The Right Recruiter Can Make All The Difference

Back to Contents of Issue: September 2004


DURING a robust economic expansion, such as the one we are enjoying in the summer of 2004, it is tempting for business managers to go all out and try to hire as many people as they can while the budget is still available. This is only natural -- because for most of us, the output of our team is directly related to how many hands we have to produce that output. More people equals more results -- right?
by Terrie Lloyd
AS AN ENTREPRENEUR, I've learned the hard way that things don't always work like that. While finding staff to get the job done is essential -- if you are willing to spend a bit more time and effort, you may find someone who can not only fill the position but also lift the entire company. This is a lesson that all successful managers learn early on.

Let me test your commitment to getting the best. How much effort are you taking, honestly, to get the best candidates? Are you conducting 4 interviews rather than 3, are you doing thorough background checks, and most importantly of all, have you done a recent review of your recruiting sources? If you're like most harried managers, the answer to these questions is "probably not". I don't blame you--you are already busy and you have an HR team whose job it is to make sure that you get the right person. In recruiting a senior or key manager in Japan, you are effectively choosing a family member for the next three to five years. Since you're both going to sweating blood and working through thick and thin together, my advice is to make sure that you personally drive the recruiting process and get THE right person first time.

There are probably about 4,000 recruiting firms in Japan, most of which are one or two person operations that have hung a shingle out the front. While you can get lucky and get excellent people from such companies, especially if you have ongoing needs, you had better find a recruiting firm that is going to give you consistent results. Such successful firms demonstrate certain characteristics which mark them as being special, and they deserve a place on your short-list of vendors.

Let's look at three companies in the local recruiting market who are known for their professionalism and yet also have a unique identity and vision providing the extra "spark" that attracts the best candidates.

Ingenium Group.....................................

Although I founded my own recruiting company, DaiJob, reviewed here later, there are a number of competitors that I just can't help respecting for their professionalism and ability to get results. One of these is Mark Saft's Ingenium Group. Mark and some other senior members of his team used to work for an old-line recruiting firm here in Tokyo, but decided that they wanted to change the business model and do things for themselves.

They were imbued with the "crazy" idea that a local (versus a multinational) recruiting firm could be run professionally, with each consultant focusing on a certain area of expertise rather than running around trying to handle everything that comes across their path. Given the cottage industry nature of the business, this commitment to staying focused was new to clients and they liked the results. In just four years, Ingenium has grown to over 30 consultants. The reason they've been able to do this is simple: each consultant is a specialist and knows their customer's industry intimately, so they know the points of leverage and the players. This is so-o-o important when trying to convince an attractive candidate to move to a new job.

Ingenium covers six different practice groups: finance, technology, consumer products/services, life sciences, professional services and manufacturing. They specialize in finding the hard-to-get senior executives and mid-career managers who have proven track records and know how to get the job done. No nonsense managers who know how to keep their staff happy and motivated are MUCH harder to find than those who simply talk tough.

Their services cover both retained searches and contingency. Pricing is something that most recruiters are reluctant to talk about, but Saft has no problem being up front and told us that they usually request a retainer of \1-2 million with the balance due on successful placement. Recruiting of other positions on a contingency basis is typically 30-35% of the first year's salary, depending on the difficulty of finding candidates and the amount of hand-holding the client requires to get the hire done.



We asked Saft what the demand in the market is right now. He responded, "The hiring market looks better now than at any time over the past 4 years. More companies are hiring and expanding their operations than at any time since 1999. However, the difference is that they are demanding more from their staff and executives. Being a 'good' candidate is no longer good enough -- instead people have to be great and have not only English and academic credentials but an excellent and provable track record as well. This in addition to the intangible qualities, such as leadership, teamwork, versatility, and creative thinking."

We also asked Saft about the search process in his company, which reveals the level of sophistication his team works at. He told us, "Process is everything. When we first take on a client, we examine the market closely and especially our client's competitive landscape. We make sure that we know who the leading companies and executives are in the space." Saft's team do this research in many ways, including utilizing the company's extensive database containing detailed records on several tens of thousands of companies and individuals here in Japan.

Saft continues about how to create a flow of quality candidates for customers: "Our database is an extremely valuable resource, but our consultants and their market knowledge and connections are what we value most. Ingenium's research staff spends much of its time finding the best candidates in the Japan market, our consultants spend their time in face-to-face meetings with these executives. At Ingenium, we don't wait for people to contact us when they are ready to look for a new job but rather we actively pursue and engage the best candidates in the market. Our Clients prefer Ingenium because they know we are in close contact with the leading candidates in their space."

Speed & Pride Corp..................................

Speed & Pride Corporation is headed up by CEO and founder Akio Sashima back in 2002 Sashima is what you could call an "artisan" in the recruiting space. He prides himself and his team on its ability to build and retain long-term relationships with candidates. His unique space is servicing small to mid-size Japanese firms, often considered too hard and cheap to deal with by the foreign-run recruiting firms -- which of course leaves the space wide open for someone like Sashima.

Dealing with smaller firms has its own special set of challenges. Often the company is run by a self-made entrepreneur who has always grown organically, and recruited by pulling in friends and family. Getting such individuals to realize that they need professional help as they grow can be a thankless task, and for this reason there are not a lot of vendors in the market segment. However, once a company starts to look at an export market, or licensing technology from or tying up with a foreign firm, then even the most entrenched entrepreneur realizes that if they want the cash, they have to move quickly and bring in resources that they are usually not equipped to find. Thus, Speed & Pride's sweet spot is servicing companies that are at a critical point in their development and need bilingual help or international experience.

To incubate a decent database of bilinguals willing to work in typically lower-paid positions, Sashima has created a whole community of candidates with overseas life/professional experience, called the Globe Walkers club. Members of the club can apply either for full-time positions, or work short-term contracts. The positioning of the club and the type of assignments have been a hit with Japanese returnees and business is booming.

We asked Sashima how he is able to make money off small to medium-sized Japanese and foreign firms, an area spurned by others. He told us that he is uncharacteristically blunt at the beginning of his relationship with clients -- as a means of conditioning them to get the job done and not keep candidates dangling Ð a fatal situation for any recruiter. He wants them to "get it" quickly in terms of commitment and willingness to consider candidates. For that reason, he has an internal rule for his consultants: try to work directly with a company's business managers and executives, rather than with the HR staff. In fact, many foreign recruiters I know have a similar policy, but the trick is to pull this off with a Japanese client!

Sashima is a past master in figuring out the maze of contacts and priorities, and coming out with some major assignments. We asked him what kind of major deals he is working on at the moment, and he told us about one typical deal where he is trying to place a COO with a Japanese semiconductor venture. The first interview was in February, and the deal will hopefully close shortly. But one potential problem is that although the client is ready to make the offer, they have taken so long to make up their minds that the candidate has received other offers! This highlights the fact that companies can afford to be choosey, but not slow.



Not all placements are this slow or painful. Sashima tells us of another placement with a foreign logistics company. They interviewed the 30-year old logistics specialist in June and had him starting in the new position just a month later. Perhaps even more surprising was that Speed & Pride had been able to entice the candidate away from a TSE-listed public company -- highlighting the quality of the company's network.

Given his background in helping SME companies, we asked Sashima what smaller foreign firms could do to get better results recruiting good quality talent. His response was, "Smaller companies need to create a very close connection with a small number of recruiting companies and treat those recruiters like one of the team. Some larger companies treat us like 'gyosha', just another subcontractor, but frankly in this market of few qualified candidates, being treated like this simply makes us less motivated. We would much rather work with companies that appreciate our service."

DaiJob Inc.............................................

A point of disclosure here. While I founded the DaiJob Inc. company, in the events of post-2002, my firm, LINC Media, is now a minority shareholder of DaiJob. At the helm of the company is the youthful but extremely well networked Jon Doherty, a native of New Zealand. DaiJob is, of course. well known to foreign firms as being the largest bilingual online recruiting service in Japan, a position it has held since shortly after the founding of the company in 2000.

Within the DaiJob company are two teams, the ubiquitous DaiJob.com job board and the Ambition Consulting recruiting team. The major sectors that DaiJob is active in are IT & Telecommunications, Marketing/Advertising/PR, Consulting, Consumer Products/services, and Finance. Also, because of the general nature of being the leading bilingual job board, DaiJob has candidates across the spectrum and helps companies with hard-to-find candidates in such diverse areas as hospitality, auto manufacturing, and venture finance.

We asked Doherty what type of candidates his customers are most interested in finding. His response was, "Mostly bilingual Japanese nationals with experience working or living abroad -- there seems to be the assumption that this time overseas equips a candidate well to work and communicate effectively in an international work environment, yet understand the local market well too." Asked about job types in greatest demand, he said, "Recently there has been an increase in demand for strong sales/business development types, project managers, etc -- i.e. top talent to effect immediate growth or corporate-wide change/restructuring. There is also a growing market also for 'hashi-watashi' types, who work as a bridge either internationally, or within the local office operations -- connecting foreign management and Japanese staff."

What about foreigners? Doherty reckons that while there are opportunities for fluent bilinguals, the overall market is not so great. "Companies are trying to match their workforces for the markets they're competing in, which naturally means that preference is given to natives who speak the language and understand the nuances of the market. The possible exceptions are foreign engineers, international trade, and senior managers of some forward-looking international firms." He doesn't think non-Japanese should be deterred from trying to find work in Japan. However, "You have to prove that you can perform at the same or higher level than a Japanese would." And to prove that there are indeed some opportunities, his company also provides an English-language web site called www.workinjapan.com.

The restructuring has been a recurring theme for DaiJob, as the type of candidates needed in this area typically have personalities which match the corporate personality of DaiJob itself -- one of entrepreneurial, 'can-do' spirit. Indeed, a quick look at DaiJob's latest 200+ company client list shows a number of jobs in billion-dollar companies which have been in the news recently for their restructuring efforts: banks, telco's, pharma companies, and others.

The fact that DaiJob, a relative newcomer to the recruiting market, has been able to penetrate the largest multinationals is due to several major factors. First, the massive size of its recruiting database. Being an online business, there is a continual flow of fresh resumes, and Doherty reckons that at any one time there are more than 30,000 resumes of candidates registered on the site for less than 6 months. Totally, DaiJob has had over 160,000 candidates register with the site.

The second major reason for the ability of DaiJob to get in to the highest levels of some major customers has been its policy of "ethical recruiting". Big corporations not only need people, they have reputations to protect, and care how their candidates are found and brought to them. As a virtual cottage industry in Japan, some recruiters are well known for their aggressive use of telephone sales and calling tricks to get to potential candidates. Doherty feels that such methods create a potentially negative relationship with otherwise desirable candidates. "While they may talk the first time around," he notes, "they probably won't come back for repeat encounters".

DaiJob's candidate flow, on the other hand, is almost entirely the result of search engines, networking and introductions from satisfied customers and candidates. "Kuchi-komi," or word of mouth, is a powerful tool in Japan, and Doherty has harnessed it to the advantage of the company. Over 2,000 fresh candidates come to the company every month, and thousands more use the job board to contact advertisers directly.

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