search-consult issue 2

The International Magazine for Search Professionals

“Search firms shouldn't be public companies...eventually they will crash under their own weight”

Steve Potter, CEO, TMP Worldwide Executive SearchSpeaks Candidly

What Clients Expectfrom a Search Firm

Executive ResearchThe Outsource Option

Executive SearchThe View from Manhattanwww.search-consult.com

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Ethics Check: Food

S E A R C H - E D I T O R

3April 2001 search-consult

search-consult

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Front Cover: Steve Potter, CEO, TMP Worldwide

Executive Search

Photograph courtesy of

TMP Worldwide Executive Search

© Copyright 2001 Dillistone Systems Ltd

The first of our Executive Search International Debates 2001 took place in NewYork on February 28th and you can find a full review of the debate in thisissue. Ethical issues in executive search were one of the many topics that

were raised. Christopher Clarke, President, Boyden Global Executive Search,carried out an 'ethics check' and asked the US delegates:

How many of us here would do a search for Marc Rich, the controversiallypardoned fugitive from American Justice? What about Michael Milkin, who served his sentence but was pardoned? What about finding a US CEO for the Medellin Drugs Cartel?How many would or have worked for tobacco firms?How about an animal testing laboratory?Would you search for a CEO for a perfectly legal bordello in Australia?

Few American hands were raised to each of these questions. Marc Rich now livesin Switzerland where apparently, his image has changed to 'law abiding' andwhere he is considered to be a philanthropist. What are your thoughts ? Enjoy search-consult.

Letter

Dear Editor

I agree to what you said on the 'public/private' debate (search-editor, March 2001) but

I would like to add that it is usually the young partners/performers who are supposed

to 'make' the old partners, i.e. those in the fall of their careers rich.

I doubt whether good performers are willing to pay this (US)$200,000 extra annually

for the benefit of working for a high profile company but tend to migrate to private

firms which do not require these monies. The fact that you have to go to the capital

markets so that you can afford to keep or build up the necessary worldwide network

and research - that's just public relations' nonsense.

If you plan to do something on the interim management market (we are just

completing a study on how demand has shifted in Germany from restructuring

business to new fields of demand), I propose the subject to be: 'Interim Management,

is it better provided by interim management stand alone companies or by firms who

are associated with executive search firms?'

L. Heuse

Ludwig Heuse GmbH

Send your letters to: [email protected]

COMING UP IN THE NEXT ISSUE:

Interviews with Jeff Christian, Chairman& CEO, Christian & Timbers

Gerard Clery-Melin, CEO, WhiteheadMann Group

Dr. Gernot Muller and Werner Scwab,Managing Partners, Ray & Berndtson,Frankfurt

S E A R C H - I N S I D E C O V E R

2 search-consult April 2001

for Thought

S E A R C H - N E W S




Tell us your news e-mail: [email protected]

K O R N / F E R R YINTERNATIONAL hasreleased record thirdquarter figures. Revenuesgrew 28.7% for the thirdquarter of the fiscal yearending April 30 2001(Q3'2001) and 47% for thenine months ended January31, 2001. Growth was attrib-uted to an increase inassignments, consultants,fees and revenue fromFuturestep.

The Executive Recruitmentdivision saw 19.6% growth

in the third quarter over theprevious year. Consultantnumbers rose dramaticallyfrom 421 to 562.Assignments for the quartertotaled 2,009 up from 1,879.Over the first nine months ofthe financial year, the firmhad booked 6,623 positions,an increase of around 20%.

Futurestep revenues forthe quarter increased from$9.6m in Q3 2000 to $21.1in Q3 2001. On January 31,2001, the Futurestepdatabase held informationon 904,000 candidates.

Windle B. Priem,President and CEO ofKorn/Ferry, claimed, "Our

revenue year-to-date is up47% because of our unpar-alleled range of revenuestreams from executiverecruitment, Futurestep andJobDirect. We are the clear

leader in providing a fullrange of customer serviceofferings to meet our client'sneeds."

Tell us your news e-mail: [email protected]

JOSEPH GRIESEDIECK WILLstep aside as Managing Directorand CEO of Spencer Stuart inMay 2001 to return to full-timeclient work. The Spencer StuartBoard is in full accord with hisdecision. Spencer Stuart'snominating and successionprocess is taking place betweennow and the scheduledpartner's meeting in Charleston,South Carolina, from May 7-11,when his successor will beelected. Mr. Griesedieck willcontinue to run the firm untilMay, working closely with theBoard to ensure a successfultransition. During Mr.Griesedieck's five-year tenure,Spencer Stuart has grown from

$166 million in annual revenuesto revenues of $365 million, again of 120 percent. SpencerStuart has also hired 225 newconsultants, opened 16 officesand launched an Internetbusiness, Spencer Stuart TalentNetwork.

Mr. Griesedieck comments:"When I was elected to serve asecond term by the Partners, Icommitted to the developmentof a new three-year strategy forthe firm. This strategy has beenmostly accomplished and itselements are firmly in place.Now, the focus for the next threeyears should be on implementa-tion including an ongoing effortto develop our people to leadand manage the business. “

ON FEBRUARY 13, 2001,Heidrick & StrugglesInternational Inc. announcedspectacular record figures forboth revenue and earnings. PatPittard, Chairman, President andChief Executive Office,welcomed the figures: "It hasbeen a remarkable twelvemonths of growth and expan-sion, and we have outperformedon practically every expectation.We focused on quality execu-tives in our core executivesearch business and madesubstantial progress in devel-oping LeadersOnline."

In 2000, the firm confirmed7,816 searches - an increase of28%. Average fee per searchrose 4% to $73,500, while thenumber of consultants rose to510 - a 30% increase. This ledto an increase in revenues of36% to $594,400,000.

LeadersOnline reportedrevenue of $20,200,000 up from$2,600,000 in the previousyear. Pre-tax loss also rose to$12,900,000 from $5,200,000in 1999. The unit, involved inmid management recruitment,confirmed 485 new searches, atan average compensation levelof $135,900.

Mr. Pittard revealed that theeconomic slowdown washaving an impact on revenues:

"January started slowly, but thatmonth seldom is an indication ofthe quarter or the year. In termsof earnings, our first quarter ishistorically the smallest and weare facing difficult comparisonsagainst last year's first quarter.However, revenue is picking upand our CEO searches remainvery active. While we don'tthink we are immune to aneconomic downturn, we dobelieve that our core businesshas some inherent naturalresistance because of the high-

end market we serve, as well asour geographic and industrypractice diversification. Inaddition, our cost structure hassome built in variability, whichmitigates some of the effects of adownturn. We remaincautiously optimistic about ourearnings prospects in 2001. Asthe market leader in top- levelexecutive search, and given ourpresent financial strength, welook at an economic downturnas an opportunity."

Heidrick & Struggles

Korn/Ferry

Griesedieck Steps Aside asMD of Spencer Stuart

CHRISTIAN & TIMBERS,retained executive search firm,and OffRoad Capital, an onlineprivate securities marketplace,have closed C&T AccessVentures, a $44 million privateequity fund. The fund will bemanaged by William Trainorand will make co-investmentsin high-growth technology

companies in industriesincluding broadband,networking infrastructure,security, software and wirelesscommunications. Investmentswill be between $500,000 and$2 million per company.

KEVIN L. KELLY, co-managing partner of theTokyo office of Heidricks &Struggles International, Inc. hasbeen named "Headhunter of theYear for Japan" by FinanceIntelligence Asia, a quarterlymagazine covering the financialmarkets in the Pacific Rimregion. Mr. Kelly has also beenrecognized by Asiamoneymagazine as one of the "TopHeadhunters of the Year."

Brian Sullivan, ManagingPartner of Global Financial

Services comments: "This recog-nition - by two bellwether publi-cations of the Asia Pacific region- of Kevin Kelly's influence inone of the world's most impor-tant financial markets is particu-larly gratifying to our firm."

Mr. Kelly joined Heidrick &Struggles International in 1997from another global executivesearch firm. His focus areasinclude investment banking,asset management, fixed incomeand equities. Prior to his careerin executive search, Mr. Kellyspent five years in mortgagebanking.

Kevin Kelly of Heidricksnamed Tokyo’s TopHeadhunter

Christian & Timbers andOffRoad Capital Close $44million Private Equity Fund

Korn/Ferry - Record Performance

TABLE: Heidrick & Struggles – Revenue Split

Revenue 1999 2000 %Change Americas US $341,553,000 $256,394,000 33.2% Other $21,858,000 $17,342,000 26% International Europe $176,431,000 $138,865,000 27.1% Asia Pacific $34,361,000 $20,614,000 66.7% Total Executive Search $574,203,000 $433,215,000 32.5% LeadersOnline 20,191,000 2,617,000 671.5% Total Company $594,394,000 $435,832,000 36.4%

Record Performances from theIndustry Leaders...

WHITEHEAD MANNGroup PLC has acquired TheChange Partnership Ltd for aninitial consideration of £4million in its bid to build apremier executive search andhuman capital consultancy.The Change Partnershipspecializes in executive devel-opment using coaching andmentoring to assist inimproving an organization'sperformance by developing itssenior executives.

The board of WhiteheadMann intends to merge TheChange Partnership with itsown consultancy division toprovide a broad range ofexecutive assessment, evalua-tion and development serviceson a global basis.

Gerard Clery-Melin, ChiefExecutive of Whitehead MannGroup, said: "Whitehead Mannhas grown significantly duringthe course of the last yearfollowing the mergers withGKR in the UK and PendletonJames in the US. The group'strading remains strong and theacquisition of The ChangePartnership represents afurther important step in thedevelopment of our humancapital management practice.They are a natural fit for ourexisting operations and are aworld leader in the field ofexecutive development. Theywill allow us to assist theboards of major organizationsin not only recruiting andassessing management talent,but also in developing thattalent."

Whitehead Mann GroupPLC Acquires The ChangePartnership

www.search-consult.com NEWS






KORN/FERRY INTERNATIONAL FIGURES (dollars in millions, except per share data) Third Quarter Year to Date F Y’01 FY’00 Change FY’01 FY’00 Change Revenue $157.2 $122.1 $35.1 $504.4 $343.2 $161.2 EBITDA $21.9 $18.2 $3.7 $66.7 $45.0 $21.7 Operating Profit $15.0 $14.4 $0.6 $47.1 $36.2 $10.9 Net Income $6.9 $8.3 ($1.4) $23.0 $20.4 $2.6 Earnings per share $0.18 $0.22 ($0.04) $0.60 $0.55 $0.05 EXECUTIVE RECRUITMENT FIGURES (dollars in millions) Third Quarter Year to Date F Y’01 FY’00 Change FY’01 FY’00 Change Revenue $134.6 $112.5 $22.1 $437.3 $323.3 $114.0 EBITDA $27.7 $22.8 $4.9 $92.4 $61.7 $30.7 Operating Profit $22.9 $19.3 $3.6 $78.0 $53.5 $24.5 Operating Margin 17.1% 17.2% (0.1%) 17.8% 16.6% 1.2% Earnings per share $0.30 $0.30 - $1.07 $0.82 $0.25 Engagements 2,009 1,879 130 6,623 5,502 1,121 Average Number of Consultants

562 421 141 550 419 131

S E A R C H - S T R A T E G Y




TMP WORLDWIDE INC.has announced the acquisition ofaffiliated legal recruitmentcompanies Gregory & Gregoryand Attorneys on Assignmentfrom Esquire Communications Ltd.Both operations will be integratedinto TMP Worldwide'seResourcing division, creating aplatform for expanding contractand permanent legal recruiting

services in the US.Founded in 1988, Gregory &

Gregory combined operationswith Attorneys on Assignment in1998. The companies offer fullservice legal employmentservices to law firms andcorporate clients, providingcustomized solutions such asindustry specialized attorneys orentire project teams. Thecompanies place attorneys,paralegals and legal support staff.

Gregory & Gregory Acquiredby TMP

SizeJason Starr talks to Steve Potter, CEO, TMP Worldwide Executive Search

isn’t everything

TMP Worldwide is a colossal andacquisitive business. Its advancethrough the recruitment industry

has largely been financed by thephenomenal success of its Monster.comrecruitment business from its roots inYellow Page advertising. TMP Worldwidelaunched into the executive search arenain 1998, and the top level searchbusiness now accounts for around 14percent of group revenues.

This may not seem to be a majorpercentage, but put in the context of abusiness with revenues of $1.3 billion for2000 and a compound quarterly growthrate of a whopping 39 percent, theillusion is somewhat different. In 2000,search revenues were around $180million, making TMP WorldwideExecutive Search one of the largestsearch organizations in the world.

However, TMP Worldwide Executive

Search's objective is not to be the largestbut to be the best. Steve Potter, CEO ofTMP Worldwide Executive Search, tellshow he attends to achieve this.

Mr. Potter entered the search industryin 1981. Russell Reynolds personallyrecruited him into the business.Previously, he was primarily involved infundraising for charities, universities andpolitical campaigns. He served as aFinance Director for Prescott Bush, theuncle of the current President, George W.Bush.

His first job at Russell Reynolds wasExecutive Assistant to Mr. Reynolds. Mr.Potter was one of a number of searchalumni who started their search career inthis way. After two years in this role hewent into search 'full time'. In his first 18months he was the leading executerwithin the business, and ranked numbereight in terms of business developmentwithin the firm.

"I was good at it. I was able to readpeople well and make a connection withthe clients that they obviously recognizedand valued," he says.

Mr. Potter continued to excel and wassubsequently put in charge of FinancialServices in New York and then globally.He was then given responsibility for Asiaand a seat on the executive committee.Mounting frustrations at the firm led himto leave in 1995.

"Hob Brown, who I admiretremendously as a person and like as anindividual, and I had some philosophicaldifferences about how to run the firm…Ididn't want [him] spending my bonus oncrazy spending policies, layers ofmanagement and $600,000 CFOs andthose kinds of things."

In August 1995, Mr. Potter and twoother partners from Russell Reynolds leftto form Highland Search Group. Thebusiness was an immediate success.

He explains, "We built it into a truepartnership based on the Goldman Sachsmodel and did $12 million in revenue inour first year…We were the mostprofitable firm in the US in terms ofrevenue per professional and revenue perpartner."

At this stage, both Heidrick & Strugglesand Korn/Ferry made approaches to buyHighland but Mr. Potter declined, as hedid not agree with the business modelthey adopted: "Search firms shouldn't bea public company…that model doesn'twork. If it does work, it may last for one,two or three years but eventually it will

TMP Worldwide

0

5

10

15

20

25

30

%

1

Revenue source

TMP revenue breakdown for the first 9 months of 2000

Yellow Page Advertising

Recruitment Advertising

Executive Search

Selection and temporarycontractsInternet

ON FEBRUARY 20, 2001,TMP Worldwide Inc.announced results for Q4 2000and full year 2000. Thebusiness, which is made up ofInteractive, RecruitmentA d v e r t i s i n g ,S e l e c t i o n / T e m p o r a r yContracting, Yellow Pages anda Search division grewcommissions and fees byaround 42% to $1,291,737,000for the year. The searchdivision produced a relatively

small increase in fees, up to$178,399,000 from$173,277,000; however, theunderlying numbersdemonstrate the amount ofrestructuring undertaken bythe business during 2000.Average billings per consultantincreased by 38% from$650,000 to $900,000.Billings per consultant in thefourth quarter rose to

$220,000 from $170,000 forthe equivalent period in theprevious year.

The Executive Resourcingdivision grew substantially,with commissions and fees up32% to $386,700,000 for theyear. This was, in part, due to anumber of acquisitions throughthe year, a trend, which islikely to continue, as the firmreported a net cash position of$535,800,000 on December31, 2000. Jim Treacy,

Executive Vice President andCOO of TMP Worldwideexplained "Going forward, ourstrong cash position willfurther provide us with theflexibility to strategicallyreinvest in our strong brandsand to continue our aggressiveand opportunistic pursuit ofaccretive acquisitions toexpand TMP's productofferings, sales forces andclient lists."

TMP Announces Remarkable Figures

FUTURESTEP INC., THEmiddle management focused e-recruiting unit of Korn/FerryInternational Inc., has cut 60 jobsor 12 percent of its workforce of

500 members of staff. Thereason for the cut is alleged to bedue to the slowing jobmarket.search-consult will carryan exclusive interview with JeffChristian, CEO, Christian andTimbers in issue three.

Futurestep Cuts 12 percentof Workforce

Australia Executive DemandAt Highest Level


THE DEMAND FORAustralian executives fell 6%in February from January but isat its highest level on a threemonth moving average basis,according to consulting firm,Executive Leasing Australia

Pty. Ltd. The company'snational executive demandindex, at 566.00 in February is2% higher in three monthmoving average terms thanprevious highest levelachieved in August 1999.

CPL Seeks Acquisitions Abroad

CPL RESOURCES PLC, a recruitment company basedin Dublin, Ireland, is seekingacquisition opportunities

abroad after pre-tax profits ofeuro 2.7 million in the sixmonths to the end ofDecember 2000. Thisrepresented a 40 percent riseon the same period last year.









crash under its own weight. You can'tkeep growing 20 percent per annum in abusiness with conflicts, where the cost ofacquiring significant serious playersevery year, is so high. It just doesn't workand at some point it will close in on itself.I think, particularly in a slightly flatmarket…you may see that happening atsome point. Korn/Ferry just missedearnings this quarter and who knowswhat's going to happen in the next two orthree."

One of Mr. Potter's frustrations is that hefailed to act on his desire to develop amulti-product firm at Highland. "Afterthree months, we had a partners meetingand talked about the way the businesswas changing and what we wanted tolook like in three to five years. One of ourclear conclusions was that we wanted tobe a multi-product firm. We wanted tobuild into the middle market and wewanted to build an Internet capability….but I was a terrible CEO at Highland,because I didn't implement it."

Although Mr. Potter believes that thiswas the right strategy at that time, he isnow apprehensive about the search firmswho are planning to implement or havealready launched Internet capabilities:"like Spencer Stuart and others who aregetting into that business now," hestates.

He adds, "It's absolutely ridiculous.There are 4,000 competitors in that spaceand 3,000 of them will go out of business.Another 900 are not making any money.Only the top six have enough traffic to beon media metrics and of those, the topfive, don't equal Monster.com. So whetherit's Internet recruitment for a specificniche or an effort to be 'a big one' likeMonster, it's too late [for thesecompanies]. Highland missed the boat; itwas my fault. I should have raised someoutside cash, but we missed the boat."

Of course, the company who didn't'miss the boat' was TMP Worldwide.Andrew J. McKelvey, Chairman and CEOof TMP Worldwide, approached Mr. Potterwith a similar business model.

"When you looked at TMP you saw areally amazing company that had built

the number one market leading businessin every single business area they werein except search…. They had just got intothe search business; you couldn't claim itwas number one in size and it didn'tmeasure up in the other metrics that Iwould look to: revenue per professional,profitability. But Andy challenged me tocome in and make it number one andreally gave me a free hand to try andcome in and do it…." Mr. Potter sawnumerous problems, but believed theycould be fixed.

"We have made tremendous progressin virtually every metric that one wouldlook at… total revenues are upsignificantly…. Our average fee in the UShas gone from $60,000 to $105,000," hebegins. "Partner head count hasdecreased but revenues, profitability andaverage revenue per professional is wayup. We cleaned it up; laid off close to 60partners and principals and hired 45 newones - almost all from Spencer Stuart,Korn/Ferry, Heidricks, Russell Reynolds,and we are not done yet. Our goal is to bethe high end, value added firm - not thebiggest. ‘Big’ is not great in the searchbusiness and will not be for as long asconflicts still exist. I think it is naïve ofpeople to think that conflicts are goingaway in the next 12 months - they'renot."

TMP Executive Search now hopes todominate the executive suite. It has aminimum fee in the US of $50,000 and

plans for minimum fees to reach$150,000 within five years.

To achieve this, the business is nowlooking at hiring individuals rather thanbuying firms: "We've hired someoutstanding people and we've let someothers go that do not fit the model. We'vehired Rick Moore from Russell Reynoldswho has built a $20 million business inCanada overnight. We hired 35 newpartners and principals last year from thebest firms in the world. We've got JohnGriffin who ran Heidricks' EnergyPractice. He bills $3 million plus, andknows all the CEOs. I didn't have toacquire any firm to get him." Hiring anindividual is indeed a safer process thanbuying a firm.

"I think if you look at TMP's track recordin buying search firms it's really okay.There're a couple of firms like LAI wherewe did lose a couple of people. A numberof those people were laid off, some ofthem we were unhappy to lose. We havelost virtually no TASA partners and noHighland partners, and very few from theboutiques," he says.

The firm now has around 155 partners.This year, Mr Potter intends to promotefive or six people and anticipates hiring alarger number of employees with a netincrease of eight to ten percent. Heexpects some partners to retire andothers to be let go.

Geographically, he has set his sights onboosting the business in Asia and SouthAmerica. "I'm not satisfied with ourpresence in Asia, we're not yet at thecritical mass I would like. We just openedin South America. We hired two SpencerStuart partners in Brazil - fabulous guys -and bought a small boutique down therethat's both middle market and search. Wemoved the search people in with theSpencer Stuart people and the rest havemoved into Andrea Wine's middle marketbusiness."

Mr. Potter is enthusiastic about thecorporate culture he is developing. Helikens TMP Worldwide Executive Searchto Goldman Sachs and JP Morgan who"pay the best to get the best". He believesthat the business should be run for profit,

not for pleasure, and that people shouldsee a direct connection between theprofitability of the firm and what they canultimately take out. He believes that thisis something that the public search firmsare failing to achieve.

"I don't want to come across as tooaggressive but I think these are privatefirms trying to be public firms: RussellReynolds, Korn/Ferry, Spencer Stuart,Heidrick & Struggles. Their benefits areas 'blue chip' as they come - their costsare high."

He continues: "Both Heidrick andKorn/Ferry have gone public without, inmy view, addressing that layer ofmanagement and cost…. Their overheadis extremely high and Wall Street knowsit…. It's going to crush them, in my view,in a down market."

"I realize that my recruiters have to getpaid 'market' or better, so they get a 60percent payout here, which again if youcompare it to Heidricks and Korn/Ferry, ismore… but I'm not running an overhead

structure. I'm letting the recruiters keep it.The rest goes to the shareholder," headds.

Mr. Potter emphasizes the differencebetween efficiency and 'corner-cutting.'He has increased researcher andassociate support, but is leaner insecretarial support.

"We tried to hire a recruiter fromanother firm which we were unsuccessfulin doing and one of the problems wasnegotiating a contract with his secretarywhich was more than $200,000 a year…There was another secretary involvedwith a salary of $120,000…. We'redifferent and it's working."

Mr. Potter is confident his strategy willcontinue to work: "We are a fast growingfirm with an amazingly cohesive strategythat plays well in the corporate suite andthe HR department…. I think at TMP weare redefining the model and putting outchallenges that are squeezing out, notonly search, but also other industries inways that they've never been squeezed

www.search-consult.com/talentwww.search-consult.com/talent is not just another jobs website,

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For people looking to progress their career, we guarantee that

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Steve Potter

before. The contingency recruiters will allbe out of business in five years. … I can'tthink of a top five service business, in anyindustry, being created in 18 months thatis doing what we are doing in the searchbusiness now… and we are not evenwhere we want to be."

Mr. Potter sums up his vision of thefirm: "What TMP is to human capital iswhat Peat Marwick is to tax." He gives anexample, "What if TMP were to go intoIBM and say, 'we know you spend$10,000 per head to hire. That's your costof hire. We can do it for $8,000 and wewant to keep $1,000 per head.' I'm notsure where we go with this yet, none ofus are, but it's moving in that direction."These are interesting times at TMPWorldwide.

Further Information

www.tmp.com

Web: www.search-consult.com

use the expatriate's pool, which oftenresulted in a great candidate list. Nowthere is 'war' amongst companies.Candidate turnover rate is higher in theseareas than in Western Europe. However,

each country is a bit different; issues inBudapest will be different for those inPrague or Warsaw."

He continues: "Today we are satisfiedwith the operations we have in thesecountries and they are still profitable. In1989, we were alone in these markets;we had no competitors and we wereextremely successful. I think perhaps ifanywhere, in terms of growth, Polandshows a lot of potential, as there hasbeen a lot of business development therein recent years. In Russia, we are beingvery cautious; we are not losing moneybut we will be watching that area veryclosely."

In the following pages, executivesearch is explored in four CEE countries:Russia, the Czech Republic, Hungary andPoland.

RussiaBy Sophie Vergnas, Managing Director

CIS, The Accord Group

The year 2000 was definitely a turningpoint for the executive search industry inRussia: companies are looking for notonly Russian managers but also for

foreigners who have experience in theRussian market.

We are confident that the demand forsearch services by Russian companieswill also continue to grow this year andwill keep expanding. The reason for thisis robust activity in all market niches aswell as increased competition within allmarket sectors. In this competitiveenvironment only highly professionalemployees are able to lead companies inthe right direction. The majority of largeRussian corporations ("flagships" of theRussian economy) are currentlyrestructuring internally. The competitiveedge these companies will or will not

gain is directly linked to the success ofinternal restructuring: the placement ofkey people in the right place at the righttime.

One may think that the hire of anexperienced foreign manager will help tosolve problems, but our experience showsthat "expatriates" are often too expensive,capricious and lack Russian language skillsamong other drawbacks. There was alsothe hope that Russian managers who haveexperience working in foreign companiesmight be of help, however this too provesin practice to be dubious. Typically thesemanagers do not want to work for Russiancompanies, as they are more efficient inhighly regulated, structured organizations,while Russian companies have only juststarted to build this.

S E A R C H - M A R K E T




Successfully transitioning yourcompany into the new millenniumis a challenge no matter where you

are located or what business you are in.However, it poses an even greaterchallenge in countries that aredeveloping into a modern marketeconomy, one with many indigenouscompanies plus a growing number ofmultinationals expanding into the region.Here, the need for leaders with the rightmix of skills, experience and culturalcompatibility becomes even more critical.Leaders are needed who can successfullyguide your business in a developing,rapidly changing economy. Search firmsare increasingly meeting this need inthese areas.

A region that has undergone a massexpanse in executive search in the lastdecade has been Central and EasternEurope (CEE). Jana Martinová, ManagingPartner, The Accord Group, describes thismovement, "From a business senseCentral and Eastern Europe [is] a regionincluding all the former communist bloccountries, such as Hungary, Poland,Slovakia, Romania, Bulgaria, and all thecountries belonging to the former SovietUnion. In this region, executive searchhas been developing since the early1990's. The most active consultingcompanies came along with their clients,mostly from the consumer goods industry,directly from Vienna, London, Brussels orParis."

She continues: "The early to mid-90'swas characterized by a huge demand for

employees speaking English or German,other professional qualifications wereprovided by expatriates. Low salaries andrelatively low fees also characterized it;no international executive search firmcould afford to work on one third ofremuneration fees. The big internationalnames in the executive search businessstepped in slowly, with the exception ofthe Russian market, but it just did not payoff. Since this time the CEE market haschanged from almost every point of view:the offer, the demand, and the level ofservices provided."

Tony Goodwin, Chairman of AntalInternational states, "What has beensurprising in Central Europe, has beenthe resilience of the economies there;Poland and Hungary…. The economies ofthese countries are very strong, with

increased localization and sophisticationof the market. This has led to a massivesurge in the arrival of internationalistswho are the highly sought after skilledprofessionals, able to transfer and adaptto different countries and cultures."

He adds: "In the nations of EasternEurope - the situation is markedlydifferent. Due largely to the 1998devaluation of the ruble, the region hasexperienced a severe fiscal downturn.This began with the disintegration of thebanking and finance sectors and thecollapse of foreign investment, which inturn had a dramatic impact on theamount of internationalists working inthese countries. Currently this regionseems to be re-emerging…."

In a study conducted by Korn/FerryInternational on 'Europe's ActiveJobseekers' it revealed that: "Europeanmanagers are undaunted by taking theircareers and lives abroad; they speakmore languages, and particularly English;they have been brought up with theconcept of a European/global community,which has helped them to see Europe asa single market; and businessqualifications such as the MBA havestressed the importance of globalization.Meanwhile, greater European integrationhas made it easier for skills to betransferred between countries. The singleEuropean currency may make cross-border labor shifts vital because, withinterest rates locked, individualeconomies may have to pay for economicdownturns with increased joblessness.

For job seekers, this will make multiplelanguage skills essential."

In another study on 'Human ResourceTrends in Central and Eastern Europe,'the firm conducted research in sixcountries: the Czech Republic, Hungary,Poland, Romania, Russia and Slovakia. Itfound that: "Throughout all six countries -there is a significant shortage of localexecutive talent. At the same time,managerial practices are becoming morewesternized; an 'East Goes West' trendthat is expected to continue. The sleepy,bureaucratic firm of pre-reform days is athing of the past."

It also stated that, "Marketing andsales, top management, financial andchange management skills are in shortsupply - the very skills that are mostneeded, as firms must now focus onselling their output and financing theirown production and investmentrequirements. A wide variety of personalattributes - such as drive, integrity,leadership and teamwork are also takingon new importance."

The report also found that work habitshave changed dramatically, with a 50-hour week becoming 'the norm' and atthe same time absenteeism is low.Expatriates remain a key component ofthe management market. Respondentsestimated that 25 percent of all managersin their firms are expatriates. Salaryincreases for local talent are high, even inthe lowest categories; in state-ownedand manufacturing firms, they havegrown more than 25 percent in a two-year period, and in private firms theyhave nearly doubled. In this fluid market,many review salaries twice a year ormore and benefits for local managers areapproaching the levels of expatriates.

Daniel Grenon, President of theNeumann Group feels that the challengesfaced in executive search in EasternEurope today are the same as those inwestern countries: "[H. NeumannInternational] have been present inEastern Europe for more than a decade. Inthe past, you could also find goodcandidates not only from leads from yourown candidate pool, but you could also

Executive SearchinBy Jan Iverson-Pearson, search-consult

Eastern Europe

Sophie Vergnas

Daniel Grenon

Tony Goodwin





The demand for high levelprofessionals is currently growingrapidly. This increased market demandhas inflated the average wage for toplevel professionals. Despite the overallincrease in executive salaries there is stilla drastic disparity among salary levels indifferent industries. For example, theaverage salary of a top level technologymanager could be from USD 80K to USD150K and above.

Russia (continued)By Anna Kozlovskaya, Senior

Consultant, H. Neumann International,Moscow

As statistics show, the year 2000 was asurprisingly good one for Russiaeconomically. GDP rose by almost eightpercent, industrial output by ten percentand there was an almost 20 percentgrowth in fixed capital investment -something not seen in Russia or theformer Soviet Union for the last 30 years.However, analysts say that temporaryfactors such as ruble devaluation andhigh prices on crude oil have beendriving the upturn, while little has beendone to ensure long-term stable growth.

The telecom industry shows steadygrowth, which is spurred by fiercecompetition in several regions, especiallyin and around Moscow: by January 1,2001 there were 3,4 million mobile users- a 152 percent gain from 1,4 million inDecember 1999.

While the Russian market is saturatedwith consumer goods, there is a demandfor 'Western quality', so a huge share ofconsumer products especially clothing,perfume and home decorations comesfrom abroad. Large internationalproducers of cigarettes, beverages andconfectionery have opened productionfacilities in Russia in order to reduce theconsumer price for their products.Producers of industrial equipment facedunfavorable times after the financialmeltdown when business people stoppedinvesting in machines. The financial

market is still stagnant.The main problem that international

companies have to face is that the basicprocedures for legal protection are notdeveloped enough. As for Russiancompanies, the main problem is lack ofcorporate culture and ethics. To solve thisproblem some local companies inviteWestern CEOs on a contractual basis. Onthe other hand there is a tendency forRussians to replace expatriates at thehead of multinationals, not only becauselocals are cheaper to employ, but also,more importantly, their understanding of

customs officials and the culture ofgovernment ministries helpsmultinational companies to become moreefficient.

The Czech RepublicBy Irena A. Brichta, Managing PartnerCzech Republic & Slovakia, Heidrick &

Struggles

Since the collapse of communism andthe development of the free marketeconomies in Eastern Europe,international companies who enteredthese countries began seeking localtalent to become the future leaders and

employees of their local entities. Initially,in the Czech Republic as elsewhere in theCEE, these multinationals either made astrategic acquisition in order to acquireinstant market share, as well as a 'readymade' company, or decided to start afreshon a 'greenfield site'. Each option had itsadvantages and disadvantages andtoday, eleven years on, the region isheavily sprinkled with companies whochose one or other option.

From 1990, international companieshave been seeking bright, flexible,creative and dynamic executives at alllevels. In the early days, organizationscompeted for good English speakers withwell developed communication skills, buttoday as they have trained anddeveloped their own employees, there ismore experienced talent in the marketplace. However, there is still moredemand than supply in many functionsand especially at the most senior level.

In the Czech Republic, there are moreexperienced Sales Directors and SalesManagers than Human ResourcesDirectors or Logistics Directors. Thereason for this is because the firstinternational companies to enter themarket place were usually from theconsumer sector and their initial focuswas to create sales and distributionteams. So today, there is a significantpool of experienced senior sales people.However, there are fewer local seniorexecutives with both sales and marketingexperience, because it is only some tenyears or less that international companieshave been established in the market.Today, most clients are seeking to replacetheir senior expatriate managers withlocal senior executives, but they dorealize that they may not have quite thesame depth of experience as theirexpatriate managers and therefore theyare sending more of them to 'real'positions abroad.

There are more graduates who enterthe financial services sector - it was andstill is a very desirable area; as well asthe telecommunications sector that hashad fantastic growth in data and internetservice companies, as well as preparation

for voice (there is only one telecommonopoly part owned by Telsource, butderegulation will occur in 2002). Therehas been a consolidation in the bankingsector, as the remaining four Czech bankshave been 'privatized', and flexible,creative and dynamic candidates havebeen given significant opportunities.

In terms of industry, there are stillmany ailing large Czech 'dinosaurs',gradually heading to bankruptcy, butover the last 18 months, strategicinvestors as well as investment fundshave been acquiring small to mediumsized companies that are not too much inthe 'red'. There are probably more

engineers per head of population in theCzech Republic than anywhere else inthe world; the population is very welleducated; but not all have yet had theopportunity to work in an internationalcompany environment and understandbusiness fundamentals.

Most Czechs working in aninternational company at a manageriallevel speak English or German; and manyexpatriate managers have mastered thelocal language with panache. Most of my

clients are international companies, whowould prefer to have younger executives,because of their flexibility and ability tobe molded, but at senior level, clients donot have a preference, except that thecandidate must usually be dynamic, haveinitiative, and be flexible and willing tolearn, as well as be an excellentcommunicator.

The expatriate manager usually earnsmore than the local manager at the samelevel, but it is also true that the localprobably does not have enoughexperience of either change managementor in building companies, and thereforecannot govern the same package.

However, companies are now sendingsome of their star employees overseas forone to three years and these executivesare highly sought after on their return. Itis probably true also to say that seniorexecutives in Poland and especially inRussia are paid 40 percent more thansenior executives in the Czech Republic -maybe it is that there is less of them inthese two countries.

Due to the shortage in residentialhousing in the larger cities, especiallyPrague, most Czechs are not willing torelocate unless the package is made

'sweeter' and accommodation costs orhouse loans are made to them by theiremployer. There is some mobilityamongst the senior executives but notmuch.

From January of this year, there havebeen a variety of changes in theEmployment or Labor Law (a law goingback to the 1960's which has just beenamended regularly in the last elevenyears), which has luckily led theGovernment to agree that a totally newLabor Law needs to be created to answertoday's needs. The problem is that thecivil service is hard pressed to attract'experts' or career executives due to lowwages in the public sector compared tothe private sector, so the civil servants'muddle through' somehow.

The Czech Republic is a stable countrywith unemployment at around 9 percentoverall (Prague has only 4%, but Ostravahas over 20%) and an average inflationrate of 4.5 percent. There is a minoritysocialist Government in power with theagreement of the 'right', which meansthat not much gets changed. However,elections will be held next year.

HungaryBy Katalin Bereczky, Managing Partner,

H. Neumann International

Executive search has only had a veryshort but intensive history in Hungary. Itstarted in 1989, and within a few years,it met worldwide standards, as ourinternational clients needed the samelevel service wherever they werepresent. We grew quickly as there were alot of changes taking place in the worldaround us. The Hungarian economy alsowent through the same period of rapiddevelopment.

In the beginning of the 90's, it was thefast-moving consumer goods sector thatwas hiring a lot of managers. A few yearslater, in 1995-97, it was the financialservices, banking and insurance sectorthat pressed us to find top executives.Today, it is the high-tech (IT, Internet)

Anna Kozlovskaya

Irena A. Brichta

S E A R C H - H E A D I N G




and telecom sectors that are prevalent.The requirements for managers have

also changed. Ten years ago, very youngpeople mainly from a western universityrose through the company ranks at anincredible rate. Now, quality counts. Topmanager's main characteristics are:proven success, corporate thinking, tohave a local initiative, and to be amanager but more importantly, a leader.Age is, therefore, not a key componentwhen all these elements are recognisedin an individual.

According to statistics, Hungarian ChiefExecutives earn 20-30 percent less thantheir Western European colleagues. In theearly 90's, expatriates were givenpreference but presently, companiesprefer to see local executives in toppositions.

Since international companiesgenerate 70 percent of economicperformance in Hungary, languages arecrucial for candidates seeking higherlevel positions. English is the mostpopular language, followed by German,French and Spanish.

In the future, executive search inHungary will need to adopt a fasterservice, as time is money. Other types ofconsulting should also be involved,keeping abreast of changes in any givenindustry and being a partner to our client.The need for executive search currentlyremains stable.

PolandBy Moritz Herfert, Consultant, Signium

International

Foreign investment [in Poland]exceeded US$ 40 billion in the last tenyears. Thus, international investors needPolish managers, who on the one hand,can work according to internationalmanagement standards, and on the other,know the specifics of the Polish market.International companies are therefore,the most appealing business targets forexecutive search consultants. Heidrick &Struggles, Korn/Ferry and Signium

International are probably the"heavyweights" of the market but there isstill strong competition from otherinternational networks from Antal toZehnder.

The search business is growing inalmost all areas such as retail, FMCG,automotive, construction, banking andinsurance and life sciences. High-tech,telecom and IT are thriving, too.

The salaries of Polish senior executivesare still lower than in Western Europe,but the gap is steadily closing. Stockoptions, performance related bonussystems and other fringe benefits arebecoming more common.

The average age of Polish managers isprobably lower than in Western Europe.In the early 90's, a high school graduatemay have started as a SalesRepresentative in and could now be aDistrict, Area, or Regional Sales Manager.This process has slowed down, but careersteps can still be achieved at a faster ratecompared to the rest of the world.

The number of top managementpositions held by expatriates isdecreasing since more internationalcompanies rely on "local" expertise. Anew phenomenon is that internationalcareers are being offered to Polishmanagers. Today, a Financial Controllermay be recruited for a local operation and

after some years sent abroad in a similarrole to return and end up as a CFO forCentral & Eastern Europe after only acouple of years.

English is the predominant foreignlanguage in Polish business followed byGerman, Russian, French and Italian.There are, of course, cultural differencesbetween Poland and the rest of theworld. Foreign investors should alwayskeep this in mind. However, the people,and especially the young generation areopen-minded and eager to work in aninternational surrounding withoutdenying their Polish heritage.

Internet recruiting [in Poland] does notyet play the role as in the US, but this isonly a matter of time. More Polishcompanies have learned how importanthuman resources are for the success oftheir business. These companies willincreasingly be business targets forexecutive search consultants.

It appears executive search is becomingan integral part of Eastern Europeanbusiness. Successful search firms haveadapted in two ways: throughspecialization into fast growing nichemarkets as well as through developing atrue regional network and businessdevelopment approach. Mr. Goodwin,summarizes these points: "The newsoverall is one of change anddevelopment…. What we have seen inthe economies of Eastern Europe is afundamental and integral desire tochange and participate in competitivemarkets. This desire will always prevailover short-term crisis or political doctrine.It is these driving forces that have turnedthe majority against communism in the1990's and what will enhance jobprospects in Europe as a whole."

Further Information

For more information on Eastern

Europe, visit:


Moritz Herfert

S E A R C H - P R O F I L E


PeopleA

Odgers, Ray & Berndtson

at the firm include Geoffrey Forester, co-Head of the Global Technology Practice,Colin Hislop, Senior Partner and NicholasMarsh, Head of the Technology Practice.Jonathan Kidd specializes in RetailFinancial Services and Victoria Provis'sfocus is on corporate marketing andcommunications functions. John Holmesand Niall Macdonald have now joined thefirm from The Berwick Group.

Of course, retaining and motivating allthis executive talent is essential. Mr.Boggis-Rolfe explains that he tries tocreate an organization that people wantto be a part of and most importantly -proud of. "The branding, theinfrastructure, the 'look and feel' of aplace, the culture, teamwork and pay allplay important parts in attracting andkeeping talented and ambitious people."

To help achieve this ideal, Odgers, Ray& Berndtson has adopted a non-hierarchical organization. He believes thiscreates an unrestricted culture whereeveryone is on the same playing field,working as a united team.

"As companies grow bigger, it getsharder for people to share information,"he adds. Weekly meetings at the Londonoffice are one of the ways the firm haschosen to share company information.Each week a member of staff, from ajunior consultant to a senior-level

In May 2000, Odgers Internationalbased in London, acquired Ray &Berndtson UK and joined Ray &

Berndtson, the international partnershipin which some offices are independentlyowned and managed and others havecross-shareholdings. The acquisitionprovided Odgers of Ray & Berndtson withthe global reach of 50 offices worldwide.In late February, the company completedthe acquisition of The Berwick Group, aspecialist Financial Services boutiquebased in the city of London made up of 15consultants.

Odgers, Ray & Berndtson nowcombines one of the UK's longestestablished search businesses with arespected City specialist, one of Europe'sleading partnerships and a top ten USfirm. The company now has a staff of over160 partners, consultants, researchersand support staff. The firm is rankednumber six amongst the top ten searchfirms in the UK by turnover; turnovergrew from £3.5 million in 1999 to £17million in 2001 including Berwick.Richard Boggis-Rolfe, Chief Executive,reveals the strategy behind this growth.

"To be a successful executive searchcompany, the single most important thingis to attract, retain and motivate the rightpeople," he says. He outlines three mainareas that he considers to be factors in

the company's growth: culture andvalues, infrastructure and a global brandand reach.

Attracting talent is vital to anycompany, particularly in search, wherethe term 'big billers' is part of theindustry's ethos. Odgers, Ray & Berndtsonis certainly not short of high profilers onits list of consultants. One of the mostprominent is Britain's former HealthSecretary, Virginia Bottomley, whospecializes in recruiting for the not-for-profit sector which includes charities,health and government organizations.Ms. Bottomley was the youngest womanever to join the British Cabinet, which shedid in 1992, having been elected to theHouse of Commons in 1984.

Additionally, Roddy Gow, who headsup the Financial Services Practice,previously served as Managing Director ofthe London and New York offices ofRussell Reynolds as well as ManagingDirector International. He then spent aperiod as Chief Executive Officer at theGKR Group and held senior positions inexecutive search in the USA for ten years.Gary Luddington joined Odgers as aPartner in the Board and CommercialPractice from Norman BroadbentInternational where in 1995 he becameManaging Director and in 1998,Chairman. Other prestigious consultants

By Jan Iverson-Pearson, search-consult

S E A R C H - P R O F I L E


executive, gives a short presentation onone aspect of the business. Speakers arealso invited from their other internationaloffices from the group, to give a moreglobal appeal.

The company also believes that"values" are more important than "a greatbody of rules". Some rules are necessarybut, in his experience, it is easier to getpeople to work together if the approachfrom management is perceived as adeclaration rather than an imperative. A"body of values" is perceived as thebackbone of the company.

The firm's infrastructure is based onmeeting the needs of its employees."My role is to create a culture and aninfrastructure which supports creativity,and sets standards in processes andquality. The ideal is to combine theculture and teamwork of a smallboutique with the branding and support

systems of a big firm." Mr. Boggis-Rolfe is quick to point out

that this progressive work culture iscombined with an aggressivecommitment to succeed. "Our objective isto be recognized as amongst the verybest in our market - unambiguously inthe premier league." He understands thatOdgers, Ray & Berndtson may not be the"biggest" of the search firms but their aimis to be "the most effective." "We all wantto do important searches for the bestclients," he adds.

Commenting on the future, he says,"The important thing is that everyoneknows that we mean to be the best in thebusiness. There are several ways to thetop. The key is to have core values andstandards, to stick to them and to makesure that all our talented individualistsbuy in. Rigid plans don't work and no onecan be sure how we will look in five

years. What is fixed is our determinationto provide world class executive searchby being a firm which attracts, keeps andmotivates the best consultants."

Although the business has someventure capital backing, these investorshave only a small stake and cannot forcethe company to be sold or floated. He hasno plans in this direction. "Why sell asuccessful business unless there is abetter investment? I can't see one! Thepublicly quoted search businesses are nothappy places: floatation does not helpclients, it does the opposite in fact andthe consultants who didn't make moneyfrom the floats don't want to work foroutside shareholders. Our structure isbetter for our people and our clients."

Odgers, Ray & Berndtson's growthstrategy is clearly based on people: "Ourpeople are winners and our values andculture support them. We fosterteamwork and creativity and we aim tobe truly expert in our client's business."

The future of the firm looks positive.The recent purchase of The BerwickGroup represents a major recruitmentstep. This move complements thesignificant Ray & Berndtson FinancialServices network in Germany and the USand raises the profile and impact ofOdgers, Ray & Berndtson in globalfinancial markets.r information on The Hever Amrop

PartnershipProfile

Ric

hard

Bog

gis-

Rol

fe

Richard Boggis-Rolfe began his career in executive search with

Russell Reynolds Associates and became a Director in their London

office. He went on to spend 14 years with Norman Broadbent

International. He established Norman Broadbent's Hong Kong

office as its first Managing Director and then started and managed

NB Selection.

Prior to establishing the

International Resources

Group, he was the Group

Managing Director of BNB

Resources plc, the parent

company of Norman

Broadbent. He was also

Chairman of Barkers Human

Resources, Goodman Graham,

the specialists in technology

recruitment, and ATC, a major

international training

company.

He led the acquisition of Odgers International from its founder, Ian

Odgers, in February 1998 and negotiated the acquisition of Ray &

Berndtson to form Odgers, Ray & Berndtson.


For more information on Odgers, Ray &

Berndtson, visit:

Web: www.odgers.com

“The publicly quoted searchbusinesses are nothappy places: floatationdoes not help clients, itdoes the opposite in fact...Our structure isbetter for our peopleand our clients...”

S E A R C H - P E O P L E


TMP Worldwide Executive Search Hires NewPrincipal for Paris OfficeJennifer Chase has been hired as a Principal in the Parisoffice of TMP Worldwide Executive Search and will be amember of the company's Global Industrial andHealthcare Sectors and Manufacturing Practice. Ms. Chasejoins the firm from Korn/Ferry International in New Yorkwhere she recruited for an array of science-based industries,including biotech, specialty chemicals, healthcare andmanufacturing among others.Prior to joining Korn/Ferry, Ms. Chase was the ProductDevelopment and Business Manager for the Cosmetic andDetergency Enterprise at Rhone-Poulence S.A. (Aventis). Shealso served as the company's European Sales Manager anddeveloped a market focused sales distribution network.

Two New Appointments at Egon ZehnderInternational Inc.Egon Zehnder International Inc., executive search firm,has named Jon Martin as a Partner of the global firm andhas hired Rashid Wasti to join the Toronto practice. Mr.Martin joined Egon Zehnder International in 1994, where hefocused on senior marketing, logistics/ supply chain andgeneral management searches. He is an active member ofthe global Energy and Process Industries practice group andthe Services Industry practice group. Mr. Martin previouslyworked with Ernst & Young Management Consultants in itsmarketing and strategy practice and also worked in thecorporate development office of Imasco Ltd.Mr. Wasti joins the firm from Boston Consulting Group, wherehe worked on a variety of strategy assignments for NorthAmerican clients in the consumer goods and retail practiceand the e-commerce practice. Previously, he was a BrandManager in Proctor & Gamble's health and beauty carebusiness, working in Switzerland, Saudi Arabia and Canada.

Korn/Ferry Names Managing Director ofAmericas for Board Services PracticeKorn/Ferry International has named Charles H. King asthe new Managing Director of the Americas for the BoardServices Practice. Mr. King will be based in New York. Mr.King was a former senior partner at Nordeman Grimm, Inc.,where he established their board practice. He has alsoworked as managing director of Donaldson Enterprises, aNew York based private equity firm. He served as an officerin the United States Coast Guard, which included a stint as amilitary aide to the Vice President.Peter Crist, Vice Chairman and head of Global Board Servicessays, "Chuck has the perfect background to expand ourBoard Practice. He has successfully recruited directors formany of the top companies in the US, including Aetna,Chrysler, Exxon-Mobil, Halliburton, RJR Nabisco, SouthernCompany and numerous others. He is particularly wellknown for his ability to identify and recruit diversitycandidates for board service. A frequent speaker on thegovernance circuit, he has addressed audiences in the US,Europe and Latin America."

June Eichbaum Joins Heidrick & Struggles'New York OfficeJune Eichbaum has joined Heidrick & Struggles' NewYork office as a Partner. Ms. Eichbaum is a member of theProfessional Services Practice and is the firm's firstconsultant totally dedicated to legal services searches.Before joining Heidrick & Struggles, she was a ManagingPartner for Major, Hagen & Africa, a national legal searchfirm. She also practiced law for twelve years, in the publicand private sectors, practicing property and corporate lawwith two search firms, as well as working in-house for twoclients, Time Inc. and CBS, handling business developmentfor the pre-internet launch of Prodigy.

Michael Moran to Head Up BBMMichael Moran, executive director at MeridianConsulting, the London City outplacement and careermanagement consultants, is to head up BBM, PennaHoldings' City executive search specialists. Linda Jackson,currently Mr. Moran's deputy, will take over day-to-daymanagement at Meridian. BBM and Meridian Consulting areboth part of the Penna Group, the human capital consultancy.

New Partner at Ray & Berndtson in NorwayEbbe Jacobsen is a new partner at Ray & Berndtson inNorway.

New Research Manager at Ray & Berndtson inNorwayMarita Christensen has joined Ray & Berndtson in Norwayas Research Manager. She previously worked for ITExecutive Search & Selection.

Heidrick & Struggles Names New Chief LegalOfficer and Chief Corporate DevelopmentOfficerStephanie W. Abramson has been named as Chief LegalOfficer and Chief Corporate Development Officer atHeidrick & Struggles International. Based out of New York,Ms. Abramson will be responsible for the legal and corporatedevelopment activities and, on an interim basis, the humanresources function. She succeeds Chief Administrative Officerand General Counsel Richard D. Nelson, who will continue towork with executive management on significant strategicinitiatives.Previously, Ms. Abramson was Executive Vice President,General Counsel and Corporate Secretary at Young & RubicanInc. She also worked as a senior partner of Morgan, Lewis &Bockius in New York, where she specialized in corporate andsecurities law and held various management positions.

John Hasenauer Joins Christian & Timbers inStamfordJohn Hasenauer has joined Christian & Timbers as a vicepresident in the firm's Stamford office He will beresponsible for building a global asset management andinsurance practice with select clients.Previously, Mr. Hasenauer was a vice president/ searchconsultant with Warren International. Before entering thesearch industry, he spent 10 years in financial services. Heserved as vice president of institutional sales with AeltusInvestment Management and as northeast sales managerwith the WEFA Group. Mr. Hasenauer began his career infinancial services with Citicorp, last serving as vice presidentof institutional sales in the mortgage-backed andgovernment bond group.

New Vice President at Christian & Timbers'London OfficeSimon Francis has joined Christian & Timbers as a VicePresident in the firm's London office. Mr. Francis will focuson high technology markets. He joins Christian & Timbersfrom Heidrick & Struggles where he was the highest billingprincipal worldwide in the firm's information technologypractice. Mr. Francis served in London and Menlo Park,California.

Kirk Palmer & Associates AnnouncesAppointment of Jerald Politzer as ManagingDirector, Business DevelopmentKirk Palmer & Associates Inc, an executive search firmserving the retail, fashion and apparel industries based inNew York, has announced the appointment of JeraldPolitzer as Managing Director, Business Development.Previously, Mr. Politzer was Chairman and Chief ExecutiveOfficer of Salant Corporation, a $380 million publicly heldmen's apparel company. Prior to joining Salant in 1997, hewas Executive Vice President of Melville Corporation, an $11billion public retail holding company.Mr. Politzer stated, "The transition into the executive searchfield allows me to leverage my extensive network andknowledge of the industry. I look forward to working withour business partners to assist them in their managementneeds. Kirk and his group have a great reputation in theindustry and I am thrilled to be a part of this dynamicorganization."

New Appointments at Hogett BowersHogget Bowers, an executive search and selection firmbased in London has appointed Peter Sandham as ChiefExecutive Officer and Karen Wilson as Chief OperatingOfficer.

New Appointments at Ruston PooleInternationalLondon-based executive search group, Ruston PooleInternational, a Healthcare, Pharmaceutical and Biotechspecialist, has announced a number of key executiveappointments to its consultancy team. Dr. Tony Bradshawand Ann Gales have been appointed as Senior SearchConsultants. Mr. Bradshaw's background is in biotechnologyand business development. Ms. Gales has broad experiencein both the animal health and pharmaceutical industries.Dr. Paul Rodgers has been appointed to set up and run a newRuston Poole mentoring service, aimed at providing practicalhuman resources support to early stage life sciencecompanies throughout Europe.There are now seven members in Ruston Poole's searchteam, led by founder and Managing Director, DavidCollingham.

Sweet to Join Alternative ResourcesCorporation's Board of DirectorsAlternative Resources Corporation (ARC), a provider ofinformation technology services has appointed CharlesW. Sweet, Chairman, A.T. Kearney Executive Search, tothe board of directors. Mr. Sweet joins the board havinghad over 29 years of executive search experience.Commenting on his recent appointment, Mr. Sweet stated, "Iam delighted to be joining the board of ARC. I believe thatARC is positioned well in a maturing industry and I amcommitted in helping in any way I can with the continuationof the turnaround that has been in motion for severalmonths."

TMP Worldwide Executive Search Hires AlanWilson to run its Operations in Australia andNew ZealandTMP Worldwide Executive Search has recruited AlanWilson to head the company's operations in Australia andNew Zealand. Mr. Wilson founded the Melbourne office ofHeidrick & Struggles in October 1998, and quickly built it intoa major force in industrial, natural resources, utilities,financial services and e-commerce searches. He rankedamong the firm's leading revenue generators in Australia.Mr. Wilson will be based in the Melbourne office of TMPWorldwide Executive Search. His expertise focuses on e-business, infrastructure and finance searches across AsiaPacific.Mr. Wilson has been a Partner of Heidrick & Struggles since1998 and joined the firm from Russell Reynolds Associates.Prior to entering executive search, he directed aninternational technology research program. Previously, heworked in stock broking and investment banking, and wasmanaging director of two publicly listed investmentcompanies with shareholdings in activities ranging frommining to meat export.

Russell Reynolds Hire Derbyshire in CanadaDr. Mark Derbyshire has joined Russell ReynoldsAssociates, Canada as Executive Director and head ofRetail and Consumer search. He joins the firm from theCanadian Tire University were he served as ManagingDirector. He holds a PhD in Organizational Behavior from theUniversity of San Jose and an M.B.A. from the University ofMontana."We are pleased to have someone of Mark's caliber as part ofour team," said Paul Cantor, Managing Director, RussellReynolds Associates, Canada. "Mark's appointmentcharacterizes our focus on identifying the competenciesneeded to develop leadership in Canadian firms as well asthe steady growth of our own organization. His solid trackrecord in human resources and organizational developmentcoupled with his experience in the consumer sector makehim an excellent fit for the firm's direction."

New Partner at Heidrick & Struggles inFrankfurtReinhold Thiele of Heidrick & StrugglesUnternehmensberatung in Frankfurt has been madeManaging Partner of the firm's Global Industrial Practiceand Global Automotive Speciality Practice. He started hiscareer with Ford Motor Company in England before movingto Arthur D Little, management consultants, to work onorganizational and logistics projects for clients in theautomotive and other manufacturing industries.

To notify us of any new members to your organization email: [email protected]

S E A R C H - R E V I E W




New YorkFebruary 28, 2001

The first of the Executive SearchInternational Debates 2001 wasrecently held in New York. Lee Miller,

Chair of the International Association ofCorporate and Professional Recruiters(IACPR) moderated at the event. Thepanelists were Chris Clarke, President,Boyden Global Executive Search; BradDewey, Managing Director, EuropeanOperations, Christian & Timbers; WilliamGuy, Chairman & CEO, CornerstoneInternational Group;Les Stern, Partner,Heidrick & Struggles.Questions came via e-mail from search firmsacross the globe andfrom the attendingdelegates. Eachspeaker gave a 10-minute presentation. Afull review of the talkscan be found atw w w . s e a r c h -consult.com. Detailedare a few keyquestions andanswers from thedebate.

Q. Will there be a search industry in tenyears and if so, what is it going to looklike?

A. Chris Clarke (CC): Our view is that thesearch industry will have a static start thisyear and it will continue growing based onthe 'war for talent' concept particularly inAsia, where we are opening a lot of offices.However, what I think will be moreinteresting is the structure…whereeveryone will have access to free or lowcost data. There will continue to be aretained executive search industry because

clients want the 'high-touch' as well as the'high-tech' candidates and candidates wantto be solicited. UBS Walburg says, "Thesearch industry has evolved to meet theclient's needs." We also believe professionalservice firms belong in privateownership…we see firms today in IPO'scoming out and going back into the privatesector.

Les Stern (LS): I think …being part of a firmpublicly held, we have seen absolutely nodifference in how we operate asprofessionals; as we are share holders and

are tied to thebusiness…I thinkthe knowledge wehave as aprofession is tooclosely controlled. Ithink we are in aposition oftransition. I wouldlike to see whatTMP does. Thequestion the IACPRand the AESC havebeen asking is, "inten years will weas executive searchc o n s u l t a n t sbecome agents?"

Q. What is the fee structure that you areusing to bill clients?

A. William Guy (WG): From our survey,open-ended fees have 'the look of evil'. Oneargument is to have fixed fees.

LS: From experience of working in aboutique…up to a large firm, I realize we,search firms, have three fee structures. Oneis the high standard that Heidricks stand by,which is one third. Secondly, we have largeclient relationships where there arenegotiations, which are usually globalclients. The third, because of the nature ofthe work that we do at financial servicesenterprise, where we are doing searches forpeople who are making one, two or threemillion or more, there is a cap on feesusually up to $350,000 to the million dollarlevel.

CC: The global agreement will not work.

The more the client pays you to do anassignment, the more you have to pay for itand the more money you get. It's clearly aperverse incentive. I would just like to sayanother word about the global agreement;HR departments at the center love globalagreements because they can go back andshow how they have negotiated the feesdown from 33% to as low as 20% or 18%,which is what some of our competitors aregiving. You then go out into the field to say,

India, and the global agreements don'tcount for anything because it is adecentralized organization, they buy locallyand they're using their friends. So, I thinkthose people who are giving away very lowfees because they think they are going toget this big global agreement working allover the world, are very foolish…I thinkthey need to tie that with some sort ofoverride discount…I also think 22% is asign of desperation to keep the stock markethappy with the growth that we are making.

The caps we also observe…there are someWall Street firms that cap their fees at$450,000 which is a lot of money for asearch but if a guy is getting paid 15 millionit doesn't seem so much.

Brad Dewey (BD): In regards to clientsatisfaction…there needs to be flexibility inhow fees are structured. Around 75% of ourwork is with pre IPO companies or recentlyIPO companies. We, as a matter of routine,include in our fee structure, equity that vestsin the first year so that our fee is one thirdof candidates first year's total compensationincluding vesting equity. We take the first

year in stock. I think the jury is still out onthe salability of equity fees for publicly heldcompanies but that's been our history todate. Perhaps the main point would be notto have the structure of it too rigid.

WG: We have clients that prefer for us totake options or warrants.

BD: Our fee is linked to the shareholdervalue that is created over some time periodand not to some arbitrary compensationstructure to the candidate.

Q. Clients want candidates to bepresented in real/Internet time. Can youprovide some time frames?

A. WG: The majority of our clients do notfavor the 90-day formula.

LS: Statistically, it's 90 to 120 days. Ofcourse, people want it in 30 days - butworking through the process…this will nothappen.

CC: On the whole, 30 days is good, 60 days,not bad, 90 days is bordering onunacceptable. Some quoted companies arenow dropping clients two thirds of the wayinto an assignment because they cannotfinish it within 90 days.

BD: Our searches are designed to take 100

Executive Search InternationalDebates 2001:


New York

The Panel

Brad Dewey

Delegates

Lee Miller


“I think the jury is still outon the salability ofequity fees forpublicly heldcompanies”





days and we are currently averaging 117.Our researchers are programmed to presentthe top candidates in 10 days…. We havefound engaging the client very early is veryhelpful.

Q. How many searches are acceptable fora search consultant to handle at the sametime?

A. BD: Three or four - in ten working dayswe have the first output from theresearchers.CC: There isn't a central limit. We don't thinkten days is enough time for research. We didnot decide to do a centralized researchcenter because we found most researchers

also wanted to be search consultants anddue to time zone issues.

BD: We've clearly separated our knowledgeresearch from our human contact research.

LS: It depends on the resources you have. Ittends to be six to eight but can go up to 10.

Sometimes you'll be waiting for the client.The question is: is the client informed and‘in-sync’ and are we delivering?

WG: You can't put a fixed number on it. Oneof the ways to relieve the problem, whenyou're recruiting existing searchprofessionals from other firms, is to ask thefirm: do they, the consultants, have areputation of turning down clients whenthey are too busy? What's right is to havethe backbone to turn down searches. It's thesolution.

Q. In terms of stock options, if you havean ownership in your client - how canyou be objective?

A. CC: The answer would be - who is theclient?

BD: We take stock routinely. Our argument isstock options make us a business partner -we do this only on CEO searches. It is seenas synergy with our clients where ourcompensation is linked to shareholdervalue. That does put us on the same side asthe shareholder.

LS: If the firm has a vested interest throughan equity position, then your objectivity is

even more intensified because if you do nothelp select the best person, that resourceyou have in equity or warrants, is not goingto be worth much as it would be if you'rediligent about who it is you're recruiting.

For a full review of the New York debatelog onto the subscriber's area of the search-consult website at www.search-consult.com. A webcast of the full New Yorkdebate is also available at this address.

Les Stern

Chris Clarke

Further Information

Subsequent debates will be held in

London, Frankfurt, Paris, Amsterdam

and Brussels. Please visit our website for

full details.:


“stock options make us abusiness partner - we dothis only on CEOsearches”

S E A R C H - F E A T U R E




Today, we are all aware of the urgentdemand for top talent, combinedwith the emergence of online

recruitment and the impact this is havingon the executive search industry. The law ofsupply and demand requires search firms tomake tough decisions about the use of theirtime without compromising the quality of asearch. The effective use of informationabout organizations and key people is bothvital and valuable when sourcing a field ofcandidates for clients. The solution may notalways involve working longer hours andoverloading an already exhausted internalresearch team but to employ a little helpfrom the world of independent researchers.But what can executive search firms expectwhen hiring an independent researcher orresearch firm?

Independent researchers can provide avast range of services from providing atarget list of companies to name generation.It is more common for independentresearchers in the UK and Europe tobecome more directly involved with theconsultant and even the client, as theytypically carry out the entire researchprocess for their customers.

Corinne Beeby, Managing Director ofCapita Research in South Poynton, England,says, "Search is becoming a tool usedacross a wider cross section of jobs; it is amethodology being utilized at lower salarylevels than in the past. Therefore, the need

for research has increased. However, asinternal research is a 'cost,' it is becomingmore prevalent to accept that an elementwill be outsourced."

She describes a typical Capitaassignment: "There is an initial briefingbetween the consultant and Capitaresearcher. This is done either face-to-faceor by phone. Capita then provide a targetlist of companies. The companies' structuresare then researched to identify likely targetindividuals. All potential candidates areapproached and their curricula vitae [orrésumés] are forwarded for the client'sconsideration. A final report is presenteddetailing the results of the contacts madeand regular contact is maintained with theconsultant at all stages of the assignment."

Daphne Silvester, Principal of Silvester &Company based in London, feels that somesearch firms, particularly those in theprocess of building up their business useindependent researchers like a lamp to"switch on and off" when they please. Inher view, this may be effective in terms ofreducing variable costs, but there is also aquestion of convenience and quality ofservice.

Ms. Silvester explains: "Often a newsearch firm is nervous about spendingmoney and opts to use independentresearchers as a way of controlling costs.They then get a nasty surprise when theyfind that good researchers are rarely free at

The convenience factor is also one of theprime motivators for search firms to hireindependent researchers. "Using somefreelancers provides maximum flexibilityduring the periodic peaks and valleys ofany business," says Russ Towne, ManagingPartner of RTA Recruiting Research,Campbell, California. "We support variouscyclical industries, and they're go fromhiring madly for a period of time to hiringnot at all, or very little."

It appears this trend is starting to spreadthrough parts of Europe, particularly in theareas where executive search is beginningto emerge such as Southern and EasternEurope: Italy, Turkey and Austria. Someresearchers claim that executive searchfirms, who traditionally do not outsourcetheir research, are using independentresearchers in these geographical areas fortheir local knowledge, linguistic skills,specialist projects or for the simple fact thattheir own researchers are overbooked.

Nayantara Ghosh, Head of GhoshProfessional Research, in Vienna startedher business as she found that there werefew "properly qualified" researchers inEurope as a whole, particularly in EasternEurope. She previously worked as aconsultant for a leading internationalexecutive search firm and says local searchfirms use her services because, "they do nothave their own in-house researchers as it istoo expensive." In relation to the 'top'executive search firms who have movedinto her area she adds: "I have built quite areputation and am well known in my area.I deliver what the search firms need andcost effectively. I am also just as quick as the'big players' and more flexible."

Ms. Ghosh reinforced a viewpoint madeby a Director of a leading corporateresearch company in France indicating thatmost independent researchers in Europeare "one person at a desk with a telephoneand a laptop." This does not imply that thisis not the case in other parts of the world,but some see this as a disadvantage interms of the quality of a search.

Kirsty Young, Director at ArmstrongCraven, in Manchester, England explainswhy: "There are a number of very goodone-man-band independent researchers

all…but it's a good jumping-off point - andit's quick."

However, Jean-Phillippe Saint-Geours,Managing Partner at Heidrick & Struggles'Paris office, states that they do not useindependent researchers. He cited the mainreason for their integrated search processwas that Heidrick & Struggles prefer theirconsultants to be 'home-grown': trained in-house in line with company practices. Headded that most successful consultantsbecome partners. Keeping the searchprocess in-house allows them to be moreconfident and familiar with their searches.In terms of cost, he said, "the investmentswere very important and we aredeveloping more and more". He agreedwith the sentiment that in the long runhaving in-house research was more cost-effective. "If you are doing it yourself - youcan control the costs."

On the other hand, Ms. Leonard believesan in-house research operation can becostly: "When you have internal research,they will be employed on a full-time basis.What they are paying for in terms ofresearch is fixed. A lot of companies bill myfees to the client so they are notresponsible. There are no salaries and nooverheads." She continues: "A lot of myclients like their researchers to be a thirdparty. In-house research capability islimited to the size of the department andthey may not be able to handle large searchloads as they do not have the resources todo so." Ms. Leonard also warned that a lotof in-house researchers leave to set-up inbusiness on their own as they find that theycan make more money.

The total fee for the researcher isvariable, depending on the servicesrequested. In the US, independentresearchers tend to charge by the hour. Inthe UK and Europe, they tend to charge adaily rate. Customers may hope to bypassthe uncertainty of hourly rates by asking forestimates, but researchers say that they arelittle more than flat fees in disguise. "Ialways charge daily rates," says Ms.Silvester. " I think it's fatal to charge flat feeson an assignment basis because you willalways underestimate the time and lose out

Executive Research:

Nayantara Ghosh

who have opted to be 'independent'. Thetwo main reasons why Armstrong Craven,as a fully resourced research company issuccessful are: the quality of theresearchers we are able to attract to ourbusiness and the sophistication of our in-house technology resources which allow usto undertake large-scale, internationalsearches very effectively, and especiallywithin notoriously competitive and fastmoving sectors such as technology andconsulting. Our clients want a researchpartner that have in-house on-linedatabases, press monitoring services, multi-lingual research teams and specialistresearchers in certain markets. Forappropriate searches, Armstrong Cravenputs project teams together with two orthree researchers working on oneassignment with a designated AccountManager leading the project."

Nevertheless, it appears that some ofthese 'one-man-bands' in Europe opt out ofusing databases altogether and do a "tailor-made" or original research for each newassignment. The implication is not thatdatabases aren't useful; they are. A numberof recruiters, particularly those who work atlarge companies with sizeable databasesreport that they are satisfied with the leadsthat their file searches provide.

Researcher Joan Leonard of Tech NamesInc. in Alamo, California, offers bothservices. "The file search has been reallyuseful for a lot of clients, because it getsthem started," she says. "They know they'reprobably going to do customizedresearch…it's not the be-all and end-

continued>

short notice, so the next stage is typically todevelop a long-term relationship with oneor two researchers. In this way, theresearchers get to know the firm's style andrequirements and can work almost asinternal members of the firm."

She also points out that the availibility isusually the main reason companieseventually bring their research process in-house. "For a while there is a balance withthe use of independent researchers butsoon [search firms] find that they can't copeeasily and as fast as they want to, so inorder to solve the problem they decide tobring it in-house."


The Outsourceoption

Joan Leonard

S E A R C H - C O M M E N T


Success in today's competitivebusiness environment depends ongetting and keeping the most

talented employees. The executive searchfirms that can help us achieve this are thefirms that we will select, and moreimportantly, that we will keep comingback to. In choosing a search firm tohandle a specific search, companiestypically look for expertise and judgment.All things being equal, a third factorusually comes into play - relationships.

Search firms are retained for theirknowledge and their contacts.Regardless, of the level of internalexpertise a company may have, outsiderecruiters are hired to seek candidates inplaces where companies would notconsider looking or in areas they may nothave access to. Search consultants areexpected to have in depth knowledge ofspecific industries and/or specific jobfunctions. This expertise is necessary inorder be able to quickly identify the bestavailable candidates for the positionsthey are trying to fill. In today's executivesearch business there is no time for onthe job training.

Companies often select firms based onthe expertise of specific recruiters withinthe firm, rather than based on the firm'soverall reputation and capabilities. Theymay want to retain a different firm basedon its expertise for each search thecompany conducts. Often, however,companies do not know who has theexpertise they need for a specific search,

The Client'sPoint ofView

nor do they have the time or the ability tomake such determinations for eachindividual search. As a result, a companymay enter into a broader relationshipwith a search firm that has expertise in avariety of areas. Not only does thisprovide the advantage of only having togo through the selection process once (orat least only periodically), it also enablesthe selected firm to become familiar withthe company and its culture. Lastly, thisapproach usually provides the addedbenefit of enabling the company tonegotiate better financial terms from theretained firm. Assistance from the searchconsultant in closing the deal or at leastnot impeding it is also very important tothe client.

The best available candidates cannotbe identified in the abstract. This iswhere judgement comes into play.Companies are seeking executiverecruiters who can not only locate talentbut also match that talent to the specificneeds of management. Therefore, thesearch consultant must understand, notonly the core competencies required forthe position, but also the culture of thecompany where the individual will beworking. Most candidates fail not for lackof qualifications, but because they areunable to function successfully within thecorporate culture. This is whererelationships come in. If the recruiter hasworked with the company in the past,that experience can prove invaluable inspeeding the search and in its ultimate

success. However, knowing the industry,the position and the company are onething, but consultants should also beresponsive and adjust to the feedbackthey receive from the clients as well.

Another factor that comes into play inthe selection process is trust. Companieswant recruiters who will treat their needsas paramount. Practices such as parallelprocessing, where a candidate ispresented to several companies at thesame time, tend to undermine that trust.Similarly, expertise is of little value if toomany of the best candidates are off limitsdue to relationships with other clients orif the best candidates are sent to othercompanies first.

The best recruiters enable us to hire thebest talent. Bad experiences between aclient and a consultant usually relate to abreakdown of communications. I do notfeel that standards are slipping and frommy experience I believe the search firms Iuse provide value. Search consultantsbring to the search, expertise about theindustry and the functions for which theyare recruiting. They also obtain athorough understanding of the company,its culture, its needs, and what it has tooffer. This knowledge enables them tocomplete searches with the speedrequired for companies to compete intoday's economy. The recruiters whobring these attributes to the table are theones that we will retain.

What Are We Searching for When Choosing a Search Firm?

By Lee E. Miller, Consultant, Advanced Human Resources Group Inc and Chair InternationalAssociation of Corporate and Professional RecruitersBy Lee E. Miller, Consultant, Advanced Human Resources Group Inc and Chair InternationalAssociation of Corporate and Professional Recruiters

and the client will know and you may bedoing months of work for free." She says ifa potential client insists on a flat fee, sherefuses to take on the assignment.

HTC Research in Martinez, Californiaspecializes in quick-turnaround namegeneration and represents a minority offirms who charge flat fees. President JesseHahn argues that his customers prefer toknow what they are spending up front, "Ibelieve we should charge for the workwe've done. If it takes us a week to getthose 20 names, then it's our loss. If it takesus an hour to get 20 names, it's our gain."

So how do search firms choose and use aresearcher successfully? " In terms ofchoosing a researcher, you would tend towork with the one you know," says Ms.Young. "As for looking for a new researcher,then choose a research supplier on thebasis of recommendations and referrals, optto look for their qualifications. Are they trulyprofessional in their own right? Howexperienced are they in the markets and inindustry sectors?"

Ms. Young also advises that search firmsrequest that their potential researchpartners demonstrate their internationalreach and experience "this can be donewithout breaking any confidentiality orcausing any conflicts of interest". She adds:"The quality of a researcher's database willbe confirmed by how researchers collate,store and generally manage & presentinformation to their clients - we are oftenasked to host our clients' databases on theirbehalf."

Most independent researchers agree thatmutual respect and communication is thekey to a successful relationship. "Everyonewants research 'now' and they do not wantit in a week but within a few days," saysMs. Leonard. Taking into account theincreased speed at which searches takeplace, it is crucial that search firms find aresearcher who is a good match for them,both in industry expertise and personalstyle. If a search firm can negotiate acongenial working relationship with theresearcher, it may help to make them moreproductive and successful then they haveever been.

1. EngagementPrior to engagement, the search and selectionfirm (hereafter referred to as "the Firm") shouldestablish with the Independent Researcher(hereafter referred to as "the Researcher") thatthe industry sector and functional discipline ofthe prospective Project is one they are capable ofcovering. The Researcher should be prepared toprovide the Firm with a document detailing theResearch activities they offer together with apersonal profile (such as the profile containedwithin the ERA Independents List) andreferences, should this be requested by the Firm.The Firm may ask the Researcher about theresearch materials they have access to.2. Trading Terms and ConditionsThe Researcher is recommended to prepare adocument outlining their trading terms andconditions. This document should include anoutline of their method of charging: per hour/perdiem/per project etc. It should also coverpayment terms and details of how expenses arecalculated and charged. It should also deal withbooking or mid-project cancellation.Researchersare advised to seek professional advice whendrawing up terms and conditions of trading.3. BriefingIt is recommended that a briefing appointmentbe arranged between the firm and theResearcher, either in the form of a face to facemeeting or on the telephone, where all factorsrelating to the Project, both in terms of the workrequired and issues such as timing, costs etc. canbe provisionally agreed in advance.4. TimingIt is advised that, where possible in advance,mutually agreed Research time limits for theproposed Project should be discussed andagreed between the firm and the Researcher. Ifthe Researcher subsequently is unable to keepwithin these time limits, then they should advisethe firm accordingly as soon as possible.5. ConfirmationIn order to avoid any misunderstanding and toestablish a successful working relationshipbetween the Firm and the Researcher, it isrecommended that the Researcher provides thefirm with a written confirmation of the ResearchProject in its entirety at the outset.6. Maintaining ContactIt is important that regular contact is maintainedbetween the Firm and the Researcher in order toensure that the research requested is beingprovided within the time scales that have beenmutually agreed and to avoid misunderstandingsin the event that the research should take longerand therefore prove to be potentially moreexpensive than originally anticipated. It istherefore advisable for the Researcher to providethe Firm with regular progress reports and theformat of these reports should be agreed withthe Firm in advance.

7. Results and RealismIt is important that the Firm and the Researchershould establish between them what is expectedin terms of results. The Researcher shouldensure that the Firm understands that they willresearch a particular market or functional sectorto the best of their ability within agreed timescales but will not, however be able to"guarantee" to provide a successful candidate.Itshould be understood that the Firm is paying forthe Researcher's time and expertise and thatunder normal circumstances, if the ResearchProject is positioned correctly, the Researchershould be capable of providing the Firm with asuitable range of candidates for which to make asuccessful selection.The onus is on both partiesto make sure that the parameters being searchedagainst are realistic and, if results are notforthcoming, to re-assess and review thesituation. Some Firms, who may not have hadprevious experience of employing IndependentResearchers, may think their services will"guarantee" a successful candidate. TheResearcher should make it clear whether or notthis is the service they are providing. Thenormal understanding of Executive Research is aservice which aims to research a particularmarket/functional sector to the best of theResearcher's abilities and to provide resultscommensurate with candidate skills andavailability in the market at any given time.8. DissatisfactionIf, at any time during the Research Project, theFirm is unhappy with the research or servicebeing provided by the Researcher, they shouldcommunicate this to the Researcherimmediately. It is recommended that theresearch activity should stop at this point andthe Researcher's account be settled up to thisdate.9. Payment of FeesPrompt payment of fees according to theResearcher's trading terms and conditions isalways expected. Most Independents are soletraders and are invariably working on amaximum of one or two projects at any one time.Prompt payment of fees can result in a numberof advantages for the Firm - i) The Researcherwill often give the Firm preferred client statusover and above their other clients.ii) T h eResearcher may make themselves more readilyavailable for Research projects for the Firm in thefuture.iii) The Firm may be better positioned tonegotiate preferential terms with theResearcher.

The above guidelines have been drawn up by the Executive

Research Association in response to "member" and "user"

demand to help to achieve a successful working relationship

between the firm and the researcher. They are not legally

binding and are available for the purposes of guidance only.



Guidelines for Executive Search and Selection Firmsand the Independent Researchers Employed by Them

E-mail: [email protected]

search-consult issue 2

Documents

executive search copyright

boyden global executive

us ceo

foods e

ethics check

marc rich

us delegates

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