Executive Recruiter News, October 1997, p. 1, 4, written by Marcia Passos Duffy - ©1997 by Kennedy Information LLC - Keeping an executive recruiter tethered to one place isn't easy. Yet attracting and retaining good executive recruiters are key to a firm's success. So what's the secret to keeping this maverick lot in one place?
Money always speaks the loudest and almost never fails to entice a recruiter. But the incentive to stay put goes beyond the compensation check.
"Long-term view"
"Keeping recruiters is extraordinarily hard... because at the end of the day this is a relationship business," says Michael Flood, managing director for the New York office of Norman Broadbent. "Most firms compensate on production with no tie to the institution."
Flood knows firsthand the issues involving retention. He has been rebuilding NB's NY office, which was decimated almost two years ago by a fallout between founders Miles Broadbent and David Norman (ERN Nov.'95).
In re-creating the "new" Norman Broadbent, Flood subscribes to what many others in the industry now say - long-term incentives are critical to changing a recruiter's perception of a firm from a convenient place to hang one's hat to that of a permanent home.
"The best-managed firms compensate by a variety of benchmarks," Flood says. "Not just by volume, but by quality."
Brownie points
Ray & Berndston, for example, uses Long Term Units (LTSs) to reward recruiters when they serve the long-term goals of the firm. What garners LTUs? Developing an expertise and becoming a spokesperson for an industry... or developing mentoring programs between partners and consultants.
"This is a way of giving incentives to long-term behavior," says Ray & Berndston president/CEO Paul Ray, Jr. The accrual of LTUs represents a "meaningful part of compensation" for R&B recruiters, according to Ray.
Such incentives pale in comparison to the bigger stock option carrot being offered for team play, as articulated by LAI CEO Robert Pearson and others in the industry (ERN Sep.'97).
But are stock options a viable long-term incentive? Norman Broadbent's parents company, BNB Resources, is publicly traded in London. Like most search firm stocks, whose assets go down the elevator every night, Flood observes that BNB Resources stock has languished on the market.
Lamalie seems to be an exception to this rule right now. Maybe it's a sign of search's growing acceptance by the investment community... But people within the search industry are still not convinced of the power of stock options to keep executive recruiters from leaving.
Ways to Keep Recruiters Happy
1. Give them technology. The basics: voicemail, e-mail, Internet and database access. High-tech perks that might entice the under-35 crowd: cellular phone and a laptop computer.
2. Offer a 10-week sabbatical to recruiters who have been with the firm for 10 years (in addition to vacation time).
3. Offer flexible work hours, or a telecommuting option, to those recruiters with families.
4. Give recruiters room to move up. Don't stifle high-achievers with set-in-stone promotion schedules. And don't promote false partnership tracks.
5. Reward recruiters who meet the firm's long-term goal with real equity and a voice in helping shape the firm's future.
Control v. wealth
"Most [recruiters] don't care about stock options," says Janet-Jones-Parker, partner for Jones-Parker/Starr, which specializes in recruiting executive recruiters. "Some people want stock, not because of the value or wealth-building opportunities, but because it's an opportunity to be heard."
And although compensation for long-term goals is important, there are other elements that help keep recruiters happy - and loyal to a firm.
In Jones-Parker's business, she sees some common threads when recruiters leave for greener pastures.
"One key factor has been internal support, research and technology," Jones-Parker says. Those search firms that lag behind in technology, especially, are at a disadvantage in keeping up-and-coming recruiters from jumping ship. And there are plenty of low-tech search firms, she says.
"The percentage of search firms that use technology is phenomenally low," she says, estimating only 50 percent use computers with electronic mail and the Internet. "There are companies that still don't have voice mail."
Recruiters also want career-track opportunities and feel stilted when firms have set programs for progress, particularly if the recruiter is ahead of schedule. "Firms need flexibility," she says.
Firms often forget about offering incentives to the new recruiter. "Some firms don't promote from within," which causes a high turnover in lower level, says Barbara Provus, a partner for Chicago-based Shepherd, Bueschel & Provus, which specializes in senior-level management searches.
For some junior recruiters with families, the biggest incentive is often the opportunity to spend more time at home. "Firms need to recognize family issues, whether the person is male or female... some may be willing to give up earning potential to be with their families," notes Provus. She points out that some firms now offer telecommuting options and flex-time.
"Some people want stock... because it's an opportunity to be heard."
Believing the dream
Whether novice or seasoned professionals, the key to recruiting and retaining good people is a firm's vision and strategy, says Paul Ray, Jr.
"Most firms are reactive to a client's needs at the moment... the industry is driven by a transaction approach rather than a consultative approach," Ray says. He notes that R&B has a simple "60-70-80" goal: complete searches within 60 days, get 70% of the business it seeks out, and have 80% of the business of clients they already have. All this by year-end '98. "we're getting there," he says.
One thing Ray and others have noted that needs to change in the search business is the concept of teamwork.
"You need an 'esprit de corps,' a peer partnership," Flood says. "More should promote the firm as institution rather than a collection of entrepreneurs."
"Most firms don't give incentives in the right way for partners to work together," Ray says. This tends to promote rivalry, competition, and the recruiter's hallmark individualism that make it too easy for the recruiter to find somewhere else to hang his or her hat.
"One partner can only do so much for the client. After a while, it benefits the client to have other partners work with them and share expertise," Ray says.
And, after all, that's ultimately what recruiters want: to serve their client. And retaining recruiters hinges on that fact.
Jones-Parker succinctly summarizes the issues: "It's not just the money, but the platform and resources. Search consultants like what they do. They like adding value to corporate clients. And the firm that allows them to do that will retain its people."
Marcia Passos Duffy is a contributing writer to ERN.
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