Friday, Aug. 06, 1965
Search for the Proven Man
No more than a decade ago they were known disparagingly in the business world as pirates and flesh peddlers. Company presidents sent them blistering letters, upbraiding them for tempting loyal, longtime employees with offers of other jobs. In recent years, however, riches and respectability have come to the executive recruiters. They now call themselves "executive search consultants," are called upon to help fill executive positions--generally decision-making jobs paying at least $20,000--by 75% of the nation's leading firms.
Their stature is likely to grow even more. Heidrick and Struggles, a Chicago-based recruiting firm, has just reported after a nationwide survey that demand for executives reached an alltime high in the second quarter of 1965, when some 12,500 executive openings existed in the U.S., 85% more than in 1964's second quarter.
Away with "Strays." Well over 100 recruiting firms have sprung up to meet this growing demand. Manhattan's Ward Howell Associates is currently seeking presidents for nine corporations whose yearly sales range up to $400 million.
Two of the presidencies command salaries in excess of $150,000. Filling them would earn fees of about $40,000 each for Howell, which like most other major recruiters charges companies between 20% and 25% of the executive's first year's salary--plus expenses. Howell's average fee: $8,000.
To retain their hard-won respectability, executive searchers operate discreetly and diplomatically. They refuse fees from the men they recruit, thus can remain objective in describing the prospect's qualifications to the client company. A likely prospect is seldom contacted at work, instead is phoned at home. "The higher up in their company they are," says Robert E. Wallace, president of Philadelphia's Bennett Associates, "the closer they are to the door if they are found talking to us." Appointments with prospects are carefully scheduled to avoid the possibility of an embarrassing meeting with other executives in the recruiter's waiting room.
Recruiters interview between ten and 100 men for each high job, shy away from what they call "strays"--or unemployed executives. "If he's not working, there's a reason," says Philadelphia's Wallace. Recruiters also avoid the executive who has had six jobs in ten years (too unstable) or the same job for 25 years (too stable and set in his ways). They seldom pick the uneasy or dissatisfied man who approaches them, but try to seek out their own candidates --often those who have little intention of shifting. "In every case," says Carl Nagel, a partner in Manhattan's Antell, Wright & Nagel, "we are looking for the proven man, the successful, happily employed executive." To find such men, the hunters often rely on word of mouth from other executives in the industry in question or from trade-journal editors, who are thought to have a good overall outlook.
Not Necessarily Nice. As competition for scarce talent increases, the price of enticing top men away from their jobs is rising. Salaries offered by some recruiters have jumped 15% to 20% in the past year. But salary is often not the ultimate lure. A large block of stock and clear-cut authority are sometimes of greater importance to the kind of men that the hunters seek. Says Recruiter Jim Richardson, head of Los Angeles' Richardson Associates: "Companies aren't looking for nice guys. They're looking for achievers."
Executive searchers see even greater demand for their own services in the days ahead. Diversification, acquisitions, and the spread of foreign branches have substantially increased industry's needs for managers. Greater emphasis on research has multiplied the need for executives with technical knowledge. Even the Civil Rights Act will stimulate the business. Encouraged by the law's Title VII, which bans sex discrimination in hiring, Boston's Frank Mannix this week will launch a new executive recruiting company: Careers for Women, Inc.
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