BUSINESS HEAD HUNTING

SALLY KING glances nervously at her watch as she waits inside the door of August Moon restaurant in far North Dallas. A tall and angular woman in her mid-30s, she wears a burgundy suit and oxford-cloth blouse softened by a foulard bow at the neck. You would never guess by just looking at her that she has come to lunch to hunt heads.

She realizes with relief that her prospect – let’s call him Clint Schneider – has shown up after all, and she starts her pitch as soon as they are seated and have been handed their menus. Schneider (whose character is actually a composite of several engineers) is a software specialist who has been out of Texas A&M for four years. He was recruited on campus by the local military electronics company for which he now works. King got his name from someone he used to work with. His qualifications for a job that a small local company has asked her to fill were better than she could have hoped. Her first task now that they are actually meeting is to allay Schneider’s fears – he has been burned before in some of his dealings with hi-tech headhunters.

The high-technology industry has boomed in the Dallas area during the last five years, and the present economic downturn seems only to have temporarily stalled the growth. Electronics here are largely defense-related, but companies in commercial areas also have proliferated. The key technical people designing hi-tech equipment are hardware engineers (who design machines and circuitry) and software engineers (programmers who teach the computers what to do on the most basic levels). Good engineers of either sort are scarce. That’s where the hi-tech head-hunters, or recruiters, come in.

As one of the best headhunters in the area, Sally King – formerly with Computer Careers and now on her own with King Computer Search – has clients such as Xerox and Datapoint, which rely on her and a few others to find top-notch software and hardware engineers. These companies will pay anywhere from 15 to 35 percent of the first-year salary of anyone they hire through her. Some headhunters work on a retainer basis (they’re paid up front to look for candidates to fill a job), but that structure usually applies to jobs on high executive levels. Recruiting of hands-on technical people such as those that King ferrets out is done mostly on a contingency basis.

To distinguish herself from the scores of other high-tech recruiters – she says their local numbers are someplace “between multiple and legion” – King reassures Schneider that she will not send his résumé out without his approval, as some other headhunters have done with him. King takes her notebook out and asks Schneider for a full rundown of his job history. Her ability to comprehend his technical lingo (“I’ve done detail design and coding in microprocessor-assembly language, working with an Intel 8086 microprocessor”) seems to put him at ease. The input he has had in actual design work and the project responsibility he has been entrusted with alert her to his marketability. Schneider is indeed the sort of head that King will be able to sell to one of her clients.

Between soup and the main course, Schneider outlines the conditions that could make him change jobs: He would like to work for a smaller company, where he would have greater visibility. He would like to be part of a total design development effort, but it would have to be on the cutting edge of current technology – working on a 16-bit microprocessor. He is frustrated with the paper work required on a government project, the harried deadlines and the constant overtime, but he might consider working with another defense-related company if the opportunity were strong enough. He thinks that perhaps he is underpaid at $27,500 a year. If King could find him a job with a sizable salary increase, he would definitely be interested. She says that will be no problem (the jobs she handles typically pay from the upper $20,000s to about $40,000 a year; she thinks that Schneider’s experience will justify more than he is now making).

As King signs for the check, she notices a similar conversation going on at the next table. Occasionally, while she is interviewing an out-of-town prospect at one of the hotels along LBJ Freeway (near an area in which many of the hi-tech businesses are located), she will notice several other headhunters and candidates in the coffee shop, too. She has met busy engineers in places as odd as Midas Muffler shops and has been stood-up at a Grand Prairie McDonald’s. It’s all in a day’s work.

Recruitment is an easy business to get into because it doesn’t require much up-front capital, but it’s a business that is just as easy to be forced out of. King has just had a successful lunch, but she must have an unbroken string of such successes to make any money – she must land a client, persuade the client and candidate to meet, follow up with both, land an offer and get the offer accepted. And each step is fraught with uncertainty. A top recruiter in the hi-tech business might place two or three people each month; some periods will be slower. It is possible to make $40,000 a year – maybe even $100,000 – in the business, but it isn’t easy.

What makes a successful headhunter? Some people say it takes aggressiveness and dirty tricks. Managers who use recruiters tell a different story. Steve Van Dyke, who started the Dallas Development Center for Datapoint (which builds an advanced voice-and-data-integrated PBX system) and is now with Electrospace Systems Inc., has hired all his software engineers and many other technical people through headhunters.

“When I was sent here from San Antonio three and a half years ago,” Van Dyke says, “I opened my doors to all the recruiters and told them my ground rules. They had to screen thoroughly and present top-quality candidates. After six months, there were only four or five [recruiters] left. For software people, I have mostly gone through Sally King and V.J. [Zip] Zapotocky. From the resumes they send me, I can tell the applicant’s accomplishments. From the cover letters, I can find out their personal qualities – their communications skills and motivation – that no resume can convey. Of the candidates they send me, I have extended offers to about 90 percent. Others who sent me piles of resumes basically turned me off because they expected me to do their work for them.”

In a field with more than enough fly-by-night operations, a headhunter must be credible to stand out. The client businesses have to trust a recruiter, as do the people looking for jobs. And often a lot of confidential information is floating around – not just the candidates’ job histories and salaries, but also the plans and problems of the hiring companies – which means headhunters have to stay discreet if they intend to hold companies’ trust over the long haul. The industry is only rudimen-tarily regulated, and only a few hi-tech recruiters, such as King, have qualified for and bothered to obtain the industry’s internal certification through the National Association of Personnel Consultants. And the ethics of the business are rigorous: You don’t recruit the people you have placed for another company, and you don’t raid employees of clients you are working for. Many headhunters ignore the ethical guidelines, but they are less likely to be trusted the next time around.

Another key to success as a headhunter is knowledge of the business you are recruiting for. King started out in generalized professional recruiting and began to specialize in 1977; she keeps up with the technical side of the business by reading trade publications such as Computer World and Electronic News. Zip Zapo-tocky came from the other side of the street; he started out in the computer business in 1957 and worked with – even hired – many of the people who are now his clients.

Zapotocky runs his one-man Computer Professionals Unlimited operation from an executive suite. He stresses the third ingredient of success, personal rapport, in his business. “I was in management and found that I wasn’t identifying with my peers and bosses – the middle and top managers – but with the people who worked for me. The people in this business, the engineers, can sometimes seem a little weird, but I like them and can talk to them.” King agrees that the image of a programmer as someone who can converse only with a machine is misleading. “These are intelligent people. That’s what I like about them,” she says.

Zapotocky has proved that you don’t have to be overly aggressive to be successful in his business. He works regularly with only six to eight client companies. “Five years ago, I was working on an MBA at night at SMU, taking a course on starting a new business from John Welsh and Jerry White – I think they’ve done more for small businesses in Dallas than anybody. I had to put together a complete business plan – do the market research, price the office space, project the cash flow. The more I looked at the plan, the more I realized that’s what I should be doing. My income has been higher by far than it was as a manager, even the first year out. And it’s so much more relaxed that sometimes I feel like I’ve retired.”

For established recruiters like Zapo-tocky and King, finding companies to work for is less of a problem than finding the applicants to keep the companies happy. Companies know the benefits of a good headhunter – even those that claim not to use headhunters will turn to them for especially hard-to-fill jobs. They know that it’s cheaper to pay a headhunter $6,000 or $7,000 than to use managers’ time in a long search. Placing a newspaper ad often provides only minimal response. And companies that may be large enough to have personnel departments of their own may not have the network of connections that a good recruiter has. And although it is unseemly – perhaps unethical – for a company to raid another company’s staff, it is perfectly acceptable to hire a headhunter to do so. Consequently, the availability of a large pool of talent to be raided (Dallas is probably the third-largest hi-tech area in the country) has had a balloon effect. Engineers move here because they know that job-hopping is easy; companies move here specifically so that they can recruit from big companies such as Texas Instruments and Rockwell International.

The kind of candidate that companies are interested in generally has been out of college only two to seven years – (supposedly, after that point, an engineer will have specialized himself out of easy mobility or will have settled into management). Companies want a technical whiz as dedicated as possible to his job. And there is a bit of a prejudice against those who actually need work, although that has diminished somewhat during the recent recession. Still, many employers believe that the weakest people get laid-off first. Finally, companies want a good match – someone who will fit the corporate image and will get along well with the workers already there. Software and hardware engineers usually work in “tiger teams” of up to 20 people, so interpersonal skills are vital to many jobs.

Finding someone who fits both the technical and the personal requirements can be a tough task. Established headhunters have large files of people already partly qualified to serve as a base, but new recruiters have to find applicants as best they can. Even established recruiters have to do a lot of searching. It is in this area, above all, that some hi-tech headhunters have soiled their reputations – usually it’s a matter of excessive ingenuity and persistence.

The most infamous trick used by head-hunters is through ruse recruiting- in-venting a job that doesn’t exist to get a list of names. Another ruse is for a recruiter to call an engineer and pretend to have met him before. Zapotocky knows one woman in town who is successful at such strategies: “She finds programmers who are not very sophisticated and are at a low salary level. She convinces them that they are underpaid and overworked. If she gets them an offer, she comes down on them with both feet to get them to accept. If their old companies come up with a counteroffer, she talks them out of it – she doesn’t get a fee unless they move. These hard-sell tactics may work for a while, but not if you’re dealing with really savvy people.” But if a recruiter trying to claw himself into the business is desperate, he may try ruse recruiting and high pressure – he may try anything.

Even an established and ethical head-hunter will do a lot to get the names of qualified people in a “source” company (one you don’t work for and are thus free to raid). A subtle question may be dropped during an interview: “What did you say your boss’ name was?” or “Who does that kind of thing in your shop?”. But the good recruiters usually get candidates referred to them by those whom they have successfully placed before. After awhile, the engineers learn to discriminate in whom they choose to work with.

Marc Gardner, who was placed at his job at Forney Engineering through Sally King, had tried a couple of other head-hunters. “Either they didn’t understand what I wanted or they didn’t have the right contacts.” For Gardner, the job he was looking for had to be challenging and “fun.” It was also important to Gardner that Forney (which makes computer controls that regulate mechanized processes in petrochemical plants) was a good personal match for him. The average age of the people he works with at Forney is 27 or 28, and his manager is a woman who moonlights as a Jazzercise teacher. The profile of the company is upbeat under pressure, which also suited him.

The appeal of headhunters to engineers is great, too, because recruiters know where the jobs are and can seek them out while engineers are busy putting in their 60-hour weeks. But the impulse of many people in the business to seek out something better can lead to interesting problems for the recruiters: What happens if the client you are working for decides he wants to change jobs himself? It’s a tricky situation, with practical as well as ethical problems. It is by no means always to the advantage of the headhunter to ring up a hefty fee by landing a bright new job for a manager who has been hiring several engineers each year through him; each situation is a judgment call. But there is always that moment when a client will gently shut the door and start out, “Zip, I’ve been meaning to talk to you about something,” or “Sally, I want to show you my résumé.”