Executive search firms are going online in an attempt to net the biggest fish in the employment market. But, as Anat Arkin reports, some deep-lying problems await those who use the World Wide Web to recruit top managers
People Management (article updated June 2002), 28 Oct 1999
In 1996 a new business launch promised to revolutionise the executive recruitment market. IntelliMatch claimed that its Jobs Across America service would speed up job hunting and slash recruitment costs by using Internet technology to match candidates to vacancies.
Jobseekers using the service were invited to fill out detailed assessment questionnaires on the company's web site. Employers with vacancies to fill could then run a database search that ranked candidates according to their suitability, paying $50 (£30) each time they downloaded a candidate's details.
It must have seemed like a good idea at the time, but early last year IntelliMatch filed for bankruptcy. According to some commentators, the Californian company was the victim of underfunding. Others said the problem was with its online questionnaire, which they thought was too long and complicated to appeal to jobseekers. Whatever the true reasons for its failure, the company clearly hadn't delivered what it had promised.
A matter of timing
If a week is a long time in politics, the three years since IntelliMatch was launched represent an aeon in the life of the internet. Web technology has advanced by leaps and bounds, and the number of people who feel comfortable about buying goods and services over the net has increased immeasurably.
As major players in the executive search market, Korn/Ferry and the handful of other firms that have developed online search and assessment services have had access to resources that a small business such as IntelliMatch could not hope to possess. So the company's failure does not necessarily mean that the idea of executive headhunting in cyberspace is doomed or even flawed. Whether it will actually take off is another matter.
A recent survey by recruitment industry analysts at Hunt-Scanlon Advisors has found that web sites sponsored by executive search firms are far less popular than Monster.com, CareerMosaic and the other established sites, which in essence operate as job advertising media.
The survey questionnaire listed 25 web sites, including three linked to search firms, none of which had been running for more than 18 months: Korn/Ferry's Futurestep (see "The next step"), Heidrick & Struggles' LeadersOnline and Christian & Timbers' PeopleScape. The participants were asked whether they recognised the listed sites and whether they had used any of them in the preceding year.
The replies from 550 organisations showed that usage and recognition of the three search firms' sites were very low. A quarter of respondents recognised the name Futurestep, but only 2 per cent said they had used the site, while 6 per cent recognised LeadersOnline, but only 1 per cent had used it. Not a single respondent had used PeopleScape, although 7 per cent said they recognised the name.
The value of online assessment
The findings from this small-scale US survey could simply indicate that the search firms running these sites have been less successful in their marketing efforts than the Monsters of this world, or reflect the fact that they are in a smaller market. They have certainly not had as long to make their presence felt. But the Hunt-Scanlon findings may also reflect concerns about the viability, especially where high-flyers are concerned, of online assessment - a feature common to all three systems.
"The perception we have from talking to search firms is that the people they are trying to find cannot be measured on the Internet in terms of their qualitative and leadership skills," says Brian Lee, vice-president at Hunt-Scanlon Advisors.
Others have doubts about the idea of asking candidates to complete long questionnaires before they have identified a post. "The sort of person who has an hour to spend filling in a questionnaire on the off-chance that an interesting job might come up is not the sort of person you are looking for to fill a senior position," says one industry insider.
Ken Brotherston, UK managing director of Futurestep, insists that, compared with a conventional search process, the 40 to 60 minutes needed to complete his company's questionnaire is not a long time. He points out that putting a CV together, sending it off and going out to meet headhunters can take six or seven hours spread over a number of weeks.
"We are finding that people in large international organisations who are used to the technology and understand the Internet think this is a good way of keeping their ears to the ground," he says. "And, for the first time ever, they are getting something back, because even if we can't find them a job, they get feedback from the psychometric assessment."
Signing up
Perhaps it is perfectly reasonable to expect someone to set aside an hour for this assessment process. Brotherston claims that around 400,000 people in the US have registered with Futurestep in the past 18 months. There are also 19,000 registered in the UK. But Heidrick & Struggles is seeking to differentiate its service by stressing that it takes only about 10 to 15 minutes to complete its LeadersOnline questionnaire.
"That's critical if you want to get senior people to use it, because they will not spend 45 minutes or more entering their details on to an Internet site," says Anthony Harling, partner in charge of the international technology practice at Heidrick & Struggles.
LeadersOnline has been available in the US for several months and is likely to be rolled out in Europe at the end of this year. But Futurestep is unlikely to face any other major rivals in the near future. The big beasts of the Internet recruitment industry have so far shown little sign of wanting to enter this market.
"We don't see this fitting in at the moment at the higher end of the market," says Mark Jones, head of digital strategy at Bernard Hodes, which has a search and selection arm as well as operating the CareerMosaic web site. "The feedback weÕve had is that the people we are looking for still appreciate the personal touch and the security of talking to a human."
CareerMosaic, he adds, appeals mainly to people who are interested in middle management roles rather than the top jobs. It is among firms seeking managers paid between £30,000 and £50,000 that Futurestep and LeadersOnline may ultimately find their clientele.
Cornering the market
One theory is that agencies are now pouring funds into web operations not because they want to upset the rarefied world of senior-level headhunting, but because they are trying to stake a claim in the lucrative middle market. Certainly, the £50,000-£100,000 earners both Korn/Ferry and Heidrick & Struggles are targeting through their web ventures are already a notch below the people they have traditionally recruited. Time will tell whether the candidates they end up accepting will include those who aspire to jobs paying less than £50,000 a year.
Andrew Banks, vice-president of TMP Worldwide, whose subsidiaries include Monster.com, believes that it is these middle-earners who are the true targets of the new cyberspace headhunters. With its existing strength in the middle market, Monster.com has no plans to start a direct competitor to Futurestep, although it is developing its web sites.
"Assessment should be done after you've gained a candidate's interest in a particular assignment," Banks says. "We will have assessment online, but only where a client has already shown an interest in a candidate, or vice versa."
Harling is frank about Heidrick & Struggles' motivation for launching LeadersOnline, which will be offered in a number of different forms, ranging from a "no touch" system, which matches candidates to jobs electronically, to a more upmarket option where consultants facilitate the assessment process.
The firm's core business of recruiting chief executives and top managers will not be affected by the new venture. What the new site will do, Harling says, is enable the company to support existing clients by recruiting for lower-level jobs.
"I don't think the internet is yet in a position to replace executive search. Nor do I think it ever will," he says. "What I think we'll see is that executive search will evolve and companies such as ours will have to become more sophisticated in terms of the type of offering and the services we provide."
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