Standing Out in a Crowd
By Michele Molnar
Epic forces of nearly Biblical proportions have rocked the executive recruiting profession over the past year. The recession, layoffs, the Enron fallout, Wall Street doldrums, September 11, and fears of future terrorism have kept credit and collections companies in a maintain the status quo staffing mindset for managerial positions.
But there are signs that an upswing is imminent, recruiters say. As the stock market nudges up, credit and collections openings are appearing on recruiters' radar screens.
Adapting to new job market realities has made some executive search firms focus on how they can get the Internet to giveth where it has taken away. Yes, they concede they have lost business from some clients using job search websites to bypass the recruiters' services. But resilient recruiters have found ways to enlist the Web as an ally in fulfilling their missions, too.
From starting their own online job listings to using e-mail to broadcast job openings, from partnering with other organizations to trolling websites for leads to companies with executive openings, recruiters are showing increasing sophistication in their use of technology. 2001 was the year search firms on the cutting edge fully developed their websites, posted all jobs, and developed broadcast e-mail, says Jay B. Adams, president and owner of Adams Inc. in Omaha, Neb., which maintains a database of 70,000 candidates in the banking and financial arena.
Last year, e-mail became the dominant way Adams' firmand othersbegan communicating with clients and candidates. When we pick up a new assignment, I could send an e-mail at 5 o'clock on my way out the door and have three qualified candidates in my e-mailbox when I come in the next morning. If they respond that quickly, these candidates are people we've recruited before and we have at least some information about them. This method surpasses the previous approach of making 50 or 100 calls to get the five top candidates within a week, Adams says.
In addition, broadcast e-mail newsletters are gaining momentum as a marketing tool to keep recruiters' names top-of-mind, while making potential candidates aware of where the openings are. Our surges of activity spike for a week after our broadcast e-mail newsletter goes out, says Adams. This is a reminder for people to check our site for open jobs. It's a way to stay in touch with more passive candidates, who may send it on to somebody else they know who is actively looking. At least it generates a call to one of our recruiters, and that's what has enhanced our business.
In Adams' case, it has also generated some controversy. I lost a $250,000-a-year client over one e-mail that a senior level person got, that he didn't like, he explains. The client thought the e-mail was trying to solicit his employees.
Adams' firm has adapted by judiciously deleting e-mail addresses, as requested by employees or clients. We're learning some lessons along the way. It's not all great news for us, but the good news is that we are learning. I believe that the future of our business relies on technology to keep us in front of as many potential clients and candidates as possible, he says.
Brian Wolfson, managing partner for Management Recruiters of Woodbury, would agree. Credit & Collections World's Career Center, a niche jobs board he manages in collaboration with this magazine's website, can focus executive searches in the credit-risk management arena. Sections within our business are robust, Wolfson says. Job boards are a cost-effective way to find people, whether executives or non-executives, and an amount of work comes our way through the site. Credit & Collections World's Career Center (www.collectionsworldjobs.com) was launched in September 2001.
The Internet is creating an increasingly viable pathway for job placements. It isn't uncommon for large companies like Bank of America, that do collections, credit, mortgage, retail banking, and so on, to make 17% to 20% of their hires through the Internet. Four years ago, my guess is that would have been 2% or 3%, he says.
Still, the Internet clearly has its limitationsespecially for the segment of the industry that doesn't use it. That's when a savvy recruiter can capitalize on his or her use of the Web. For all the jobs headhunters lose because someone is found online, we find two more openings. We'll see those positions online and get two placements, says Robert E. Drew, director of credit recruiting at Taft Associates Inc. in New York.
Not all recruiters have made the adjustment. Recruiters say there has been an exodus from their profession over the past several months. Firms have downsized, or ceased doing business. The economy was already slow, then 9-11 made it slower everywhere, says Drew. This is the slowest time I can remember in a little more than 20 years working with the credit industry. I've been through a handful of downturns, a few official recessions. But I see us climbing out of this trough soon.
Wolfson shares that sentiment. For as many years as I can remember, through 2000, the marketfrom a recruiter's perspectivewas outstanding. The supply and demand favored candidates, he says. Our company looked at 20%+ compounded growth for six years in a row. Last year, we went backwards by 25%.... Beginning in 2002, it's gotten worse. However, it's changing.
Where the Jobs Are
Thanks to the downturn in the economy, collections managers are in greater demand than credit executives. For one thing, employers are working harder to keep the good performers they have in executive accounts receivable positions. In credit risk, you have to look a lot harder when the economy turns south. I know companies in the Midwest who can't find middle level managers in the credit risk area, observes Scott Lyons, managing director of Lyons Pruitt International in Allentown, Pa. They can find directors and more senior level people, but in the $72,000 to $90,000 range, companies have the hardest time identifying good management talent.
Adams says his firm has more than 100 searches posted on its website, primarily in lending or credit jobs. We concentrate on recruiting executives in the $40,000 to $250,000 range, but our bread and butter is the $60,000 to $150,000 range, he says.
The go-go '90s have been replaced by a swing to more conservative lending. Adams calls it a black-to-white change in credit policy that he has observed over the past four to six months. I just got off the phone with a credit manager for a super regional bank in the Midwest. He said last year was a struggle, the year before was fantastic for most lenders, and this year loan growth has been almost non-existent. They've made getting a loan approved much more difficult, to the frustration of the relationship managers out there. We're seeing a lot of frustrated sales lenders, he says. Now the super regional banks want people with a strong conservative credit culture.
Examining the demographics of executives, Kevin J. O'Neill, vice president of The Call Center Group, a division of J.B. Brown & Associates in Cleveland, predicts another big change in the next five years. He foresees a vacuum of middle- to upper-level executives. Those who made a lot through the growth of the '90s will be looking to move on. They may be ready for early retirement or deciding to pursue other endeavors within the next five to 10 years, he says. He predicts there will be a great need for experienced executives across many industriesincluding collections and credit risk management.
Lyons believes the demand for qualified professionals is already ratcheting up. In areas like credit risk and collections, where skills and judgment are relied upon, and where people are needed who know systems well and who can motivate a team of professionals, it's tight. Those kinds of people don't grow on trees.
Ultimately, O'Neill says, companies looking to fill vacancies will reach out sooner to a third party for assistance as they take into account the time and cost of a critical position remaining open.