Search and employ

Headhunters are battling property’s old boys’ networks in an attempt to introduce fresh talent to an industry that desperately needs new ideas, reports Akiko Hart Headhunters are happy. The use of executive search within the property industry has grown from nowhere over the past 10 years, and despite the overall downturn in recruitment, this particular market is looking healthy. But are the days of little black books and “jobs for the boys” really over? According to some of the leading figures within real estate, executive search is an unlikely and sometimes uneasy alliance that has been formed in the search for talent. The property recruitment industry is relatively new; even in the early 1990s, headhunters found it difficult to persuade clients to part with fees in exchange for what was seen as a series of phone calls and a pile of CVs. But as the property industry has changed, so has headhunting, it seems. Bryan Thomas, a founding partner of Thomas Cole Kinder, an executive search firm specialising in real estate, sees the renaissance of property as an investment vehicle as central to the industry’s changing recruitment needs. The attractive risk profile of property has led to higher client expectations and a more market-orientated approach. “Greater efficiency has fuelled the need for more commercial, entrepreneurial and sophisticated candidates,” he argues. “Better buildings require better people.” Competition has also forced firms to specialise, highlighting the benefits of a more focused and scientific approach to recruiting than traditional advertising or old boys’ networks. Headhunters not only provide introductions, they also offer objectivity. By working with and around their clients’ prejudices, they are helping to cut out the inherent nepotism of the industry. Vivienne Packer, head of the real estate practice at Alexander Hughes, underlines the consultancy side of the business: “We dig into perceived requirements, help our clients identify their needs, and advise on achievability.” Client discussions The dialogue between consultant and client goes both ways. Graham Cunninghame, a partner at Thomas Cole Kinder, explains: “Sometimes just talking about their requirements will help the clients focus their minds on what they really want.” Headhunters emphasise the dearth of good project managers, financial expertise, and most pertinently, management skills: people who are actually able to run a business, rather than property people who happen to be running a business. Traditional technical-orientated training is no longer enough; most in demand are business skills and international, especially European, exposure. This is where search firms claim to come into their own. Adam Walker of property recruitment consultancy Cobalt talks about “the absolute necessity of good-quality in-house research”. Too often firms come up with lists of names that have little relationship to the skills and experience that the client seeks. This lack of good information is a very visible weakness in an industry where everyone knows everyone. A more scientific approach to research combined with lateral thinking is seen as the key ingredient to success. Search firms claim that by broadening the target market, branching out into different fields while emphasising transferable skills, they give, at the highest level, “a breathtaking access to senior level executives”. Is this true? Tainted by the “cowboy” image Most clients’ opinions of headhunters is lukewarm, owing to the “cowboy” image of less reputable firms and the experience of individual projects. Cindy Peters, director of human resources at Insignia Richard Ellis, talks about the “large number of people who purport to be headhunters undermining the professionalism and credibility of good head hunters”. Trust is central to the relationshipbetween headhunted and headhunter, client and consultant. This is especially true in the notoriously gossipy and incestuous world of property, where loose tongues – and CVs – have been known to cost certain unfortunates their jobs. Another criticism of headhunting in the real estate industry is that the sector is too small a market to warrant third parties identifying talent. Vivienne Packer laughs at this idea, pointing out that the number of service providers runs into thousands. “It’s not that the market is small, it’s that there aren’t many top-quality people,” she says. Headhunters argue that by providing an objective analysis, they can greatly diminish the infamous nepotism of the property world. As a whole, executive search has been become acceptable and demystified. Cobalt’s Walker says: “The service has removed itself from the preserve of senior-level appointments, and is now beginning to be seen as an effective recruitment tool across the board.” Human resourse consultants brought in from outside the property world have engendered a more open attitude towards search, and some consultants speak of decision-makers becoming more and more sophisticated. Need for regulation The consensus is clear: executive search in real estate is here to stay. Most experts agree that there is a growing need to regulate the industry, and indeed the AESC’s (Association of Executive Search Companies) guidelines are becoming standard across the UK. Many argue for sensible and practical self-regulation to safeguard the future of the industry. Because the relationship between client and consultant relies so heavily on trust, consultants or businesses who breach it tend to fail. And those who succeed? Consultants are upbeat about business in 2003, predicting activity in a number of areas, particularly fund management. The use of professional, impartial advice to fill leadership and specialist positions looks set to grow. Just don’t expect anyone to throw away their little black book just yet. How much does the service cost? The thorniest issue in headhunting is that of fees. Why pay a recruiter to phone a person you know? Ten years ago it was unheard of for anyone to earn a fee. One headhunter describes it as “a constant battle, which recently has become a smaller battle”. Nowadays, firms tend to charge 33% of the first year’s guaranteed remuneration, payable in three stages – the retainer, shortlist and appointment. Is that too steep? Perhaps so. Many search firms have been forced by market conditions to lower their fees, or offer greater flexibility in their structure.Some are now offering a “success-only comfort”, whereby only results are rewarded. But headhunters argue that a successful appointment is more than a short-term fix – it is vital to the growth of the business. A search is more expensive than advertising, but this, it is argued, is because it is driven by the client as opposed to the candidate. Graham Cunninghame at Thomas ColeKinder says: “The emphasis is on building relationships and the service we provide is over the long term.” Indeed, the service does not stop at recruitment. John Spurling, partner at global executive search firm Heidrick and Struggles, says: “A well-conducted search performs a wonderful ambassadorial and PR role for the company.” Choosing a headhunter Candidates are waking up to the benefits of executive search. It is said that when a headhunter phones, you know you’ve arrived. By becoming more self-aware in how they view and plan their career, most executives are finely tuned to the possibilities search firms offer them. Even sources have become more knowing, recommending suitable candidates rather than friends who are out of work. So which headhunter does one choose? Again, the emphasis is on two key areas: expertise and relationships. Few headhunters specialise in real estate, and as the sector is robust, many consultants from different backgrounds claim knowledge where there is none. A strong contact base and global reach are certainly requirements; credibility, professionalism and integrity are as well. As Thomas Cole Kinder’s Bryan Thomas points out: “You have to be interested and truly excited by the sector.”