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CFO Magazine
"Networking and the Net" August 1999
Despite progress as a tool for hiring middle managers, Internet recruiting techniques usually yield to tradition at senior levels.
By George Donnelly
Don Depascal was looking for a better job. As controller for a Silicon Valley start-up Conductus Inc., a strong number two in a 20-person finance department, with more than 20 years experience, he represented a hot commodity for the many companies pursuing experienced high-tech finance talent. He also seemed a likely candidate for an Internet job search.
But did he turn to the Web? Contrary to Bay Area Internet culture, he found a new job the old-fashioned way: by person-to-person networking.
At the moment, the Internet is the big news in executive recruiting. And indeed, Web searches have revolutionized the recruitment process in many ways. Yet as DePascal's experience indicates, at the higher levels, the Web is no match for traditional recruiting techniques. In DePascal's case, the Santa Clara chapter of the Financial Executives Institute put him in touch with CFO Sam Hedgpeth of Autoweb.com Inc., who needed a new controller. In short order, DePascal got the job, and helped the company go public earlier this year.
Where The Web Works
As an economical means of posting job openings, cyberspace has no competition. The cost is minimal and the audience is global. Electronic job listings have erased geographical constraints and opened new vistas for employers and job seekers alike. Ask Mike Baron of PriceWaterhouseCoopers LLP (PWC) in Atlanta, where these days you might hear a surprising refrain: I found my job through Monster.com. Online Web sites now lure one in every five new hires, says Baron, one of the audit firm's two Southeast region tax recruiters. Thanks to this connection, PWC recently found candidates from California and Seattle to fill openings in North Carolina and Florida.
Sunday want-ads in newspapers are no match. Online job sites enable job seekers to identify job openings by category, location, or even by company name, while facilitating instant replies. "A lot more people search the Internet during weekdays," says Baron. "It's so much more accessible than having to wait for Sunday to wade through the paper."
No surprise, then, that Web-based job listings are mushrooming. Besides postings on company Web pages, scores of entrepreneurs try to match employers with job seekers. Retained search firms that handle high-level positions are also stepping into the electronic arena, albeit gingerly.
Many finance placement firms populate the Web for reasons other than locating individual job candidates. Some, for example, are finding the Internet an effective means of tapping into select pools of finance talent by networking electronically. The Financial Executives Networking Group (FENG), which started as a small group of Connecticut-area finance executives, now has 1,900 members that receive bulletins with job leads through outbound E-mail.
Explains Matt Bud, the head of the group: People get on the E-mail list by being introduced by another member. Most are senior-level executives, and Bud likes to refer to the group, despite its size, as "a circle of friends."
Love Letters
A recent FENG E-mail featured about 20 job leads, including slots for one CEO, four CFOs, and eight controllers. Many of the leads stem from cooperation with search firms. "The members of the retained search community have been kind enough to take a leap of faith that we're not going to plaster this all over the Internet," says Bud, a business manager at Thomson Corp., in Stamford, Connecticut. He receives no pay for his efforts on FENG's behalf.
FENG membership confers several competitive advantages in the job sweepstakes. Volunteers search job sites to compile leads. Fewer than one in four jobs are filled through listings, however. To supplement these lists, Bud also publishes a membership directory that allows members to create their own inner circle in similar fields.
Rubbing Real Elbows
Nevertheless, when it comes to landing plum jobs in financial management, the Web still takes a backseat to rubbing elbows and working the telephones. Job seekers must network relentlessly. Employers, caught in a tight job market, use the whole bag of tricks, from visiting colleges to paying bounties to workers who find new workers. "Recruiting is about relationship-building and networking," says Baron. The Internet, by his lights, just adds one more means of networking.
And sometimes, it promotes more networking than anyone wants. Executive recruiter Dwight Foster of D.E. Foster Partners, in New York, an alliance firm with KPMG recalls that, when news of a highly sensitive search for a new human-resources executive slipped loose in cyberspace, everyone knew about it overnight.
"I'm now getting all kinds of responses from every unemployed HR guy in 16 states," he says. Beyond the Internet, he muses, "the other alternative is skywriting.'' Foster's view, the Internet "is not going to penetrate the group of people you really want to talk to.''
"For the most part, the people we recruit for our clients are not in the job market," says Chuck Sweet of Chicago-based search firm A.T. Kearney. Like most of its rivals these days, Kearney relies on the Web as an important research tool and maintains a Web site of its own that draws customers. But, at least for Kearney, the Web does not replace executive recruiters retained by corporations to identify job candidates. These professionals say the Internet is transforming the midlevel recruitment business, but has not significantly affected the dynamics of their own sphere--so far.
Here's how it works at the Santa Clara branch of the FEI, where DePascal met Hedgpeth. More than 30 leads a month reach the Santa Clara FEI career services group. About half come from recruiters. The committee then tries to quietly and confidentially match leads with FEI members who have approached it seeking a job change. The committee does not "headhunt" members from their current assignments, stresses Ed Linskey, who chairs the group and is president of the Santa Clara chapter. Instead, it works confidentially with both recruiters and potential candidates. Since 1994, the chapter has helped place more than 100 chief financial officers, treasurers, and controllers in jobs on the West Coast through the FEI career services committee.
"We can almost always furnish [prospective employers and recruiters] with CFO names, even if they require IPO and dot-com [experience]," says CFO Christine Russell, of San Mateo, California-based Persistence Software, and a member of the committee. "But it's very hard to find controllers and finance directors." The classic number-two person is less visible, and companies aren't willing to put together the kinds of packages that lure away CFOs.
Rather than spend money for outside providers to find potential hires, some employers pay their workers for leads. The Finova Group Inc., a financial-services firm based in Phoenix, pays employees a referral bonus of between $1,000 and $5,000.
Love The Ones You're With
Ultimately, at least in the current job market, the best recruitment policy may be an effective retention policy.
Despite the abundance of search options, electronic, internal, and otherwise, "It's still the needle in the haystack in terms of finding the right person for the right job,'' notes John Gillespie, whose consulting firm Beyond the Bottom Line, provides part-time financial consulting to companies. "I think smart companies have their radar up about what their good people are doing. I think they're trying to hold on to the people they have''--rather than pay a 30-33 percent-of-salary fee to an executive recruiter and suffer months of low productivity from the new hire. Staples Inc., the office-supply company based in Framingham, Massachusetts, has reduced its dependence on recruiters by moving people into a variety of roles within the organization, says CFO John Mahoney. "Successful companies really need to create an environment in which people perceive a lot of opportunities," he says. In search of fresh talent, Staples staff have hit the college circuit by visiting about 30 schools in the past year alone.
Few companies weigh the investment in keeping good employees against the hefty cost of replacing them and training new workers, says Keith Swenson, a principal at William M. Mercer Inc. in Chicago. The kind of rigorous financial analysis that most companies perform on things like capital investments generally hasn't filtered down to human capital, Swenson says. "They don't believe it has an impact on the bottom line."
Turnover reduction efforts yield hard savings. Deloitte & Touche, concerned about the high turnover rate among its female employees and the lack of women in senior-management positions, turned to New York� based consultants Catalyst in the early 1990s to create a comprehensive program to advance and retain female employees. In annual surveys conducted by Deloitte & Touche, 89 percent of the employees who use the flexible work arrangement would have left if the program hadn't been implemented. And in a five-year stretch, Deloitte & Touche increased the number of female senior managers from 253 to 650, saving an estimated $11 million in turnover costs in the same period.
"We were already offering flexible work arrangements when the recession was happening," says Todd Rossel, national director of human resources at Deloitte & Touche's Management Solutions group. "But we continue to use them now--for all our employees--because anyone can go across the street whenever they want to."
George Donnelly is an associate editor at CFO.
The Job Surf
Among dozens of sites regularly monitored by the Financial Executives Networking Group:
www.monster.com
www.careermosaic.com
www.headhunter.net
www.cfonet.com
www.yahoo.com
www.careerpath.com
www.financialjobs.com
www.washingtonpost.com/parachute
www.career.com
www.6figurejobs.com
www.careerbuilder.com
www.searchbulletin.com
Source: Worldtalk Corp
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