- I will do whatever is necessary to make the Year 2011 the best year of my career. I will divest myself of those activities that will not promote this objective.
- I promise to appreciate that, while my efforts will primarily affect my personal income, I am a part of a bigger picture and will do what I can to help my colleagues and my employer as well.
- I will approach every day optimistically, expecting that my activities will produce positive results rather than believing they won’t.
Articles by Paul Hawkinson
Editor’s note: Going back through some of the Fordyce Letter archives, I discovered Paul Hawkinson’s resolutions for managers for the year 2004. As you will read, these resolutions are timeless and certainly apply today as much as they did seven years ago. I proudly share them with you today as part of the Best of Fordyce – may they inspire you to make 2011 your best year yet!
- I will do more for my productive consultants and less for those who are just taking up space
- I pledge to set optimistic, but realistic, goals for my firm and my consultants.
- I promise to stop listening to economic doom and gloomers and other assorted naysayers.
In each new issue of The Fordyce Letter I like to include feedback from the subscribers and the community at large about what they are seeing in their day-to-day lives.
I would appreciate your feedback on the following topic, and will be using it for an upcoming article in the June issue of The Fordyce Letter.
No one can actually tell whether we’re in a recession, about to enter a recession or have already had one and are pulling out of it. Most of the conversations I’ve had with readers indicate that there has been little or no impact on the recruiting business. This may be because there are a number of specialty areas that are recession-resistant.
My question of the month is simply this:
How have you noticed the economic chatter affecting your recruiting business? How do you think the recruiting business will be impacted between now and the end of the year and how do you propose dealing with any real or projected outcomes?
Leave responses in the comments – or email me privately at TheFordyceLetter@aol.com with or without attribution and we can get a discussion going between us all..
Thanks and I look forward to hearing from you.
It appears that this year’s Fordyce Forum to be held in Las Vegas from June 4-6, 2008 is the place to be based upon the large number of people who have already signed up for the event. Although I was gratified at the number of attendees at the inaugural Fordyce Forum last year, the number already signed up for this year’s forum has already exceeded the total number of the first one in New Orleans . . . and the number continues to grow every day.
At some point in the very near future, we will be unable to accommodate everyone who wants to attend so if you haven’t made your reservations yet, I implore you to do so today. Go to: www.fordyceforum.com
On February 5th of this year, although I felt pretty good for an old codger, I succumbed to the entreaties of my wife and daughter and went to see a doctor â€“ something I had not done for 25 years except for a broken arm in 2006. On February 7th, they wheeled me into an operating room, cracked my sternum like an oyster and performed a bypass on three of my coronary arteries and fooled around with a roto-rooter job on a fourth one.
While bypass operations have become almost routine, the whole experience gave me a new reverence for the word “fatigue” and a new respect for the restful wonders of recliners.
Since I was out of commission for quite a few weeks, the crack editorial staff of ERE Media did a magnificent job of producing the March issue of TFL in my absence. The only omission was the Placements & The Law column which resumes this month as our cover story.
I only informed a few people of my plight but it must have been a slow news week in Recruiterland because I received hundreds of Get Well cards, flowers, plants, Emails, calls and notes from well-wishers who somehow found out about my predicament. Alan Schonberg sent me an Email description of his bypass surgery from a decade before and what I could really expect. God bless him, he was right on target with information that was based on reality rather than some hospital-published brochure. Perhaps my biggest surprise was an unannounced visit from California-based Jeff Allen who detoured from a lawsuit he was handling in Louisiana through St. Louis to make sure I was still alive and kicking. What a friend.
How can I ever thank the hundreds of folks who actually seemed to care enough to send me their good wishes for a speedy recovery? I am a lucky man! I know who you are and you know who you are. I will be in Las Vegas and hope to thank all of my well-wishers personally.
Last year, we stopped producing our special issue on specialties since all of that information is readily available through Internet resources. Instead, we queried a number of readers about their particular niche and asked for their opinions regarding that specialty. Readers liked that format so much that we have repeated the survey this year.
Real recruiters expressing real results about their particular practice area gives a more realistic picture than the macro opinions from the marketplace in general. We appreciate the candor of respondents and thank them for their contributions.
2007 was a great year. There has been no lack of job opportunities in most areas. I see 2008 as even better. Despite the sub-prime mess, I have not received any indication from any of my clients that they will be hiring less or laying off. In fact, this year has started off with a bang.
My biggest frustration is that clients aren’t pulling the plug. I have candidates who have gone through the first or second round interviews a month ago and still no response from the client. This happens for various reasons. Change in management, they want to interview other candidates, and just plain slow moving. This is something I haven’t seen in a while. Maybe it’s just “first of the year adjustments”. I don’t know, but it’s hard keeping candidates, and myself, interested in these positions and companies. Even my candidates have complained about it with jobs they are interviewing for that didn’t come through me. They wait and wait to hear back from employers.
Susie Yager, President
Career Consultants, LLC
Our office has two areas that we specialize in: Traditional banking, which covers mostly higher-end revenue-generating positions, and wealth management.
Both areas were very strong in 2007, experiencing record growth. We expect a similar year in 2008 but with some concern. The effects from the sub-prime lending area will probably have a trickle-down effect on our markets. The business will still be there for sure, but there won’t be as much low-hanging fruit like we saw in 2007. Our business plan for 2008 reflects this so we are prepared (just in case).
We specialize in Food and Beverage manufacturing. 2007 was a good year and right in line with the previous few years. The clients we have had for many years kept us busy, so I don’t have a great feel of the entire market. I expect the same companies will continue to give us all the business we can handle.
We did work a little with some new companies in the industry last year. We continue to see some companies request lower fees (20% is becoming a more common number, although we turn down everything below 25%). These same companies are very rigid with their process. They aren’t as warm to the candidates and they don’t value the recruiter. Each year we see companies working harder to avoid paying a fee – meaning they are trying to fill it on their own before contacting us.
One of my frustrations is receiving job orders from affiliate search firms at 20% (I have seen some lower than that) – and I already have the job at 30%. If that firm is making money at 20%, more power to them. However, it isn’t healthy to our industry. I have found that in the cases where I have the positions as well, we fill the jobs – and the other firms don’t. Just because a firm offers a lower fee doesn’t mean they provide the same service. This can sometimes be very difficult to explain to a company. As you know, when some firms offer a 20% fee, the industry starts asking others for the same fee.
Relocation is becoming a major issue. Candidates are worried about having to sell their homes in a sluggish market and the possibility of having two mortgage payments. Companies are being asked to pay sign-on bonuses if they don’t pay Realtor fees. Companies that aren’t willing to help more than normal are losing good candidates.
Name withheld at request
Almost five decades ago, I was a personnel guy for a St. Louis-based Fortune 500 company involved in consumer products and defense activities. I was the technical staffing manager for the defense side of the business. Life was simpler then. The whole personnel function consisted of me, my boss, and two secretaries – for all five of the plants working in the defense bailiwick.
We had a plant in Southern Illinois where manufacturing and assembly of explosive devices were done. Every couple of weeks, my boss received a list of from five to 20 people who needed to be fired, and since he was the boss and I wasn’t, guess who got the job of driving the 150 miles to be the hatchet man? Yep! It was me.
The plant sat on about 200 acres of ground with a security checkpoint about a mile from the actual plant. As soon as I showed up, the guards would get on the phone to spread the word that ‘the terminator’ was here. I wasn’t very popular.
I had my list and I had my job, so when an employee’s name was announced over the intercom to come to the office, the secret was out – and so were they. I can’t tell you how many threats I received, but that’s a whole other story.
What brought this to mind was a story in the November 2007 INC. magazine about consultants who can be hired to fire client personnel. This is not one of the alternative revenue sources I had considered when I wrote about other options for revenue enhancement. But why not? Nobody enjoys firing people, so why not outsource this nasty job?
In 1994, trainer, speaker, and author Steve Finkel wrote the first version of the book Breakthrough! How to Explode Production of Experienced Consultants, an attractive hardbound book written not only for rookies but especially for the under-producing veterans who, even today, overpopulate the recruiting and placement profession.
I reviewed the book then and gave it two thumbs up. It was different from much of the material that was then available and covered almost every facet of the business in a matter-of-fact manner that reflected the realities of the business as they existed, written in Steve’s attention-grabbing and breezy style.
It became one of the industry’s best-sellers and has gone through several reprintings since originally written. During the intervening years, Steve has produced DVD products for both new and highly experienced people and CDs for managers of recruiting firms, extensively lectured and trained on five continents, and switched his personal focus from public speaking to in-house training.
Now, after many months of work, Steve has completely revised and updated Breakthrough! How to Explode Production of Experienced Consultants. During the past 14 years, the industry has evolved. Steve has recognized and tracked this evolution and changed with it. This 400-page book is a remarkably inclusive training manual, and according to many, it has been responsible for dramatically increasing production for those who read it and followed its tenets.
Even the best books will serve no purpose if they are not read. Relegated to a bookshelf, they are nothing but ornaments; but even “nonreaders” will find this to be an interesting read. Breakthrough! moves along quickly; broken into segments, clearly written, with interesting relevant examples, it seems almost to be light reading – until you realize how genuinely on-target it is.
As an editor, I receive many books every month. Most are scanned, but for the most part, they go unread past the first chapter or so. Even though I had previously read Steve’s first edition, I was compelled to read Breakthrough! from cover to cover. Even this grizzled old veteran of the recruiting wars learned a few things, so for the cover price of $45, I heartily recommend it for every office – and even for every desk.
For the complete Table of Contents, visit www.stevefinkel.com. To order, call (314) 991-3177.
Last year, we stopped producing our special issue on specialties since all of that information is readily available through Internet resources. Instead, we queried a number of readers about their particular niche and asked for their opinions regarding that specialty. Readers liked that format so much that we have repeated the survey this year. Real recruiters expressing real results about their particular practice area gives a more realistic picture than the macro opinions from the marketplace in general.
We appreciate the candor of respondents and thank them for their contributions. As response continues to come in, we will publish more of them next month.
We are a $20M firm, approximately 50% of which is generated by IT Temp and Direct Hire. Total company revenue (IT and otherwise) was up 30% in 2007. IT Temp revenue increased 50%, while Direct Hire remained pretty much the same, the latter due to the loss of two salespeople midstream. IT Temp Hours increased 52%. We also saw a significant increase in temp-to-perm conversions on the IT side ($400K). Steve Goldshore, President – Alden Staffing
My firm focuses on three specific areas: Office Products/Office Furniture,
Technology, and Commercial Construction. All three areas had a great year with record placements! The key was to have great candidates and a trusting relationship with your clients.
2008 is forecast to be strong for our firm, with lots of good job orders to fill, definitely a candidate-driven market still. Many of our firms are asking for extended payment terms due to cash flow issues . . . salespeople (hunters) seem to be the hottest commodity. We are finding that companies are very willing to work with us, as soon as they qualify us as industry-experienced recruiters. We really need to quarterback the process and make sure that the follow-up and commitments are met with both sides. Several deals were lost due to poor follow-up on the client side!
On the candidate side, we are finding that they need to be romanced a lot more to look at new opportunities. What used to take a few phone calls can now take a month or more to pique their interest. Benefits are becoming more and more important to them with the higher cost of insurance, etc. We are bullish on the prospects of 2008! Steve Stadell, President – Global Recruiters of Lake Oswego
I worked with ex-military types who worked for subcontractors with government contracts. Top secret clearance individuals, with Lifestyle polys were in high demand. Guaranteed placement if they had that security clearance. Going rates were 20 to 25% fees. Sean C. Farrell, Recruiter
I work within the broad Energy sector with a specific focus on the Renewable/Alternative Energy subsector. This subsector within Energy is like a snowball rolling downhill. With a growing global focus on the environment and “green” initiatives, recruiting for the sector is challenging and incredibly satisfying. I expect the sector to continue to gain momentum and experience exponential growth similar to or greater than the tech boom 20 years ago. Frankly, I think this sector has everything that tech had plus the “feel good” component of doing something socially responsible. The potential to surpass the tech boom is certainly there.
Briefly, my recruitment activities are targeted to energy companies and firms that invest in the emerging technologies of the energy industry (private equity funds, hedge funds, investment banks, venture capital firms, etc.). My functional focus is finance-related roles (finance management, corporate development, mergers and acquisitions, corporate strategy, treasury, etc.).
I have had no resistance to my services and have had no resistance to fee arrangements (standard is 30% of base). As this is a subsector in its evolutionary infancy, there are few people that have deep experience. So recruitment has been focused on people with a passion for the environment, people that have traditionally participated in social awareness-related activities AND that possess strong academic pedigrees, e.g., Harvard MBAs that have spent time in the Peace Corps. Quentin Burchill Jr., CSAM, Managing Director, Energy – Angott Search Group
The Information Technology Practice had a particularly good 2007, especially as a new practice for Angott Search Group. The IT sector has come back full force, especially in the permanent placement area. We’ve noticed candidates are not on the market as long as previously, and we continually relay that information to customers with the intention of quicker turnaround from presentation to close. We’re also seeing an above-average number of assignments for executive-level IT openings. We’re predicting 2008 will be an even better year than last, with our client growth and candidate placement ratios continuing to rise! Peggy Campbell, Director – Angott Search Group
Downstream Oil – holding steady due to our growth in the niche, however, retail consolidation is reducing the number of company-operated retail stores that are being sold to new Americans and as such do not need our services. Brian Wright, CPC, Managing Partner – Executive Leadership Solutions
We specialize in Enterprise Software Sales and Marketing across the United States and Europe. In 2007, I saw the interest and willingness to work with our firm increase as the year went on, with less reluctance to fees. A positive trend I noticed over 2006 was less chaos on behalf of clients. We dealt with significant stopping and starting on well-qualified searches in 2006 – many clients couldn’t seem to make up their mind regarding what they needed or where, and when they did have that figured out, budgets were re-allocated or evaporated before an interview process could be completed. That trend significantly declined this year.
A negative trend I saw this year was, in many cases, hiring authorities being asked to assume greater levels of responsibility as part of their job, resulting in handing more decision making to HR people or internal recruiters. Always a recipe for disaster. I don’t expect any decline in our business for 2008, as the software industry continues to face more and more competition for talent. Douglas Johnson, President – Valor Partners, Inc.
Manufacturing, Distribution and Technology – 2007 was a mixed bag. We had many requests for contingency searches that ended up competing with not only other recruiters but internal HR as well, who used the boards for rÃ©sumÃ©s. More discouraging searches and most ending in disaster. In mid 2007, we made three major changes: 1.) We only concentrated on mid to small companies in the manufacturing sector. 2.) We only worked on the executive and upper-level operational directors with higher salaries. 3.) We went to only exclusive contingency, with a payment if it was filled internally or put on hold, and retained searches. This made a major impact on our production and made our work of value. Our fees increased from 25% to 30%, and surprisingly, we had no resistance due to the critical nature of the searches. We filled 95% of our JOs when we went to the new programs and our fees increased substantially. Our communication improved, and our control was more of a partner than a competitor or necessary evil.
We saw our client relationships strengthen, but the real challenge was with committed candidates. Most of the candidates had multiple opportunities, and we had to really dig into their behaviors and career objectives to decide whether to present to our clients. Control of candidates has been the real source of concern and will continue this way through 2008.
We will continue this business plan in 2008. R. Patrick Perkins, CPC, CEO – The Perkins Group
My specialty area is all areas of a Manufacturing business (e.g., engineering, plant management, mfg. management, HR, technical mgt./engineering, quality mgt., safety/environmental, maintenance mgt./engineering, purchasing, financial mgt./accounting, sales/customer service, etc.). My billings in 2007 were 56% higher than 2006, and I hope to retain that level for 2008. No abnormal situations. Anonymous
I have been delighted to have been asked in the past couple of years about my year with regard to recruiting in the Healthcare world, and my complaint both years has been the lack of “urgency” on the part of HR or the hiring managers to move the process along. Well, I am happy to say that they have finally come to their senses and realize that good candidates are hard to find, and they don’t and won’t wait for the long bureaucratic processes that people have in place to put them through the maze. The labyrinth is no longer there, and the path is straight to sending the rÃ©sumÃ©, setting up the interview, and hiring the candidate within two weeks. Which is exactly the way the process should be.
The candidates that I mostly place for my clients are in the director/clinical manager roles as well as shift nurses, and I had a very nice 2007, as I actually made placements and received paychecks.
Pretty simple really, but unfortunately it never seems to flow once the position has been given to me and then I send a candidate for consideration – then there is this really big black hole.
I am happy to say that 2008 is starting off exceptionally well, with seven placements starting in the first quarter of this year. All of them were submitted in December 2007 and received offers, and now we are off to the races. This is because I told them that they cannot sit, drag, log, or simply ignore rÃ©sumÃ©s that have been presented to them. The candidates won’t wait!
I am presently working on over 60 requirements for several hospital systems, and they have now learned that when I send a candidate, they are to respond within a couple of days as to their interest to move them forward or I’ll just place them somewhere else. It’s really great being in the driver’s seat for a change!!! Monica Thomson, Healthcare Recruiter – Thomson & Associates
Food & Beverage, Nutraceutical – Pharmaceutical and Consumer Products Mfg – 2007 was a better year than either 2004 or 2005; 2006 was outstanding; 2008 appears that it would be about the same as 2007 or a little better. Michael Soulek, President – Foodpro and Consumer Products Recruiters
- We focus on sales and marketing professionals only. 65% of our clients are Technology companies and the rest are b2b service or product companies.
- 2007 was a good year for us, but not quite as brisk as 2006 and 2005.
- I am expecting (and projecting!) a very good 2008, surpassing the last few years. I am doing this because I think companies have held off on hiring, keeping their staffs to a minimum, for as long as they can. They now must hire to grow their revenues. The year is starting out brisk, possibly proving my assumption.
- We are particularly constrained for candidates in the “graying” northeast states as we continue to lose young, professional population to the southeast and southwest (Atlanta, Dallas, Phoenix, etc.). Companies are seeing only a fraction of what they used to see for candidates. And, sadly, most don’t react with the speed that is appropriate in this type of market. State governments have been slow to react to this drain of population, as housing costs (and taxes) in the Northeast remain some of the highest in the country.
I continue to be optimistic about the market, the economy, and my business. I remind myself that it is possible to have a happy and successful business, no matter what the economic conditions may be. I also remind myself that it has truly been a gift to have a career where one can do well by doing good. And I continue to be gratified when I see the people that we place making themselves and their companies more successful. It’s a kick! Betsy Harper – Sales and Marketing Search
We recruit in Healthcare. Here is my assessment of the industry.
- The civilian unemployment rate is expected to be between 4.50-4.75%
by the end of 2007 and around 4.75% in 2008. In the managerial,
professional, and related industries, unemployment is at 2.1%. It has
averaged 2.43% since 2007. It is not expected to increase significantly in
- Expansion of real GDP has been about the same in the first half of 2007
as it was in 2006.
- Indications are that GDP will increase 2.25%-2.50% by the end of 2007 and 2.5%-2.75% in 2008.
- Economic activity is expected to increase gradually in 2007 and gain
strength as it goes into 2008.
- Businesses are reporting strong profits, leading to an expectation
of expanded output. This should lead to strong business investment in
software and high-tech equipment.
- International business will remain strong in 2008 as well, as demand
for U.S. exports continues to increase.
- Core inflation is currently at 1.9% and is expected to remain fairly steady
over the next three years (it is expected to average around 2%).
- Headline CPI (Consumer Price Index) inflation, incorporating rising
food and energy costs, is expected to average 2.45% over the next five years.
Staffing Industry Growth
- The place and search segment of the industry has grown by 25% annually over the past few years, but is expected to slow by the end of 2007 to 13%.
- There has been an increasing demand for retained searches. It is
projected that this segment will see 19% growth by the end of 2007.
- The retained search segment is becoming more competitive. The
traditional fee of 33% is dropping. According to Kennedy, the most commonly charged fees are presently between 26% and 30%.
- There is an emerging trend of using the temp-to-perm model, traditionally seen in entry positions, for management- and executive-level positions. We see this trend continuing into 2008. 2007 was far and away our best year.
Executive Recruitment Trends
The traditional executive search firm offering is seeing a trend toward management consulting and talent management. Search firms, typically organized into industry practice groups, are increasingly looking into offering a wider array of value-added services to increase market/client share. These include onboarding/executive coaching, leadership training, organizational development, and management assessment services.
Unemployment is not expected to rise significantly in 2008. This means that the candidate pool will remain tight and recruiters should learn new ways of recruiting candidates.
- Gen Y
- Social Networking Sites: These were the hot trend of 2007, but analysts look for a decline in the growth in 2008.
- Online Employer Videos: This is the newest hiring trend of Fortune 500 companies. They showcase the culture and the workplace, and give an insider’s perspective on the company.
- Video RÃ©sumÃ©s: These have been slower to catch on but are an emerging trend.
Experienced Managers and Non-Managers
This segment is less motivated by money than the younger employees. To appeal to this segment, employers must focus on what matters to them, such as lifestyle perks/flexible schedules, childcare, memberships, work from home ability, more vacation days, etc.
This segment is motivated by money and opportunity to induce change.
John R. Wiener, CEO – Fairway Consulting Group
Our Warehousing/Transportation desk did better in 2007 than in ’06. Our standard fee has not changed over the past five years, and we saw less resistance to fees this past year than previously. Our clients were more proactive in filling slots this past year, and have been quicker to interview, and make decisions, than in past years.
Most of our searches are at senior levels, and several were due to retiring executives. This may signal the slow beginning of the baby-boomer retirement era we are hearing so much about. There was a marked increase in the use of tests, assessments, and background screens this past year.
Several placements were lost due to overuse and excess dependence on written tests. In two cases, exceptional candidates with stellar backgrounds and references were turned down because they did not pass a popular profile assessment, even though all interviewers agreed they fit the position requirements very well. Jim Cargill â€“ MRI of Lake Tahoe
I focus solely on Legal recruiting; my firm handles all aspects of legal staffing, from attorneys to file clerks. Although we are steadily increasing revenue (relatively new firm), the last quarter of 2007 was incredibly slow – much more so than the past two years. I found it difficult to pinpoint the reason. I could only blame a struggling economy. Lynda K. Hood, Legal Search Consultant – Argus Legal
Animal Sciences is my specialty, and 2007 was the best year of my career. I expect 2008 to be even better. Anonymous
Our office has various specialties; my particular specialty is Engineering & Manufacturing. Our E&M fared pretty well, although we did a lot more long-lines recruiting than local. It appears that the SE and S in general fared a lot better for us in E&M than the Midwest. There is definitely a shortage of talent out there. All the hype we’ve heard about the baby-boomers is real. I just hope that as we go into ’08, our clients understand they need to move quickly on that sharp candidate. Outside our E&M discipline, the accounting & finance, legal, and HR appear to be holding steady. Eric J. Sedwick, C.P.C., Managing Director – The Mergis Group
DuffyGroup (formerly DuffyResearch) began as a traditional search research organization – candidate identification and phone screening. As the company has grown over the past 17 years, our practice has evolved to include pipeline sourcing and recruiting, i.e., national sales and service positions; recruitment project outsourcing, i.e., recruiting 50-100 professional positions in three to six months; in addition to unbundled executive search, enabling the client to buy the services they need based on an hourly fee structure. We are being embraced by our clients. They love partnering and identifying how we will work together; ultimately they feel we are an extension of their organizations. In addition to the key hires, they value the competitive intelligence and pipeline of professional networking we provide. Kathleen Duffy Ybarra, President – DuffyGroup, Inc.
Sales â€“ Software/Hardware – 2007 was about the same revenues as 2006. In Dallas we still see fewer excellent candidates on the market. We are able to charge higher fees – closer to 30% than we have been able to charge in the past few years. We find a number of companies paying fees for people they didn’t have to pay for even a year ago because they simply can’t find them on their own.
I don’t know where the supposed recession is, but it ain’t here. We are having a problem producing more than a couple of good candidates at a time. And we are explaining to our hiring companies that the market is slimmer than it has been in a long while. They catch on either with us or without us, but they eventually get it.
Even if there is a national “slowdown” in ’08, there are still going to be more jobs than people for a number of years to come, whereas a few years ago, we had too many candidates and not enough opportunities. Now it will be too many opportunities and not enough candidates, especially at the salaries some of these companies got used to paying a few years ago. I have to admit, these are easier problems to deal with than the ones a few years ago – but, hey, if this were easy, we’d be out of work. Anthony W. Beshara, Ph.D., President – Babich & Associates
We tend to be generalists, with a concentration in Manufacturing, i.e., most any job found in a manufacturing plant.
If you ask us about 2007, we will tell you it was a difficult year, and we may whine some. However, when we recently reviewed the facts ($$$), it was our third-best year in over 13.
We see this as a candidate-driven market, multiple offers to individuals. Our manufacturing clients have not reduced their staffing yet, and we work a lot with companies tied to the Home-building industry. Fees are stable with us in the 25% and above range.
We do have a couple of larger clients who are “outsourcing” all of their recruiting, advertising, etc., to large firms to coordinate hundreds of openings. While this new sole source can work with recruiters to fill the needs, there is limited access to the hiring authority, multiple steps to complete, and to be quite frank, not worth the hassle. Phillip Hardage, CPC – Hardage Group
Our specialty is in the Art/craft, Gift, Home, and Office Products industries. We are vertical in our recruiting, everyone from CEO, CFO, sales, marketing, a lot of product development people, art directors, sourcing professionals, etc.
We have seen so many investment groups buy many of the companies, creating megagroups of companies. Consequently, they are creating “one” company with one staff and downsizing many of the staff from those companies acquired; they are calling it “reorganization” – thus leaving a lot of talent on the street, so to speak.
Another interesting twist to all this is that the investment companies coming in are not truly familiar with the industries, so they are hiring and ask to hire talent from “outside” the particular industry. They are also bringing in their own talent to head these acquisitions.
In doing this, many investment groups are getting rid of the innovation/product development and creative teams that have helped lead to new products (consumers want more and more, new and newer, faster and faster, so the shelf life of a product is shorter and shorter). Thus, with no new products in the pipeline, many of these new conglomerates are facing difficult sales and [lower] profit margins [than] they saw while doing their due diligence before purchasing the companies.
There are fewer companies to recruit for now, because what were three companies are now one. However, on a bright note, we see more and more entrepreneurs emerging in these markets, which will grow the industries and businesses for the future.
However, the fees remain the same. We are asked for discounts but do not give them. Luckily because of our specialty markets, we are well known and positioned – at this point. Gail Czech, President – The Creative Network, Inc.
Food Industry – down as they struggle with costs. Chemical Industry – stable. Anonymous
We specialize in Accounting/Finance, Information Technology, Administrative, Human Resources, and Sales/Marketing/Advertising.
All of them were very strong. The only problem we had was finding enough good recruiters to cover all of the market. Jerry Hellebusch – Morgan Hunter Companies
We are a firm specializing in the Food and Agribusiness arena. With the interest in renewable fuels, the business opportunities in either ethanol or biodiesel, and even with difficulty of financing new plants, business is booming.
Candidate availability is a problem on one hand, if they require degreed engineers, They are indeed hard to find, but many practical companies are finding and using non-degreed candidates with relevant experience in the field. Many of these candidates are able to make operational contributions more important than those of the inexperienced engineer. We have been able to place good non-degreed candidates that were trapped a couple of years ago.
The larger companies are trying to force down the fees to 25% but are having difficulty filling their positions. Why work a 25% fee when you can make a 30% or more with the less recognizable firms?
As always, the HR department is the problem, so you have to sell the hiring authority and let them be the lead in dealing with HR, and usually the HR department backs off.
The biggest change we have seen in the past couple of years is the increase in salaries; some categories have seen double-digit increases per year, which causes companies problems in how to keep their old employees happy and still be able to attract new talent.
We feel that 2008 will probably be the best year yet. The country has full employment, the baby boomers are starting to retire, the border is headed toward being closed, the war is being won, the economy is the best in the history of the country, and the Democrats don’t have the strength to increase taxes. All is well. Don Smith, President – Smith Brown Jones LLC
Approximately 82% of the firm’s placements in 2007 were in the upstream oil & gas energy operating company niche, mainly in engineering and geoscience fields. That was up from around 68% in 2006. The remaining 20% or so was mixed in the areas of Chemical/Petrochemical and Civil Infrastructure markets.
We are about 30/70 modified retained/contingency and are expecting that mix to come closer to 40/60 as we mature as a firm and our clients become more educated as to our level of performance to their benefit under modified retained vs. contingency. It’s still very much a candidate-driven market, and we see no downturn at all in hiring for 2008. We command at least 25% fees minimum, with many at 30%; one firm has intimated paying 40% on very difficult and critical searches! (Still waiting on that one). We fail to understand why other recruiters in one of the split networks we belong to are bowing to fees as low as 17%, with many at 20%, when we are at one of the best times in terms of hiring I’ve seen since I started as a recruiter in 1996. Dave Mount – Onesource Professional Search
As you know, I deal almost exclusively with Ad Agencies and have for the last 12 years. I am pleased to say that business was good in 2007. Not rip-roaring good like ’99 and ’00, but an improvement over the last several.
The one thing I’ve noticed, which is a disturbing trend for us at least, is the increasing use of HR people and departments getting between us and the decision makers. I have enjoyed working closely with presidents and creative directors of medium-sized agencies, but as they become busy and busier, we have to deal with HR people who, while touted as competent and professional, rarely are. I’ve severed ties with several longtime clients because it wasn’t worth it to reeducate another HR person in the nuances of hiring – again. They don’t know what their bosses are looking for and won’t admit it. Give me an HR person or anyone that does what they say they’re gonna do and I’m happy, but they are few and far between. Guy Tucker – Ask Guy Tucker, Inc.
We do about 90% legal placements and some accounting and administrative.
The first half of 2007 was fairly decent. The last half bombed. I am ready for 2008! Clients are extremely particular about the experience they require (examples: three years oil and gas title attorneys & paralegals with title opinion experience and no one who has worked for certain oil & gas companies – conflict of interest; or three to five years’ experience as an ERISA legal secretary, etc.). We constantly struggle to get our fees to 15% for legal secretaries and paralegals. We have been somewhat successful in getting our fees to 20% for attorneys – with a hitch: placements 1-2 20%, placements 3-4 18%, placements 5-6 16%, etc.
I have been doing recruiting in my city for 20 years and started my niche in legal about 8 years ago. Since then I have seen an influx of staffing services that started specializing in legal. Our biggest challenge (which I know should not be a challenge, given my years of success in this field-but) is not necessarily dealing with firms that are reluctant to deal with recruiters, but that many of our competitors “give the farm away.” They charge anywhere from flat fees of $2,500 for legal secretaries and paralegals and $4,500 for attorneys. Many are still at the old 10% we were forced to work with during the most difficult days of this past recession. I understand that the client should be happy to work with me and not be concerned about the fee, I could do a better job of selling my abilities, yadayada, but reality check here – many services are giving it away, so why should they pay us more? Anonymous
Sales & Sales Management. 2007 – great year – much demand – could be and needed to be more selective with potential clients. 2008 – looking just as good if not better than 2007. Anonymous
2007 was a particularly good year for me, and I anticipate and am planning for a stronger 2008. I am a solo practitioner and focus exclusively on Healthcare Executive Leadership/Management positions.
I am growing my business and have added one new search consultant and plan to add two more this year. I do face reluctance, but that is just the business. I just go find someone who wants to be educated on what a good search should look like and stay away from contingent search as much as possible. I do not anticipate any decrease in my business this year or next. Although finding good candidates who will relocate is my biggest challenge. Mike Harbour – Harbour Resources
We have a small perm division in our company consisting of eight recruiters. The bulk of our business is temporary staffing. Our primary business is in the areas of Accounting, Engineering, and Construction Management. We do, however, have some clients outside that arena in Banking and Oil & Gas. We had a strong 2007, with our highest producer billing around $350K. Our year is starting out well, with three placements on the books the first week of the year. Our average fee is around $18 – $20K. Linda K. Jordan, President – LK Jordan & Associates, Inc.
Banking & Financial Services. Our Banking & Financial Services practice serves a variety of banks, savings banks, mortgage banks, credit unions, insurance companies, and other financial services companies throughout the nation. Our financial services practice provides search assistance in all of the following areas: executive management, corporate banking, wealth management, insurance, bank operations, retail banking, mortgage banking, and all aspects of accounting and finance.
Over the last few years, the banking industry has experienced explosive growth. As Wall Street takes a different stance on the banks and the subprime debacle of 2007, we are starting to see some weaknesses in the community banks and regional banks as they fight to stay competitive. Loan losses and credit quality have suffered, creating a need for more experience in commercial lending and credit administration. Several years ago the large banks stopped, in large part, training in commercial credit skills; this has created a commercial lending candidate pool made up of primarily “hunters.” Nearly all of our clients will consider hiring top commercial lending talent whether they have an opening or not, especially if this person has had big bank credit training.
The next threat to our business is the looming retirements coming in the next three to five years. Several sources have put the number in the 1,500 mark over the next couple of years. Some would argue that this will make it a field day for recruiting in the banking business; others believe it will require better and more advanced recruiting presentations to overcome objections. This has created an unprecedented demand for top talent. We expect this demand for top talent to continue as more people near retirement age.
With respect to fees, we have seen it all over the last five years: flat fees, graduated fees, revenue-based fees, and research-based fees. For the most part, fees for contingency work in our banking practice average 27%, while retained searches have had a flat fee based on the high end of the compensation range. The research-based fee structure is gaining popularity with the big banks as they look for ways to reduce their active “search” fees. Our clients have recently engaged us on other service offerings such as name generation, compensation analysis, employee assessment, and director-level training. We believe this type of service offering will become more prevalent as the search business continues to evolve.
We expect 2008 to be a good year for our Banking practice, even though we expect to see more mergers throughout the United States. The demand for top talent and the increase in new bank IPOs will balance out the challenges in the big banks. Our group is aligned by both specialty and geography. This allows our search consultants to get to know their marketplace in the same way a banker understands his/her marketplace. Brian Rhonemus – Angott Search Group
The most interesting thing that happened in 2007 was a new approach to marketing. One of our longtime clients turned their back on us because a person we placed in a key position left after 10 months. Another client hired a recruiter that refused to return phone calls or give critiques on candidate submittals. We started what we refer to as “Heads Up” submittals.
This is a brief email on a candidate that should be of interest to the targeted client: “An interesting candidate came to us on a retained search. He/She has a . . ., etc. Please let us know if you would like to see the rÃ©sumÃ©.” After a couple requested rÃ©sumÃ©s, we have both clients back in the fold. We are also starting to do the same with candidates with a good story to tell, and with some success. Tom Udulutch, President – Markent Personnel, Inc.
Pharmaceutical and Medical Device. Pharmaceutical fared well in 2007, flat market going into 2008. Big pharma dominates the scene by purchasing the smaller players. Big pharma buys innovative new pipelines by buying small companies vs. from their research labs. Lots of big pharma outsourcing to lower-cost alternatives (contract research, contract manufacturing, India and China). Medical device industry still growing strong and is beginning to brand. TV is now advertising “I want my new knee to be one made by Stryker or Zimmer specifically for women.” We knew it had to come to this with the boomers aging.
Our fees range from 25% to 33% (average in the 27%-30% range); base salary only is a common give-away (about two-thirds of the time). Clients want your Impact Players (MPCs in old terminology) and don’t much care whether you have a prior agreement or not. If you have an impact player, you can usually sell him/her 50% of the time. Doing a full search seems to be going by the wayside – you either have an MPC or you don’t . . . “don’t bother me with a search.” There are still the 20% only fee clients (one firm sent a scathing letter out telling all recruiters it is 18% or no deal, 10% for multiples; I use them as a target company now). Some 20% firms are becoming pliable to 25% (our bottom). There’s a lot more reluctance to start a relationship with a new recruiter. HR has to work to do this, so those still selling to HR will be hurt first and worst (there is too much solitaire playing with soft music going on in HR).
My sense is that the economy is slowing down in the United States and that 2008 will be harder than 2007 for many recruiting offices. I think employers are starting to “hunker down” and some may even freeze hiring for at least the first half of 2008. Our recruiters are having more difficulty getting fee agreements (me included). Moving into contract staffing has been a benefit to our office and will continue to be in the future. Moving from contingency to retainer may be another option, but I like contingency and the ability to fire clients, and I don’t want to be chained to a bad retained search. Our biggest challenge is finding good recruiters – it takes 10 to find one who has the moxie to last past one year. Donald D. Bell, President/Owner – Shore Consultants
We specialize in Information Technology and are what I classify as a boutique firm.” We do approximately 40% of our business as retained search, the other, of course, contingency. We do no contract to hire, try-buy, or temporary work. Our website at www.bestgroup.us has case studies of some of our work.
Even after 10 years in business, being well known and well connected into our client base, it remains a constant struggle. Firms don’t want to pay fees, contingency searches are almost always for tough-to-find talent, and the decision processes are dragging on and on. Three interviews for programmers, more phone screens than ever. We have had back-to-back record years, but we earned every dollar. One client hired seven people and now they’re cutting staff this year. The rust belt markets don’t need bad economic times to add to its issues. We see a fair 2008 at best and are preparing for the slowdown. We are hoping for more split business this year through NPA, exporting people from here for better markets. David L. Schenk – Best Group Management Consultants
I recruit in the areas of Civil Engineering and the Environmental industry. 2007 was a bit slow. I found the changing housing market to be the major factor.
Job orders are still on the strong side, but the availability of candidates in the California market has changed. The candidates are telling me that they’re reluctant to relocate within California because they can’t get a decent price for their homes. Candidates who do try to sell can’t make a quick break for a relo because their homes are on the market too long. Also, candidates from out of state are reluctant to relo to California because of the cost of living and the housing market in particular.
There are quite a few engineering firms that did most of their business in residential and commercial business that are downsizing, closing (or selling) some offices, laying off employees, cutting back on recruiting costs, etc. I smell a recession. Kathleen (Kate) Soga – Gold Rush Recruiters
I have been a recruiter for many years in a mix of areas, but for the past 17 years my specialty has been in the Computer Entertainment area, most specifically in the Computer Game industry. As you can imagine, I have seen many changes in this industry – the advancements in technology and the need for more highly skilled engineers and artists and designers who can create “mega” hit games with huge multimillion-dollar budgets. Although I did have a reasonable year, it would be considered poor in comparison to those years past. There is a huge shortage of talent, and you would expect that this kind of situation would be good for me as a recruiter, but it was not the way the year went.
First of all, the cost of doing business for the developers and publishers has been targeting the cost of recruiting. I am an independent contingency recruiter. The tendency has been to go to contract recruiters based in-house, or sometimes they work remotely, but they get paid as if they were on-site. It seems that retained searches are more popular as well but still a hard sell, and most always the employer wants to know up-front how much the project will cost.
I am currently waiting to get to the negotiation stage with a new start-up that expects to hire 10 to 20 people in the next six months. I have yet to see a list of the positions or the budget for salaries so I can project the time it will take for each hire. Sigh . . .
Another quirk of the current market is that we are feeling the crunch of the real estate/housing industry sag. In the industry of making games, these people move from studio or publisher to studio, and these places are all over the world. Generally I just handle the United States and Canada, but I’ve even had positions in Australia, England, Japan, and even Korea. Actually I even had an assignment in India some years ago.
My potential candidates are concerned about housing and cost of living. They may want and even need to move to another place, but because of fear that they cannot sell their homes or that the cost of living in whatever area they want to relocate to is not going to be compensated with a large rise in salary, then there is hesitation to actually make the move even after all the hoops have been jumped through.
In the old days, these games were made by creative folks, mostly engineers, who were self-taught and sometimes considered “hackers,” although that term is ancient and definitely does not fit in the scene today. As the games and various platforms or game machines became popular, and as the sales grew and more attention was paid to our industry by the money people and “suits,” and, of course, as technology became more and more specialized and evolved, the need for educated and trained personnel grew. It was hard enough to get a job in games before because the industry leaders wanted to have only experienced people with game-making credits. These studios and publishers closed their doors to what we call “newbies.” Schools were formed to teach potential talent how to make games, but for many reasons, these places have not been able to meet the needs of the employers. This is a whole different subject . . .
So the industry, by refusing to allow new talent to enter, now has created its own monster. The old teams of veteran game-makers are leaving for a more stable environment or they are now heading their own companies or have moved out of the actual making of games. Now there is a very large slice of the talent pool missing.
There are very senior people or very junior people, but the middle, ah yes, the middle, the workers, the people who do the grunt work, who do the code or the art work; the ones who work the line, so to speak; those are the missing cogs in what should be a well-oiled company.
Now let’s talk about the mergers and the buy-outs and the new studios that are popping up all over the place. There is a lot of money floating around out there, and the computer game business is considered, by some, a glamour industry. In the past 17 years, I have watched the video games specialty divide into PC games and console games and casual games and massive multiplayer online (MMO) games and games for the cell phone and edutainment and coin op and, oh, let’s not forget serious games. Yep, I have a couple of clients that make games for the Army and for the Navy and Air Force and such like that. There was a time when I could go to the game developer conference and know maybe 50% of all those attending, but now, whew!
Finding clients and job openings is not a problem. Finding candidates who are serious about checking out their future – now that is the challenge. The old ways of communicating are harder. Everyone wants to work by sending emails, and call me old-fashioned, but the best way to communicate with someone is voice-to-voice. I rely on referrals and LinkedIn and various other techniques. I do not use the boards those rÃ©sumÃ©s are old and used and mostly a waste of time.
My fees are at 20% of base and have continued for as long as I have been in business. I would like to raise them, and I absolutely refuse to lower the fee. I have more open requisitions than I could fill in a lifetime, so if someone does not want to pay me the fee I have requested, then I will not work for them. I do not ever begin an assignment without a signed agreement. The worst client is usually a huge company such as Disney! Yep, they are a very slow pay and you have to fight for every dollar. I will not work for them again. My guarantee is 90-day, prorated when I can get it. Otherwise it is just a 90-day guarantee.
I had many offers to candidates this year, but I had more turndowns and low-balling of salaries than ever before. I have analyzed this over and over, and it just seems like 2007 was a weird year. My predictions for 2008 are good.
The contract recruiters are not able to fill the internal positions. The hiring managers are now starting to call me directly again and asking me to help them and skip the HR middleman. I have been open to sharing with other recruiters, and I have been training a couple of new potential recruiters who want to work in different areas other than games. Some of the recruiters in the game business have formed an association – PEER (www.peer-org.com) – and we help each other whenever possible. It has been a good experience. Jill Zinner – Premier Search, Inc.
Slone Partners specializes in recruitment and consulting services within the Diagnostic Laboratory industry. Our revenues went up 53% in 2007, and we expect them to double in 2008.
Slone Partners operates a bit differently than most search firms. Our recruiters only recruit. Our researchers go through our database and then also source candidates – so that they provide qualified, interested candidates to our recruiters. Our recruiters do not go after new business, but they build solid relationships with our existing clients. While I am not sure that this method would work for everyone, it has worked for us.
We are also a virtual company, which has been tricky at times. However, this has enabled us to cut back on many costs, and contrary to what you would think, our turnover is extremely low. We end up providing an environment that today’s employees seem to want – particularly working moms. You need to hire experienced, savvy, self-motivated people for this to work. Adam Slone, President/CEO – Slone Partners
My main area of specialty has been in the IT Power and Cooling arena. My specialty was red hot due to a combination of natural industry growth and incredible upheaval that occurred when a few of the major players in that niche merged. Although I had about 15 exceptional months in a row, I see things cooling off for me because an incredible influx of candidates from the telecom industry is emerging, due to the well-on-the-way collapse of that industry. Because point of call and technologies are so similar in telecom and IT, I expect the IT hardware companies to perceive a lesser need for search firms because they will have an easier time obtaining talent on their own.
VC funding in Solar Energy, other Alternative Energy sources, and Pollution Controls will increase in order to take advantage of the available talent that will flow in from telecom, combined with ever-increasing global and consumer awareness of these issues. That will happen toward the end of 2008 and beginning of 2009. There will be increased demand, lower supply, and the need to separate high-quality people from deadweight, who will all be coming in from telecom. This will increase the demand for quality search professionals. Those industries will be as hot as telecom and datacom have been, and what RF was before then. Steve Kohn
Based on our analysis, we transitioned back into Oil & Gas and Aerospace/aviation in 2007. Having been involved in recruiting and outplacement since 1986, we have worked with these industries in the past, so it wasn’t as if we were adding a new specialty, just moving areas of specialization back to the front burner that we successfully worked in past years.
As a retained or partial retained search firm, we focus our oil and gas work toward mid- to senior-level management positions, as well as particular disciplines such as engineers, geologists, landmen, and oil & gas accountants (especially those with S&B experience). There is a great demand for experienced top performers in these areas, and from all indications the trend will continue throughout 2008.
Our emphasis on aerospace and aviation focuses mainly on engineering and management positions. Based on our conversations with client companies, we expect steady growth in these areas throughout the coming year.
Obviously, the individuals we are seeking aren’t usually actively looking, so the heart of what we do involves identifying and recruiting highly qualified professionals for our clients. At first, we hit resistance from prospective clients, but once they figured out that the talent pool wasn’t that great, they became more receptive to paying our fees. One of the biggest obstacles that we’ve been able to overcome is having to work through an HR gnome on professional positions. This is one reason we developed a 12-month guarantee on candidates in certain fields; one of the conditions is that we work directly with the individual to whom they will report. Robert Hidde, Managing Partner – Hidde Career Services
I work in the Healthcare field specifically recruiting mid-level providers including physician assistants and nurse practitioners. I have been in this specialty since the early 1990s, briefly moving to IT recruiting in the late ’90s, when the mid-level market almost died because of a glut of new graduates.
Last year was one of the best years ever, with the market returning strongly. There are lots of job orders with employers eager to hire. Flat fees are usually favored over percentages. As with most specialties, employers can identify those of us who have been doing this for a while. Still, there are lots of inexperienced people slinging rÃ©sumÃ©s of unqualified candidates, wasting employers’ time and losing their shot at any credibility.
The new year seems just as strong. Salaries are rising because of increased costs, which some employers are having a difficult time handling. There is some candidate reluctance because of increased gas costs and inability to quickly sell homes. Ray E. Smith – Smith & Associates Health Care Placements
The McIntyre Group has been in business for 22 years, specializing in consulting and permanent placements in the following areas: Corp/Admin, IT, Accounting & Financial Services, and Creative. We opened Creative this past year; all other groups have been open for many years or the full duration of our firm.
We had a 20% net profit increase in our business last year due to a great economy in the Fairfield County, Connecticut, marketplace and the Greater New York marketplace. In our admin/corporate practice group, our perm business was flat, but with aggressive streamlining and margin increases we pushed our temp admin group up about 25% from last year. We also stabilized and monitored our costs more aggressively. Our perm accounting and financial services was remarkably strong, but I anticipate that this year the downward spiral will start for the financial services sector.
I won’t kid you. I am worried about 2009 and 2010 more than 2008 for this particular part of the United States. I am going to work very hard this year to button up and aggressively push and train my staff. “Lean and mean.”
As far as unusual things, it was a very normal good year for us. We continue to have clients that try to push their unrealistic confidentiality and liability fee schedules on us – which we decline or rewrite – but we have seen a dramatic decline in this. Perhaps we are getting a reputation!!
And candidate availability continues to be a challenge, so we continue to increase our recruiting efforts. That will always remain a challenge, but one that we welcome. Leslie McIntyre-Tavella – The McIntyre Group
I continue to be a manufacturing generalist. I work with four or five clients at a time and tell them to give me all their hard-to-fill roles whether they are engineers, manufacturing or supply chain managers, sales, marketing, IT, or HR – those seem to be the majority of their needs. Then I either place candidates directly or work through my two networks to find candidates.
I’m finding much greater satisfaction working with clients who are less than 200 employees – and don’t employ more than two people in HR so they really need a third-party recruiter. I try to be diversified and work with clients of greater than 1,000 employees, but am finding that the bar they set is much higher and the “cherry” candidates have many companies to choose from, so although you may find the best candidate, it doesn’t mean my client’s location or product or philosophy will fit the needs of the candidate.
2007 was a better year than even 2006, which was a great year. I’ve been in business for 21 years, and I believe that as much as the Internet and job boards have changed our business, it still comes down to relationships – do the employers trust and value our work, and vice versa for the candidates. Laura Schmieder, President – Premier Placement, Inc.
We have been in our segment of the search business for 35 years (retained search in Corporate Restaurant Business). Over that period of time there have been eight to nine plus recessions or economic downturns, and we are still here. The whole situation depends on your attitude toward your ability to see the big picture in the search business. The business fared very well in 2007 because of the loyal customers and excellent references of our firm.
We started the year out with some solid business, not counting leftovers from the last weeks of December:
A. Franchise group in Texas, five positions, total salary $700.000. Fee $210.000 to DW Group.
B. Two good searches out of Atlanta. Fee $50,000.
C. COO search from the NE. Fee $60,000.
Total $320,000, not counting the fruit that is in the process
Not bad considering the newspapers’ forecast of doom and gloom. Dick Wray, Chairman – DW Executive Search
Overall: Our industry continues to have above-average demand for professional public accountants. The most noticeable change in 2007 was that it took a few more marketing calls per first-time send-outs. This implied that smaller firms were less stressed than in years past, either because they have become better at recruiting themselves or because they are losing business, thus reducing their demand for labor. The medium, regional, and larger firms continued to show growth and strong demand for staff across multiple levels, with the strongest segment continuing to be for accountants with two to five years of experience. There continues to be room to negotiate top salaries and part-time hours for candidates – both indicators of a strong, labor-driven market.
Though 2008 should be another above-average year, I expect it to be slower than 2007 due to a predicted softer overall economy in 2008. I also expect more focus on specialty or technical positions.
Most reliable users of executive search firm services – Firms with:
- 25+ employees – good for 1-2 placements
- 50-200 employees – 1-3 placements and
- 1,000+ employees – 5+ (though may be more specialized than in the past)
Fees: Thirty percent fees continue to be very obtainable even with firms that have 20% and 25% rack rates. The key for us has been the fact that we differentiate our services by delivering on our promise to present only passive, non-job-board candidates. Retainers and significant bonuses continue to be available for the hard-to-fill and specialty positions. Ted Saxerud – Global Recruiters of Arlington
My firm specializes in the Energy industry. We have offices in Houston and Chicago, 21 recruiters, and work a global market. We have had record years each of the last three years and have seen our fees range from 25% to 33%, with an increase in retainers and engagement fees. We see our success continuing in 2008, and our key has been hiring former energy professionals and functional experts to our team. Chris Schoettelkotte, President & CEO – Manhattan Resources
We work the Semiconductor industry and, more specifically, with Analog Companies and with Power Management IC companies. If we had a steady supply of power management engineers, we would be retiring next year. Everybody wants the same people and there simply are not enough of them. Candidates are more reluctant to make a move unless they have some personal motivation – as opposed to career aspirations. It was better in 2007 than previous years. 2008 is kind of up for grabs – we see direct parallels to the stock market and it doesn’t look promising at the moment. Sharon Barr – Barr Associates
Specialty areas worked Automotive, Metal Working, Metal Processing. Focus on engineering, maintenance, management, and operations. 2007 recruiting was good for foreign automotive manufacturers in the United States and good for metal processing. No complaints! More jobs, good candidates still hard to find. Spring, fall, and winter were hot. 2008 looks good, anticipate more hiring as new plants being built, and replacing those retiring at older plants. Anonymous
We specialize in the International Trade, Transportation, and Logistics industry. 2006 was our best year and 2007 was our worst year. There are changes that are taking place in the transportation industry; such as outsourcing of employees to India and China. This means that there could be less of a need for agencies in filling these types of positions that were typically handled in the past by employees in the United States.
There will obviously be a shift in what type of positions the transportation companies will be looking to fill. There is also much news of many of the major players in the transportation industries having mass layoffs and closing of multiple branch offices. Therefore, the year 2008 will indeed be a challenge for agencies that specialize in this niche.
The main reason for employer reluctance to deal with outside recruiters coincides with my statement above. The companies within our niche are streamlining their costs in all areas, including recruitment fees. I think the current economy is the driving factor in this impact.
Miami has always been a transient community. I believe the falling housing market has had a huge impact on candidates to the Miami area. If these candidates cannot sell their homes in order to relocate to the Miami area, this would have a dramatic effect on our available pool of fresh candidates to send to our clients. Fran Pollack, President/CEO – Ambiance Personnel
Our main areas of specialty are the Building Products, Kitchen & Bath, and Plumbing Products areas of recruiting. We recruit in most functional areas, including operations, general management, sales & marketing, engineering, and financial. Our clients’ businesses were off 30% to 40% because of the downturn in the housing industry in 2007. However, we experienced low-double-digit growth due to our aggressive development of new clients, which represented over 25% of our volume in 2007.
The forecast for the industries in which we recruit is: “Experts project a flat market for the early part of the year, then a recovery later in ’08.” We will continue to work with our clients building their staff and actively developing new clients for ’08. We have forecast a 20% increase in revenue for ’08. We are also looking to add to our internal staff. Joe McElmeel, Chairman & CEO – Brooke Chase Associates, Inc.
Over the last three decades, since before the days of Google, I have written hundreds of articles for major media. I am amused when I Google some of the things I have written and, lo and behold, find them rewritten verbatim under someone else’s name as the author. Oh well, they tell me that imitation is the sincerest form of flattery, and I suppose I’ll just have to put up with having my prose plagiarized.
So let’s have some fun and coin a new term and see how long it takes to start appearing elsewhere. Here’s the deal. Let’s combine the word “candidate” with what most of you do every time you tout one of your candidates to a potential hirer – an “infomercial.”
What do we get? A “candimercial.” Let me know when you first hear or read it somewhere else.
Does your fee schedule read: “Our service fees shall be equal to __ percent of the total estimated gross compensation to be earned by the candidate that you employ during such candidate’s first twelve (12) months of employment”?
You might want to rethink that time limit. Recently, a reader told us about a placement made in December with a base of $150K and a guaranteed bonus of an additional 20% of that amount. Billing on the $180K (salary + guaranteed bonus), they sent an invoice for $54,000. They were informed that the bonus amount could (or would) not be included as first 12 month income because bonuses were paid every January for all employees who had been with the company for six months or more. Therefore, the additional $30K was to be paid in month 13 – outside the contract agreement – and the client was only willing to pay a $45,000 fee.
I suppose a logical argument could be made that the bonus was being paid for work performed during the first 12 months and that the payment date was immaterial, but it would probably be more sensible to adjust the fee schedule to reflect this possibility.
When Wachovia bought A. G. Edwards a while back, the game of broker musical chairs began. Recruiters, sensing the unrest, pounced on the opportunity to steal disgruntled or uneasy brokers for their other-than-Wachovia clients. So what did Wachovia do? They offered a 10% fee to recruiters for bringing new hires to them rather than the industry norm of 6% of trailing firm production. Naturally, Wachovia’s competitors are in a snit over this tactic and vow to never again use recruiters who succumb to the siren song of 10%.
Do you approach potential clients with “hat in hand” or as peers? That’s the question asked of a heavy hitter by a relative rookie with a growing reputation for being “nice” but not particularly effective.
Our big biller answered: “I always approach potentials as peers. After all, I am attempting to forge a ‘partnership’ type relationship. While there is really no such thing as an ‘equal’ partnership, especially when one controls the money payout and the other wants some of it, I view the relationship as a mutual collaboration. He may indeed control the money and the access to it, but I know what he needs or wants and I control the access to the commodity/solution that will resolve his problem. I make more money than he does, I know more about the business that is the foundation of a mutually successful partnership arrangement, and there is always the subliminal threat that ‘He’s either with me or against me – a viable client or a rich and ready source of talent for his competitors.’ So why would I put myself in a subservient position from the get-go? If someone treats me like a pushover or a softy, I lose. If I come across as Steamroller Stan, we both lose. It all depends on your perception of the relationship from your viewpoint – and even the most successful relationships can go back and forth like a ping-pong game – but in the end, the best ones are those where the power dynamic is more like the pendulum on your grandfather’s clock. It will slowly swing back and forth, but never too far.”
By the time you read this, there will be a whole new dimension to The Fordyce Letter. Go to www.fordyceletter.com and see a whole new world of information access. The new website features access to several years of TFL archives, categorized and indexed for easy entrÃ©e to the problem you need solved or the information you need on a wide spectrum of topics. You will also find a daily blog and links to a broad selection of other resources vital to your practice and productivity. Initial response has been overwhelmingly positive, so if you haven’t logged on to the new site, do so today.
And, finally, a classic response from reader Tim Richards of Metro Recruiters to one of those awful client attempts to foist their ignorantly inconsiderate “agency agreement” on him. Don’t know if it worked or not, but I couldn’t resist.
“It darkens my day to hear your answer from the enclosed email. After 23 years in the search business, and having made many long-term clients, I have concluded lately that on some issues we can be competitive and for some issues we can be partners – such is the way most business agreements go. Furthermore, in this marketplace where there is a shortage of high-quality candidates, I have additionally ascertained that on many issues you’re my customer and on other issues, I’m your customer. Perhaps somewhere down the line you may come to that conclusion as well.
“Of late, the monolithic idea of ‘we’re the company, we’ll only pay a reduced rate, expect a longer guarantee, we’ll pay the fee later than sooner, you have to sign an agreement and in it is to not accept employees who approach us that have decided to leave (which potentially costs us money), can fire us at any time without cause, and by the way, will essentially work for free without any form of guarantee to make the placement or exclusivity’ is certainly not win/win in my mind. No matter which way I look at it, this demeanor has an air of bullying, and has become pretty extinct in the past few years.
“I hope you watched the segment on 60 Minutes on November 11th titled ‘Millennials’ – about the emerging workforce â€¦ an exodus in your market of fresh talent has caused our business to grow. â€¦ While many firms like yours struggle to not only attract gifted employees, but to retain them, it stands to reason that you would want to embrace forging a long-term relationship with a firm such as ours. Conversely, I can confidently say that if I was in your position, I would be highly skeptical of a person or firm that would arbitrarily sign this agreement without forethought. After all, there has been, perhaps is now, and will be a time when you’re going to have to rely on a recruiting firm for timely, mission-critical results. Assuredly, and as you well know from the North Carolina project, if I tell you we’re going to give 100% to you, I’ll stand by my word.
“Accurately speaking, our clientele returns to us for not just our scale (creating quick turnaround time, saving them money in getting a position filled sooner) but, most fundamentally, our ever learning knowledge of their business, creating a much more discriminating hire. We also strive to keep our clients in the loop on where their search stands – if in fact we’ve accepted the assignment. Having owned many of these businesses with many employees, the single largest complaint from the clients is ‘I gave the guy a job order and I never heard back from him.’
“In your and my case, unfortunately you do not disagree agreeably and attempt common ground. In other words, it would have been easier trying to be a business adversary without being a business enemy.”
This month marks Jeff Allen’s 25th Anniversary with TFL.
I first met Jeff in 1982, shortly after I took over the helm of TFL. I had heard of his reputation as one of the few attorneys who specialized in the field of placement law, but we had not been formally introduced. I was looking for a columnist to cover the myriad of legal landmines that confront practitioners on a daily basis and asked Jeff to submit some of the things he had written during his long tenure as legal counsel for the American Employment Association and the California Association of Personnel Consultants.
He did . . . and I was overwhelmed by not only his knowledge of the legal issues facing our industry, but also the fact that he had been a successful placement practitioner and a human resources manager for some of the country’s major corporations. This was supercharged with a unique, understandable, and easy-to-read style of writing. It turned out to be a perfect alliance, not only for TFL but also for the myriad of readers we service every month.
Since that time, Jeff has contributed over 300 insightful columns for TFL and has addressed individual reader and general industry issues with special articles on subjects of concern. His razor-sharp legal mind has made him a trailblazer in areas previously not addressed in courtrooms throughout America. He has drafted legislation protecting our industry and has won case after case that advances our profession. Jeff dismisses it as just “making the world safe for placement.”
His personal knowledge of working a desk, managing a search business, and understanding how a hiring authority thinks comes from having “been there, done that.” Ultimately, that is why almost every successful practitioner in our industry has sought his advice at one time or another and has called on Jeff from that time.
Over the years, Jeff has sent me articles, updates, and cutting-edge techniques regarding every facet of our business. Whether you are a searcher, a placer, or a hirer, the breadth of his wisdom in his writings and his understanding of day-to-day problems has earned him an honored place at the pinnacle of our profession.
Jeff and I authored The Placement Strategy Handbook and Placement Management. Both of these books outsell all others among practitioners and are in daily use worldwide. Jeff also authored The National Placement Law Center Fee Collection Guide (with Case Citations), which has enabled readers to collect millions of dollars in otherwise lost fees. In his media life as a best-selling author, Jeff has written more career books than anyone else.
Congratulations on 25 years, Jeff!
Editor’s Note: In the interest of precision, I sent this plaudit to Jeff to make sure the facts were accurate. What he sent back to me is under his usual PTL column. Ours is a friendship and partnership that spans an industry.