From the hunter to the hunted
Recruiters provide insider info, find unlisted jobs
October 03, 2005
By Samantha Stainburn
Crain's Chicago Business
Small Business Adviser

Marci Lemanski sought out a headhunter earlier this year when she decided to close her advertising business and return to the corporate world.

Less than a month after she met with Media Staffing Network president Laurie Kahn to discuss her résumé and career goals, the Chicago recruitment firm submitted her name for a sales opening with Premier Retail Networks, a San Francisco-based company that broadcasts shows on televisions in supermarket checkout lines and other retail stores.

Working with a headhunter not only gave Ms. Lemanski, 50, a chance at an unadvertised opening, but inside information about what her prospective employer thought of her.

After her second interview, the "interviewer talked to my recruiter and right away she called me and said, 'Here's what he likes, but here's the problem,'" Ms. Lemanski says.

Despite some outside skepticism about her idea, Ms. Kahn reasoned that because she was single, had enough money saved and was only 38, she could take the risk, and if the venture failed, she could start over.
Before she and a partner started Rep Temps in 1993, "a lot of high-level men didn't understand how a temporary salesperson could come in and do the necessary job well," she says. "But a lot of these people were in the business before the advent of so many new media and before there was high unemployment."


 

Job Finder: Laurie Kahn, president of Media Staffing Network, Inc., has built a $2-million business matching people with positions, both permanently and part time, but she wants to do more. Photo: Steve Leonard

 
 
The partners leased an office on West Superior Street, filling jobs ranging from a day to 18 months and funding operations from their own pockets.
Within a few months, they had received requests to find people for permanent jobs. But a difference in operating styles caused the partners to part ways.
 

Ms. Kahn relocated to a shared office suite on North Michigan Avenue. Before the end of the year, she had realized annual revenues of $180,000, hired an administrative assistant and opened a New York office with a part-time salesperson.

As business grew, she moved again in 1995 to 150 E. Huron St., but still shared an office to contain costs. Three years later, in 1998, she relocated again to larger quarters in the same building and renamed her business Media Staffing Network, Inc. because it more accurately reflected the company's full line of services.

She now employs eight people in Chicago, three in Manhattan and one part-time in Phoenix, and she has a virtual office outside Detroit. Her revenues were $1.7 million in 1999 and $2 million last year, and she projects a big leap to $3.5 million this year. "A possible recession could mean a hiring freeze, which would make temps much more appealing," she says.

She knows she wants to hit $9 million in annual revenues within five years, possibly through an acquisition. She also might want to sell the business within 10 years. To reach these goals, she thinks she needs to find the right business balance between temporary and permanent placements, and the right clients.

Until two years ago, temporary jobs represented 70% of company assignments, and permanent jobs the rest. But temporary work has dropped to 40% because of low unemployment. Ms. Kahn wants to push that percentage higher.

"Temp placements are more valuable because they're more regular assignments. We might get a permanent job once or twice and never hear from that client again," she says. But she's not sure how to rejigger the percentages and the workload.

She would like each industry her clients represent to reflect no more than 30% of the company's total placements and for no more than 20% of each recruiter's business to stem from a single client. "We need greater diversity as media changes," she says. In addition, she wants more business from existing clients.

Ms. Kahn knows she needs to take these actions as well:

Deal with changes in the Internet's appeal. Although the Internet's allure may have diminished, many still view it as a possible route to fast riches and autonomy. Yet Ms. Kahn is concerned about business from some Internet companies. Some people she placed at Internet companies have been disappointed because the firms were disorganized and the work highly cyclical.

She thinks there are enough strong Internet companies to justify staying in this niche, however. She knows that to make good matches, she needs to talk to human resources personnel at the firms, learn more about the companies' structure and policies and walk around their offices. But she wonders what else she can do.

Attract candidates to new-media opportunities. It is still easy to attract candidates to well-known radio and TV stations and magazines, but it has become harder to find people for companies that sell ads on gasoline pumps or kiosks or in grocery stores.

"There are lots of these opportunities, but it's hard to convince people to take them," Ms. Kahn says. So far, she has tried to learn more about the jobs, keep the facts accessible and offer an attractive package.

She also would like candidates to consider switching to a type of media outside of their experience to expand their horizons.

Compete with bigger players for staff. The giant media companies have gobbled up radio stations and other competitors, leaving a handful of potential clients, Ms. Kahn says. While she initially thought this consolidation would make it harder for her to attract top recruits for some clients, it hasn't dried up the pool.

"Before, companies could raid competitors for staff. With fewer to raid, they're looking to me," she says. But she has had to make her company more visible by pursuing candidates whom others might ignore. Many competitors require candidates to have media experience, for example, but she prefers sales experience, since she thinks it's easier to teach media skills on the job.

Ms. Kahn has found most candidates through national advertising, her company's Web site (www.mediastaffingnetwork.com), attendance at industry and network functions and payment of referral bonuses to outsiders. She would like to try other routes such as direct mail and e-mail campaigns.

Figure out how to pay her staff. Growing from three employees to 12-plus in seven years has proved hard. Ms. Kahn has tried to recruit from colleges and offer attractive benefits, flexible work schedules and solid training.

Her media staff members are used to making a "lot of money," and she had to adjust her compensation budget to stay competitive. She hired a compensation consultant to develop a plan for motivating staff and justifying the salaries.

But another issue arose. If one office receives an assignment but another office fills it, "how do we motivate the manager of the office where the order came in to participate?" Ms. Kahn says. One solution is to tie both managers' bonuses to total company revenues rather than to what each office produces.

Train her staff better. She has created training programs for her staff and her clients' hires. But she also thinks it would be smart to bring in outside training experts. A problem, however, is the $20,000 cost, which she doesn't think her budget will allow.

Build a management team. Ms. Kahn has tapped her vice-president/director of finance and administration as next-in-command. She recently hired an experienced salesperson. Last month, she began offering a stock appreciation plan to her five top employees. Her estate plan would allow her managers to buy the company if she died.

"I think I have all my ducks in a row," she says, "but I'm not certain. I'm not sure what's missing, particularly when it comes to my own finances."
 
 
ADVICE FROM THE EXPERTS
 
Forecast cash needs for growth
By Ramond Silverstein
 
Laurie Kahn may have her ducks in a row, but she needs to prevent Media Staffing Network, Inc. from becoming a dead duck. The company is at the stage where it must enhance its resources. Ms. Kahn is projecting rapid growth and needs to do three things to accomplish her goals.
 
First, and perhaps the easiest, she should forecast cash requirements to finance growth. She also should establish credit lines and relationships to ensure cash is available when needed. Too many companies concentrate on sales and grow their way into bankruptcy.
Second, she should give her next in command the responsibility and authority to perform the job.
 
Ms. Kahn also should establish internal goals that enhance the skills of the staff and tie the achievement of those goals to compensation incentives.
 
Third, she needs to develop written internal procedures to help the company handle its business consistently and serve as a baseline for measuring potential changes.
 
Media Staffing should have a marketing plan that details and prioritizes the procedures for finding people to fill client positions. The company's Web site should reflect the organization's personality and motivate candidates to be associated with Media Staffing. Ms. Kahn should invest in driving candidates to the site. She could attract attention by placing banner ads with hyperlinks on other job posting sites.
 
Hiring people who have selling skills but not industry knowledge is valid. The company can further distinguish itself to candidates and clients by enhancing and promoting its training program. The $20,000 cost of bringing in a trainer may be worthwhile. Media Staffing should be known as a source of successful, trained staff.
 
I question whether the company can effectively run more than three offices in different geographical locations. This may be diluting its resources. Media Staffing should invest its assets in finding candidates and clients, and achieving market penetration and awareness in geographical areas that generate maximum gross margins.
 
Ramond Silverstein is president of Chicago-based consultancy PRO: President's Resource Organization.
 
 
Open more out-of-town offices
By Paul G. Gavejian
 
Ms. Kahn has experienced several changes in the past seven years, including a dissolved partnership, office moves and a name change. These events might have shaken some new entrepreneurs, but they seem to have encouraged her to take her idea to new heights.
 
The foundation of Media Staffing Network, Inc. is good relations with clients, and Ms. Kahn is doing the right things to develop closer relations with them. She has offices in most major media hubs. A good next step would be to establish a presence in Los Angeles, Atlanta and Dallas through a virtual office or use of temporary staff. Then she can expand the offices later, if they are viable.
If there is a recession, the company is well-positioned to offer the type of staff companies will need. In fact, more companies would look to the firm to fill their downsized employment rosters.
 
A shakeout in the Internet industry should not seriously affect Media Staffing. Internet companies are being merged or absorbed into larger, traditional companies that want to expand their Internet presence and disseminate information more widely. So personnel will simply shift from new media ventures to larger, established companies.
 
In addition to paying competitive base salaries, more companies are offering annual bonuses to employees, and doing so would allow Media Staffing to reward staff for measurable contributions to the firm's profitability. For administrative staff, a bonus of 5% to 7% of base salary would be a good investment. A bonus of 25% to 50% of base salary would motivate recruiters to work hard to reach specific performance goals.
 
Media Staffing also offers attractive benefits, flexible work schedules and training.
Recent surveys indicate that employees are interested in all these as part of a total pay package.
 
Another investment in employees is the stock appreciation plan that Media Staffing offers senior executives. Extending participation to all employees would be a great way to give the entire staff a sense of ownership. That and a competitive compensation plan will motivate staff to build on Ms. Kahn's model for success.
 
Paul G. Gavejian is a principal and compensation consultant at Buck Consultants Inc. in Secaucus, N.J.
©2001 by Crain Communications Inc.