Wall Street Journal, Tuesday, 30 January 2001 - ©2001
by Dow Jones & Company, Inc.-The recent recruiting boom
has created a shortage of qualified recruiters and an ironic
situation for headhunting firms. For years, the nation's 5,000
or so search firms have plied their trade by luring highly
placed executives into openings at their clients' companies.
Now these firms are performing similar raids--on each other.
Marylin Prince, a partner with PrinceGoldsmith LLC, a retained
search firm in New York that specializes in asset management,
admits she has stolen a recruiter or two from the competition,
but says she's never seen anything like the present environment.
"It's fair game out there. My people are getting calls
from other recruiting firms all the time. It's a painful process
when you train someone and another firm steals them away."
The recruiter shortage is also affecting corporations. Chris
Ryan, who coordinates recruiting activities for computer services
giant EDS in Plano, Texas, says, "We have about 120 recruiter
positions across the U.S. Each time there's an opening, it's
more challenging to fill."
New varieties of search firms are scrambling to fill those
gaps by providing temporary corporate recruiters or by recruiting
recruiters; while traditional firms are creating fat incentive
packages to keep the recruiters they have.
The recruiter shortage is a testament to both the strength
and nature of the search industry. With companies expanding
and employees jumping from job to job at an unprecedented
rate--the Bureau of National Affairs pegs employee turnover
at 1.2% a month--recruiters are more important than ever.
But nurturing new recruiters is a lengthy process and firms
acknowledge they can't keep up with the demand.
Through a Side Door
"No one grows up wanting to be a recruiter,"
says Ms. Prince. Most people enter the field through a side
door, after earning an MBA or other graduate degree and spending
at least three years in a specific industry. They are discovered,"
Ms. Prince says, "when we're doing a search for a client
and find someone who may not be right for that position but
has the communication and relationship skills that would make
a marvelous recruiter."
Executive search firms have formal training programs for new
recruits and online courses like those offered by AIRS in
Hanover, N.H., can teach the basics of Internet searches and
sourcing. But new recruiters must be led through several months
of searches by seasoned colleagues before they pick up the
nuances of the profession. "New recruiters don't have
a clue," says Larry Cooper, director of sales for Management
Search International, a retained and contingency firm headquartered
in Atlanta, Ga. "If they make a placement during the
first six months, it's purely by accident."
Mr. Cooper is filling out the staff of MSI's Atlanta office
with people once overlooked by search firms--women and minority
groups. "Recruiting has become so fast-paced that many
of the gentlemen who started this industry just can't keep
up," Mr. Cooper says. "We're replacing them with
younger women, African-Americans and Hispanics who are highly
professional and driven to succeed here."
Kim Marie Hamilton, who had previously worked in computer
sales, says she didn't know much about recruiting until an
MSI staffer suggested she might be good at it. "I was
surprised at how high energy the field is," says MS.
Hamilton, "and how little prejudice there is. I'm recruiting
on MSI's technical side and it's far more important that I
know what will make a good match for IBM than what my gender
and race are."
Matthew Corbett, president of Ideal Wave Solutions LLC, a
staffing provider for the wireless data communications industry
based in Carlisle, Mass., says he's pleased that the demographics
of the entire recruiting industry is skewing younger. "I
don't think that age is as important as technical aptitude,
relationship-building skills and an analytical, problem-solving
personality," he says. "But I'm worried that if
there's an economic slowdown, the younger recruiters will
be the first to go."
If the demand for recruiters slows, Janet Jones-Parker's
new firm could also be in jeopardy. When she left the presidency
of Association of Executive Search Consultants in New York
two years ago, Ms. Jones-Parker had planned to open a traditional
retained search firm. "But I had a phone call from a
colleague who said that the war for talent has hit the talent
seekers, and he urged me to start a firm that recruits for
search firms instead," she says.
Now Ms. Jones-Parker is the president of Jones-Parker/Starr
in Chapel Hill, N.C., a firm that provides the same services
for search firms that they provide for their clients. "It
makes more sense for executive recruiters to spend their time
and energy working for their corporate clients, and let us
recruit for their staffs," she says. Unlike traditional
search firms, Ms. Jones-Parker does not take on individual
assignments, but works on a long-term retained basis with
a handful of clients, helping them staff new offices both
here and abroad.
Susan P. Ascher is tackling the recruiter shortage from yet
another direction. Her firm, The Ascher Group of Roseland,
N.J., provides recruiters to corporations on a contract basis.
"There's such a dearth of good people," Ms. Ascher
says, "that corporations can't find enough in-house recruiters.
And recruiting is cyclical, with most hiring slowing down
in winter. Corporations are discovering that it's more cost-effective
to let us staff their recruiting offices with contractors
during peak months and let them go during the valleys."
While there may be a shortage of full-time recruiters, Ms.
Ascher is having little trouble finding contractors. "A
lot of Generation Xers are fed up with the corporate world,"
she says, "and like the freedom of working at an hourly
rate, and leaving at 4 p.m. if they want to." She's also
convinced a pool of aging baby boomers, who have taken early
retirement or been downsized out of corporate jobs, to try
their hands at recruiting. And, of course, Mrs. Ascher has
found some of her contractors by raiding other recruiting
To stem that loss, some recruiting companies are offering
their staff extra incentives to stay. Benchmark HR Solutions
Inc. in Salem, N.H., for example, had been losing some of
its best recruiters to the start-up technology companies it
was helping to staff. "They were attracted by the promise
of stock options," says company founder Bill Bench.
As part of its payment plan, Benchmark HR accepts equity shares
in its young client companies. Last fall, Benchmark HR pooled
these shares and offered a percentage to each of their recruiters.
If one or more of the companies hits it big, Benchmark's recruiters
will share in the wealth. Since that move, fewer recruiters
have left, Mr. Bench says.
When a recruiter leaves to join another search firm, the raided
firm loses more than a good employee. Search firms operate
on client fees, which range from 25% to 35% of the annual
salary of each person they place. When a recruiter is lured
away, he may be taking along hundreds of thousands of dollars
in future fees.
That becomes the second irony in today's recruiter shortage.
Executive search firms abide by an unwritten rule that they
will not recruit from their client companies. But no such
rule places a recruiter's clients off limits when he joins
a new firm. "At the end of the day, the client decides
if he'll stay with the original firm or follow the recruiters
to the new one," says Ms. Jones-Parker of Jones-Parker/Starr.
We're finally feeling the pain a corporation feels when we
recruit away one of their top executives," says PrinceGoldsmith's