many decisions have been put on hold. I do not believe that this is a tax issue but more of an issue of the direction the country will take and how that direction will affect domestic and international business. Once the election is concluded, decisions on business expansion, hiring, and other areas that will directly impact my business as a recruiter will be put in motion.”

“I think the election process will not be such a big barometer as many would like to hype. I believe the business will continue to grow and that our industry should benefit. The only real issue is the underlying oil problem. As sturdy Americans, we will solve that issue as well, but it may cause some slowdown in our GDP and thus create a domino effect and slow us down. On the whole, our business, which specializes in a very mature apparel industry, has shown consistent growth throughout this past year. Notwithstanding any election hype!”

“I think it will stay about the same. We have not seen much of a change. If anything, we have more activity now.”

 

“The election being over will be good for business and good for our business. Indecision is the worst thing for the search industry. Remember “time kills all deals.” When management and/or candidates perceive some unknown they are likely to second guess their judgment and decide to wait and see. Ugh, I smell the fruit rotting on the tree. Oh, by the way, speaking of indecision I wonder which candidate would be best for our business? … hmmm, ponder, ponder 😉 . By the way thanks for all the stimulating articles they help me stay focused good business through all the election noise. Keep up the good work.”

“Same. It’s never affected my biz before.”

“If George Bush wins, the economy will continue to improve along with the attitude of hiring managers.”

“Same or better. Current market is excellent for attorneys, our specialty. Election may remove some uncertainty. Bush/Republican election generally expected to be more pro-biz although economy & job market was excellent under Clinton, although the GOP controlled Congress.”

“Worse, because the Administration has been playing games with the economy and won’t be able to any longer. The administration plan for the economy is not good for the nation.”

“1. I haven’t heard any employers or candidates comment that the election process is affecting their hiring or being hired.

2. Demographics have more affect on the need for our services that most other factors. It’s still hard to get outstanding candidates, and almost impossible for employers to do it themselves, so winners will continue to win and others won’t, in my opinion.

3. Maybe if I had multiple offices and lots of staff I would care, but it seems that recruiters who apply their brainpower and skills, make a good to outstanding living in this business no matter what.”

“Probably about the same. By the time I see this or remember it when I see others printed I will know if my saying that Kerry is not likely to win so the upswing will continue to follow whatever course it is on now is correct. (read that again slowly, it works). If Kerry should win, he is such a politician that he will do almost nothing (slightly less economy-wise than Bush). There is no Reagan Revolution on the horizon. We are primed for just a bit more or less of the same from government. Whatever does happen economically will not have much to do with the executive office. I hope that security related events are not significant enough to affect the economy enough to affect our business.”

“I have had clients say they are waiting to see who is elected before deciding to do additional hiring.”

 

“Better – It will take one ‘uncertainty’ off the table. I believe business is poised to live with either candidate (and has developed scenarios for each situation) but seems to be waiting for the election results to implement the appropriate strategy.

“Better. Capital spending is still being restrained due to the uncertainty of the election results. Once that spending is unleashed, we will see a tide lifting almost all boats.”

“About the same. I feel neither candidate will have much/any effect on interest rates or unemployment. Plenty of capital available at unbelievably low rates for companies to borrow for expansion. Low unemployment means consumers have money to spend but, also that the talent pool we rely on is employed and not posting resumes or responding to other typical HR recruiting habits. That means the companies in our niche have to turn to the professional recruiters to go and get the few, the proud and the talented.”

The election process makes the environment for the search and placement business better … only if Bush is going to be the clear winner. I’m concerned about the impact on small and growing businesses if Kerry gets in office. Having this Democrat in office could lead to potential stagnation of growth along with increased costs of doing business through his proposed tax policy … ultimately decreasing the amount of potential openings and pushing down search fees. Kerry would also be weaker in the war on terror … and as we know any major terror attacks wreak havoc on the economy and our business.

NO CHANGE. Except perhaps … for the Pharma/health care industries which may experience a slight uptick due to the comfort of four more years of favorable government.”

I believe the markets are already expecting Bush to win.”

“Kerry will win as I think he should. The Congress will remain in Republican hands as I think it should. There is nothing better for this country than political gridlock. I can’t think of one more law that needs to be passed ever! Enough already!”

“I feel the environment for search and placement will be better. The focus is not on hiring, it is on electing a President. Many companies are very involved with the election and are not taking the time to make the decisions to hire, or they just want to see how the elections come out before they hire. Companies are going to have to hire before they totally burn their employees out. As employees hear that the economy is improving, they expect to have additional employees hired. Our business has picked up a great deal. We have developed a lot of new business during the downturn and now we are seeing the rewards from our efforts. We appreciate your publications. Thanks for keeping up informed.”

 

“It will improve prospects for our industry because our clients will be dealing with more certainty.”

“No change if Bush, step back if Scary Kerry (he is European socialist/anti-capitalist/big government interference)”

 

“Business and the Stock Market prefer known versus unknown environments. Too much is described in the extreme during Presidential election years. After the election a more pragmatic approach should evolve.”

“We are hearing from our candidates that a number of them seem to feel the market will pick up after the election. Oddly enough, they don’t think it matters which candidate is elected. I just believe it is one more area of uncertainty for the marketplace and once the election is over, we can get down to business again.”

 

“We do not believe it will affect our business either way. We recruit in the marketing environment, and it was so depressed and many of our firms are very understaffed and are now staffing up to meet demands of the customers & clients.”

“I don’t have a clue but whatever the outcome, we will survive and prosper.”

“I’m hoping our National leadership doesn’t change. My concern is that if the Democrats win I wont feel as positive as I do now about the future business climate for all industries.”

So there you have it, folks. On a lighter note, did you know that the way you smell can negatively affect your progress up the career ladder? That’s according to Dr. Alan Hirsch, a neurologist at the Chicago-based Smell & Taste Treatment and Research Foundation. People have emotional responses to odors. Unpleasant odors cause aggression and pleasant scents influence people to be happy. Duh!

Reminds me of the old wag who observed, “Elevators smell different to short people.”

The rumor mill is buzzing about a lawsuit filed against Dunhill corporate by many disgruntled Dunhill franchisees. Stay tuned.

Whitehead Mann, a key big-ticket player in the UK retained search market has recently tried to enter the US market. According to reports, they failed in this strategy causing their shares to drop more than 35%. The author of the news article, Saeed Shah, explained the world of high level search as follows: “This is a world in which long-term relationships are built up with executives, who in turn use the executive search company that appointed them when they are in a position to hire others. Those relationships are carefully nurtured and maintained, providing a constant support for executives in difficulty. New candidates and old contacts are kept sweet through frequent contact, with lunches, cocktail bashes and the quiet chat over a gin and tonic, or two.” Whew, now you have the secret to success.

There has been a big increase in the number of searches for governmental and university openings. Everything from tiny town ‘city managers’ to big city police chief positions have been given to recruiters. Although the fees are sometimes lower than the norm and the problems of dealing with search committees and political considerations are always there, this is a huge potential market. Recognizing a void, as well as a unique profit opportunity, Korn/Ferry recently opening a Dallas-based athletic director search division to handle senior-level athletics administration talent at colleges and universities. And they hired recently retired University of Tulsa president Bob Lawless who has been chair of the National Collegiate Athletic Association. Talk about one of the top insiders as your rainmaker, especially since fees will most likely be no problem for deep-pocket alumni jocks.

But one governmental search recently ran off the track. PAR Group was engaged by Kansas City to find a new director of the city’s Finance Department. After wading through 81 applicants and winnowing it down to seven finalists, an offer was made and accepted. Shortly before the start date, the successful candidate emailed the city HR director to tell him he won’t be showing up as promised. Found a better job in Georgia. Back to square one for PAR and Kansas City.

But there’s good news too. According to WebProNews, when Google hired Heidrick & Struggles to staff some key openings, as a part of the deal H&S had obtained warrants to purchase approximately 1.2 million shares of B common stock of Google at a price of $0.30 per share, which it received in 2001 in connection with recruitment fees. According to reports, H&S bought the shares recently, then monetized them 30 days later for a whopping $128.8 million profit. Fifty five percent of the profits will go the consultants involved in the search efforts. What a payday!

Below is a list of statements I’ve gathered over the years. They can all be answered with a True or False answer. Give it a shot and I’ll begin to answer them all over the next few months. You may be in for a few surprises.

1. Consultants who don’t make at least 50 calls a day are destined to fail.

2. Retained recruiters make much more money than contingency recruiters.

3. Temp firm billings far exceed permanent placer revenues.

4. Retained recruiters never advertise.

5. The Americans with Disabilities Act doesn’t impact on the recruiting community.

6. Computerized firms rarely have better production than non-computerized ones.

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7. Big billers are just luckier than mediocre ones.

8. The best marketing tool is a well-written brochure.

9. Our business is better off in states where we are regulated than in those where we are not.

10. The “but for” collection method is the law of the land.

11. A consultant with a good personality is better than a well-trained dullard.

12. The basic difference between contingency and retained search is the process by which the search is performed.

13. Client visits are a waste of time.

14. Clients tend to bond more with recruiting firms than the consultants who work for them.

15. Higher consultant commission rates produce more production and happier consultants.

16. The weakest link in the placement process is the candidate.

17. Companies should always place want ads or Internet postings before contacting a recruiter.

18. Clients won’t review coded resumes.

19. CPCs make more money than non-CPCs.

20. It’s OK to code minority applicants as such.

21. Recruiters should always inform fee-avoiders why they’re legally entitled to the fee before taking them to court.

22. Offering discounted fees brings in more business.

23. Accepting a discriminatory job order is OK so long as the company giving it to you is operating under an affirmative action plan.

24. The first recruiter to submit a resume to a company is entitled to the fee if that person is ultimately hired.

25. Errors & Omissions insurance is a waste of money.

26. The greatest placement opportunities for the balance of the decade exist in the overseas market.

27. Companies who grant “exclusives” to contingency recruiters are liable for a fee if they hire through another source.

28. Some recruiting specialties are more productive than others.

29. Getting fee agreements signed is counterproductive and not worth the trouble.

30. Government-generated statistical information is the best way to determine those areas upon which to focus.

31. Clients will always hire the best person for the job.

32. Having a more liberal guarantee policy will produce more business than having a stingy or non-existent one.

33. You have no liability if a company hires an undesirable candidate from you.

34. Other sources for candidates are always less expensive than recruiters.

35. If a client sends you a check for less than the full amount of the fee, it’s OK to cash it as long as you mark it as “partial payment” before you deposit it.

36. The best time to terminate a consultant is when you first think about it.

37. There is no difference between billings of solo practitioners and those who work for more traditional multi-consultant firms.

38. Blending other ingredients into your service mix rarely works.

39. The best judge of candidate referrals is the Human Resource department.

40. Most companies are reorganizing their operations and hiring temps rather than permanent employees.

41. A majority of recruiters belong to associations or networks.

42. Candidates are more truthful to recruiters than to potential employers.

43. Recruiters who do their own research are more effective than those who use researchers.

44. Openings that are advertised are your best source of new business.

45. Relocation costs make no difference in hiring decisions.

46. Consultant non-compete contracts don’t work.

47. Placement and outplacement can’t co-exist.

48. It’s best not to tell an employer of a bad reference check.

49. The best way to judge the economy as it affects our business is the news media.

50. It’s easier and better to treat your consultants as independent contractors than as employees.

51. Part-time recruiters can do more harm than good.

52. Ours is primarily a minimum wage, straight commission business.

53. The best and quickest way to source candidates is by ruse calling.

54. Almost any attorney who is conversant in contract law can handle fee collection cases.

55. If a consultant places himself on a job order, you lose the job order, the consultant and the potential fee.

56. Trade secret litigation against an ex-consultant who you treated as an independent contractor is almost always successful.

57. Offering a replacement guarantee will protect you against having to refund money for a fall-off.

58. Consultant employment agreements should be individually tailored for each consultant.

59. Our business is best described as “consulting.”

60. Companies usually refuse to work with recruiters who won’t sign their Personnel Service Agreements.

And finally, last month, reader Aaron Wandtke asked for suggestions for gifts for recruiters. Tim of Penn Hill answered, “Last year I went to a local book store and bought a variety of instructional and self help books. Each one was purchased for a particular ‘weakness’ that they had identified (without knowing the master plan). The range of books were from “Fierce Conversations” to a one year subscription to TimeMagazine. I had a younger recruiter whose vocabulary range was weak. Hisattention span was very short, so to buy him a book would have been a wasteof effort. The magazine turned out to be a way he could spend his time inthe ‘library’ reading well written conversational style articles. All in allit was money well spent.”

Paul Hawkinson is the editor of The Fordyce Letter, a publication for third-party recruiters that's part of ERE Media. He entered the personnel consulting industry in the late 1950's and began publishing for the industry in the 1970's. During his tenure as a practitioner, he personally billed over $5 million in both contingency and retainer assignments. He formed the Kimberly Organization and purchased The Fordyce Letter in 1980.

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