Finance directors keep their heads above water: Headhunting is a resilient business and growing in popularity for senior positions, reports Ian Welch

THE recruitment market for accountants remains extremely bleak. Agencies openly admit that, compared to the late 1980s, their databanks of jobs are pitifully thin.

Yet the highest sector of the market, that of finance directors, is largely bucking the trend. And at this level, an estimated 70 per cent or more of the vacancies are unadvertised.

This murky world is the domain of the executive search firms, the cloak and dagger operators better known as headhunters. And while many have strong feelings about staff being 'tapped', recent research reveals the resilience of the headhunting market.

Figures for unadvertised vacancies from the outplacement consultants InterExec over the past three years show senior accountants in industry bearing up well. Covering 1,000 employers and search firms, the research shows a stable level of demand to mid-1992. Even a decline in the third quarter leaves finance vacancies ahead of other disciplines.

Search firms do little to unravel the aura of mystery that surrounds them. It helps to flatter and intrigue their targets, as well as, cynics would say, allowing them to justify hefty fees - normally 33 per cent of first-year salary, a sizeable chunk being paid up front.

But the essence of search is that it should involve a firm calling an employed person and asking if he would be interested in discussing a job further - the targeted 'candidate' had not been looking for another job and had not approached the headhunter.

The raison d'etre is that the best people for any position would not be actively looking for another job and would therefore be unlikely to respond to an advertisement. So a direct approach to woo them is necessary.

Around pounds 50,000 upwards is the generally agreed benchmark where search is used, although some headhunters say the figure is higher for finance director vacancies as the requirements tend to be less industry-specific than for other senior personnel.

The higher a finance director's profile, the more likely he is to be targeted by headhunters. Being in a top 500 company guarantees a place on search firms' research databases, but appearing in the press and speaking at trade seminars can do the same for smaller company directors.

Calls from headhunters can be either directly to their intended targets, or they can be 'sourcing' calls to people likely to have contacts in the relevant field. Occasionally calls can be a combination of both, particularly if the search firm knows little about the target, and is calling on the basis of only one or two referrals.

Search firms react angrily to suggestions from other recruiters that in a recession their research may extend merely to candidates on their databases who they know are available. While accepting that their databanks are growing, they insist few placements come from this easy source.

Jo Cutmore, managing director of the headhunters Jamieson Scott, said: 'Many employers still assume there must be something wrong with people made redundant. It is a myth that search firms just look on their database for candidates.'

A more fundamental complaint against search concerns the way candidates are first targeted and then shortlisted.

This is that headhunters stick rigidly to the ideal candidate specification the client has given them. Having been engaged to find the very best person for the job, they feel obliged to satisfy every criterion, rather than thinking laterally and putting forward candidates who have the potential, even if not the exact track record to date.

Andy Harrison, finance director of Courtaulds Textiles, said: 'Search is not an innovative method of recruitment. It gives excessive weight to the 'necessary' experience which the present incumbent happens to possess, and looks for a clone. It does not give good people a chance to broaden their experience.'

The search firms naturally dispute this claim, pointing out first that they agree the specification with the client, and so erase any unrealistic expectations. And second that there must be an element of potential progression for the candidate in the job, or he would not accept it.

But Jamieson Scott's Ms Cutmore admitted that the number of quality applicants currently available meant it was very difficult for a search firm to justify submitting 'unorthodox' candidates.

'I can understand people's frustrations, but with the market as it is, we must be brutal and stick to the specification,' she said.

For the three or four candidates that eventually form the shortlist on a job, the search firm can be of great benefit in giving the lowdown on the directors they will meet in the course of interviews. And they deny charges of trying to 'sell' jobs to candidates, insisting a 'warts and all' view of client companies is given.

Donald Macleod, director of Korn Ferry, the world's largest search firm, said: 'Our first responsibility is to our clients, but we've got to be convinced it is a good move for the candidate, and that they will be happy bedfellows. Our reputation and repeat business depends on both sides being satisfied.'

To those who question the ethics of trying to tempt employed people out of their jobs, headhunters are unanimous in their defiance.

Mr Macleod explains: 'It is entirely ethical because you are only offering to discuss a situation further if it is of interest - you are not offering a job on the spot. And many people who are supposedly content are actually in a rut or just keeping their heads down.'

But do search firms actually get the right people? Research estimates that one third of all searches ends in failure, and some still question the relevance of using a third party.

Brian Fidler, finance director of the business services group Christian Salvesen, believes top companies will know those candidates who could realistically fill the boots of a departing executive, and would be better approaching them directly, or through City brokers.

'True targeting of the real two to three candidates is better than trawling through a laundry list of 50 companies,' he said.

'Finance directors are increasingly number two in the company. Recruiting them needs a focused approach, and although the top search firms are competent and professional, it is not a route I'd choose.'

Headhunters naturally argue that theirs is the most focused approach, and warn that companies making their own searches risk lapsing into the 'old boy network'.

As the figures show, companies are increasingly accepting the advice of headhunters. And one high-profile finance director's view may prove to be an accurate barometer of senior recruitment in the 1990s.

'I moved into my current job through a search firm and it is true for most people at this level. How else do they move around? They do not reply to adverts and it is much better than the old boy network,' he said.

(Photographs omitted)