The concept of headhunting may be introduced by a simple cost-benefit analysis of the reasons why a company should employ a search consultant in the first place. It suggests that — depending on the salary level of the appointment — headhunting generally costs marginally more than do-it-yourself recruiting, but it saves time and cuts risk in the long run. Thus we may see that on purely economic grounds, for specific needs, search has established a niche in the consultancy market; in later chapters we tackle the wider question of whether or not headhunting actually adds value, and can make a positive contribution to a company’s performance.
Since the Second World War, executive search in the US has developed from a small cottage industry into a $ multimillion, multinational business which has deeply penetrated American corporate life. During that time, as in the case of many other trappings of modern America, it has crossed the Atlantic and subsequently emerged in Britain. But the reasons for the origins and growth of headhunting in the USA are significantly different from those which explain the establishment and continued development of the search industry in Britain. American search is examined here as an introduction to the arrival of this phenomenon in Britain; this analysis owes much to research published by John Byrne in The Headhunters.
The 1980s have seen a significant change in the fortunes of the major executive search firms in London. Although most of the major firms now at the top of the executive search market were present in London before 1980, their position, structure and influence was relatively small compared with their growth in importance in the 1980s. The London market may be seen to be increasingly dominated by eight firms, five of whom are true international firms — owning and controlling a wide network of offices worldwide — and three local firms. The international firms are Egon Zehnder, Russell Reynolds, Spencer Stuart, Korn/Ferry and Heidrick and Struggles; the UK firms are GKR, Whitehead Mann and Norman Broadbent. A number of smaller British firms are also making an important contribution, such as Tyzack, Merton, John Stork and specialists like City headhunters Baines Gwinner.
Do users of search — a significant sector of British industry — agree that most headhunting firms offer a professional and high-quality service, and thus see no need for the official regulation of the executive search industry? Official regulation of headhunting in Britain, in contrast with the USA, has not been developed and no widely accepted written body of rules exists. Neither is there any organisation to which all the major firms subscribe. Is this situation acceptable, or should it be changed?
To cut through the mystique surrounding the search process, we need a systematic examination of every stage of how an assignment is handled, to see how the headhunting process itself actually works.
BAA plc, formerly the British Airports Authority, owns and operates seven major UK airports, including Heathrow and Gatwick: these are two of the busiest airports in the world, both handling more aircraft than New York’s JFK. The seven airports of BAA together handle 75% of all passenger traffic and 85% of air cargo in the UK. With 7000 employees, BAA has achieved a turnover of some £400 million, and a consistent growth record in profitability. This search dates back to late 1986 when the need for an outside executive search for a new chief executive at BAA arose for two main reasons.
Roddy Gow of Russell Reynolds was asked to comment on the global aspects of headhunting and suggested that search firms are perhaps most significantly differentiated by the extent of their international network. The largest of these have extensive coverage, and most international firms have offices in at least the three major financial centres of London, New York and Tokyo. Since the majority of high-level recruiting projects call — by definition — for the headhunter to find the best candidate possible, such searches are more international than domestic, more global than regional. It is the effective use of this international or global network which should be seen as a source of strength and added value by potential clients, and is frequently cited as a reason for choosing one firm in comparison with another. To be effective, however, such a network requires the existence of broadly accepted standards and procedures within a firm combined with the placing of a very high premium on the provision of assistance by one office or individual to another when requested; arguably, it also needs a method of measuring such contributions. In simple terms, the recruiter in Singapore must be prepared to work closely with, and support, colleagues in Sydney or San Francisco if asked to do so, and this global capability both in research and execution must subsequently be offered as a complete service to the client.
There is no doubt that the executive search industry is constantly evolving and, as in the case of British and international business itself, will be significantly different by the twenty-first century. What are likely to be the comparative positions of the major executive search firms in the headhunting league table? Will there be changes in the corporate structure and manner of ownership of these firms? Will the nature of their work, in terms of level and function, be substantially altered? How and where will headhunting spread geographically? Will the large firms in Britain become even larger?
In the course of 3 years’ investigation of the executive search business, from all four angles — consultant and researcher, client and candidate — the overall impression gained has been that, generally speaking, headhunting is a good thing. But this is not to say that this is always the case, and if this study appears to be unduly sympathetic to the headhunting fraternity it is because the firms discussed here have proved that they can make a substantial contribution to the effectiveness and performance of their clients. Yet, for every one of these firms, there are perhaps ten or more that are not necessarily to be recommended so highly, or are not trustworthy, discreet and reliable at all.
