Recruiting for restructuring. (Sponsored Section).
JI: Last we heard of DaiJob.com, you were a leading jobs board. What happened to the business model that you're now building an offline practice?
Doherty: Actually, we always did have an offline practice, called Ambition Consulting, but we didn't really focus on a particular sector, so we kind of blended in with everyone else.
JI: But now you're zeroing in on head hunting -- with the restructuring boom that is going on?
Doherty: First of all, I'd like to set one point straight: We're not head hunters. Head hunting usually implies going into a company, often by nefarious means, and pulling employees from that company. We think this process is invasive and unfriendly. There are so many stories in the industry of pushy recruiters and researchers contacting employees who have no interest in moving.
JI: So if you don't head hunt, how can you get quality people?
Doherty: Well, you shouldn't discount the pulling power of our Web site. It is so well known on the Internet that we get around 2,000 new resumes a month, and of that number, about 10 percent is upperlevel and useable by the offline team. I might add, this volume is for resumes that candidates have indicated they are happy we look at. The web site engine handles more volume than this, but those resumes go directly to other advertisers on the site -- we don't see them. In addition to the Web site, we also have an excellent word-of-mouth referral network, which brings in almost the same volume again. So there are not many jobs that we can't find candidates for.
JI: OK, so you don't head hunt. You recruit by attraction then?
Doherty: Actually, we recruit by relationship. We have over 100,000 unique members signed up for DaiJob.com newsletters -- we send out 160,000 newsletters a week -- and some of these members have been with us for years. If they're looking for a change in job, they let us know first.
Anyway, to come back to your original question of specialization in restructuring, I'm not sure if you can say that restructuring is a specialty, but certainly, finding the types of people that can thrive in the difficulties of a restructuring is something we do well. I find that many of our international executive search competitors are scared to recommend a non-conformist or "different" candidate to customers. We, on the other hand, have a success record with placing people that have a certain unique strength of personality and who are able to get a difficult job done when a better candidate on paper would be dying from the stress.
JI: These are the Business Builders you were talking about?
Doherty: Right. Business Builders are people who have a mission and carry it out. They might be CEOs, CFOs, CIOs, HR Directors, or whatever is needed in the restructuring company. But they all have a defining trait of personal strength and integrity. They're evangelical and totally committed to seeing the job through. As you realize, restructuring is often about confrontation first, before moving to the motivation and inspiration stages. That confrontation point is a real Rubicon to pass over.
We have literally scores of jobs for these types of people. In the last couple of months in particular, the demand for CIO-level Business Builders has really started to peak. Companies no longer want someone who knows all about Cisco's and Oracle's implementations -- they're not in an expanding phase. Instead they want someone with a strong sense of business and ability to contribute to the overall bottom line. In fact, some companies are going even further and are looking for CIOs who can join an internal M&A deal team -- helping to spec out target companies' infrastructure and give informed input on what the target company will cost to modernize.
JI: What types of clients are you working with?
Doherty: If you look at any of the major buy-out funds here in Japan, we're working with about 30-40% of them right now. We're also working very closely with larger brand name companies that up to last year only dealt with the international executive search firms. These Fortune 500 firms are starting to like us for a number of reasons: first, because they need to strengthen their candidate mix - to get better selection; second, because they've changed the types of personalities they want -- having a good pedigree doesn't cut it any more; you've got to be able to get the job done; third, because many of these firms are putting their business -- managers into the recruiting seat rather than the HR department -- this is great for us as relative newcomers; and fourth, because we move fast. Our Web and referral systems are advanced and capable of reaping a large number of candidates. Head hunting is slow: recruiting by relationship is continuous and cumulative in nature. So it's as fast as our data mining ability.
As a case in point, we have been successful in the past 2 to 3 months in making many placements directly with the business managers and decision makers for large multinationals.
J1: The foreign multinationals have been through a very tough period over the last 12 months, haven't they?
Doherty: Yes, that's right. After September 11th, our business dropped off by almost 50%, as many of our traditional customers decided to slash all hiring plans and just hold tight. But they couldn't stay like that forever, and we found that by March of this year, most of our customer base was either reducing staff and restructuring, or they were buying out other companies and expanding -- either way, just like a stock broker, in the recruitment business, market movement equals opportunity.
Right now, the newspapers are full of the layoffs by foreign banks here. And it's true that probably 5,000 people out of a total of 25,000 workers have lost their jobs in the last 12 months. But most of those people are actually finding new positions. Not many people have noticed, but through acquisitions, some foreign financial companies here have grown from 500 or so people to over 5,000 in just a year.
J1: What parts of the marketplace look positive in the next year?
Doherty: If you mean in terms of a segment's ability to make money, probably consumer credit, retail -- especially brand-based retailing -- and a wide range of restructuring plays that are being executed by the buy-out funds. Each of the funds generally specializes in a particular area of business, such as commercial real estate, leisure facilities, hotels, auto retailing, logistics, etc.
If on the other hand you mean which companies are actually going to be hiring -- clearly they're the companies with money, either from their own profits, or from funds placed with them by investors. Money is king in Japan at present, and I'm seeing a lot of quality assets being sold at knockdown prices.
JI: Of course, it's not such a knockdown price if the employees of a merged company decide to rebel or repulse the foreign invaders.
Doherty: Yes, you're right, in many of these Japanese companies that have undergone a foreign buy-out, a real "them-and-us" mentality can form among the indigenous employees. That's why it's so important to bring a business builder in -- someone who can resist giving in to taking sides, and someone with an agenda to keep, come hell or high water. You also need a very strong and business-oriented HR Director--which we usually advise the fund to hire from outside -- because they not only have to plan for at least 30% of the best employees walking out within 12 months, but they also have to plan for the inevitable cutting of unproductive employees.
I always find it amazing that deal teams spend so much time on analyzing the numbers of a deal that they forget the human element and how much impact this can have on the viability of a firm. In fact, people costs are typically 70-80% of the operating costs of firms here, so clearly more due diligence should be done in this area.
Readers can reach Jon Doherty at firstname.lastname@example.org and view the Web site at www.daijob.com Click on the English link from the DaiJob.com home page if you prefer English.
Odakyu Minami-Aoyama Bldg. 7F
7-8-1 Minami-Aoyama, Minato-ku
ph: +81 33499 3110
fax: +81 33499 3180
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|Date:||Jan 1, 2003|
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