The hunt for CEOs
However, a lack of regulation means virtually anyone can set up a recruitment firm, so before you find the perfect business head you might have to find the perfect business headhunter.
In 2004, when the Polish oil concern PKN Orlen was in dire need of a new chief executive, the company knocked on the door of Korn/Ferry International (KFI), one of the most renowned personnel-consulting firms worldwide and one of the top-three headhunters in Poland.
The Netherlands-based KFI short-listed 12 candidates, among which was Igor Chalupec - at the time a Deputy Finance Minister who was not keen to leave his position. However, after some intense lobbying he finally agreed to join the negotiating table and his work at the helm of PKN Orlen has made him one of the most recognizable and respected faces in Polish business.
What does a CEO cost?
How much KFI earned for its work is anyone's guess. But, taking into consideration that the standard fee for an executive search amounts to 30 percent of the new employee's annual remuneration, and that Chalupec's annual salary with PKN was roughly estimated at zł.300,000, the consultancy firm could easily have charged above the zł.1 million mark. What's more, this is just for the searching process, and demanding clients can also ask for additional services, such as an assessment center, which involves the behavioral observation of candidates in laboratory conditions or special psychological tests.
"International concerns such as Heidricks & Struggles, Russel & Reynolds or Korn/Ferry are usually very expensive," says Zbigniew Brzeziński, CEO of ZB Executive Consulting. "They started off on the Polish market working for the same network customers they work for in the US or Western Europe. They often decided to launch operations in Poland specifically because their biggest customers entered the market. Only later did they begin to concentrate on local demand. For instance, KFI co-operates worldwide with Merloni Indesit, the domestic appliances manufacturer."
The bigger the better
Often, international concerns don't need to advertise. Everyone in the human resources (HR) business knows they set the trends. However, they are not the only sector players profiting from the headhunting process. Apart from international firms, and the experienced Polish personnel consultants such as Bigram or Profesja Consulting, small enterprises are springing up on the market. Accurate figures are hard to come by, as the business is not regulated and is by no means thoroughly researched.
"Fifteen to 10 years ago the market was dominated by big, network firms. Polish consultants gained some experience in the business and they started to set up their own companies. They thought they could be competitive by rendering the same services for less money. As a result, 80 percent of headhunting firms consist of one to two people but now the trend is reversing - the small-company model failed and more and more customers are turning to the reliable, international players," explains Barbara Korczyńska, business unit manager in Hays Specialist Recruitment.
Joop Nijboer, country manager in Pedersen & Partners, an executive search company operating in Central and Eastern Europe, says Poland is the most competitive HR personnel consulting market in the CEE region. "All the big executive-search multinationals already have their offices in Poland or at least are present here through their representatives. When it comes to the selected executives it's not one-way traffic anymore - quite often Polish managers are recruited for posts in Western European offices of multinationals," Pedersen says.
Asking the experts
One of the main advantages of cooperating with external personnel consultants is the 'unconditional guarantee' they offer - whether the newly found employee is laid off or resigns of his/her own accord, the employer won't have to worry about filling the vacancy or paying to find a replacement as the personnel consultant is obliged to find a new candidate. The length of such a guarantee depends on the post and ranges from three months to one year in the case of top managerial positions.
"Finding the right employee is hard work. Companies don't always know the labor market very well and a recruitment mistake may cost a lot of money. Much depends on the posts that are vacant - in the case of the low-level vacancies, it is easier to organize recruitment," says Katarzyna Korpolewska, CEO of Korpolewska Consulting.
External researchers come in especially useful when a company looking for new employees wants to keep the recruitment process confidential in order not to reveal its expansion plans or when it wants to 'steal' some talented people from the competition. However, the example of Bigram recruiting on behalf of the Greek EFG Eurobank ahead of it launching its operations in Poland shows that major headhunting projects within a sector rarely go unnoticed. When EFG started to search for management members in the established Polish financial institutions, the media quickly sniffed out the deal and all the attempts at secrecy went down the drain.
Cyclical market
"It's a very difficult business at the moment, especially in Poland because it goes in cycles," says Craig Bromfield, CEO of Quantum Search and Selection. "At the moment it's massively candidate driven. Candidates have great choice; they will have five or six offers to consider and it's turning into a lottery - it's whoever pays zł.2,000 more or gives a better company car. It's not about the career opportunities any more."
Craig Bromfield came to Poland five years ago and after working in the personnel consulting business in the UK for some time, he continued his headhunting career in his new homeland. Last year he set up his second company specializing in automotive industry executive recruitment and is now planning on widening the scope of his business.
Picky candidates
According to Bromfield the current situation on the Polish HR market resembles the situation in the UK two years ago, with a shortage of skilled workers likely to appear very soon. Both he and Katarzyna Korpolewska, CEO of Profesja Consulting, point to the fact that candidates have more and more offers to choose from and are less flexible when it comes to job offers.
"The big problem tends to be location. Basically, every week you pick up a newspaper and there's a manufacturing site opened. So whereas before the candidates were ready to relocate far away, now they're more picky - now it has to be 50 kilometers from home, it has to be a nine-to-five job, it cannot be a Japanese company because of their reputation, they don't want to work for French companies because of the culture. So candidates are now being a lot more demanding, which makes it much harder for us," says Bromfield.
Setting the standards
What the majority of personnel consultants complain about most often, though, is a lack of binding standards regulating the industry. Zbigniew Brzeziński, from ZB Executive Consulting, explains that the Association of Personnel Consultants founded in the 1990s is essentially a fictitious body, with good intentions but few achievements.
Craig Bromfield also points out another problem: "It's far too easy to set up - I came from the UK and set up two successful executive-search companies here and nobody checked whether I had any experience, it's just taken for granted. You've got zł.50, 000 working capital and suddenly you're an sp. z o.o. We need some more standards."
So how can you make sure you chose the right headhunting firm? "References are very important in this business," says Joop Nijboer. "Customers often ask about previous customers and concrete achievements. Trust and relationships are a must if you want to get anywhere in executive search."
