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Monday, Sep 25, 2023


SARA FISHER Staff Reporter Korn/Ferry International wants to be the Amazon.com of the executive recruiting world. The Century City-based executive recruiting giant is pursuing that quest through Futurestep, an upstart subsidiary that will employ the broad reaches of the Internet. “Futurestep is the leader in the nascent stage of a growth industry,” said Matthew Litfin, an analyst at Chicago-based William Blair & Co. “It is creating a new layer in the executive recruiting field for which the demand is very high.” Futurestep is targeting mid-management executive recruiting a sometimes forgotten niche between high-level headhunters and traditional employment agencies. Since launching its service in June, the Sherman Oaks-based company has signed up more than 70,000 candidates and 3,000 clients, and opened three additional offices around the country. It plans to open international offices in the first quarter of next year. “All the major search firms have essentially abdicated the middle market, and meanwhile a growing number of companies are essentially outsourcing employment searches,” said Man Jit Singh, Futurestep’s chief executive. “We’re tapping that opportunity. The Internet is particularly effective in this area since you cannot network your way to a best-fit candidate when you’re talking about the thousands of candidates out there for mid-management positions.” Like many tech start-ups, Futurestep is planning an initial public offering, although Singh said he wants to show solid profits first. Futurestep will go public independently of its parent company, whose own planned IPO was yanked recently due to market uncertainty. Korn/Ferry owns 80 percent of its subsidiary. The remainder is owned by Futurestep’s management team and Pasadena-based Idealab!, which helped develop the company’s Internet infrastructure. Futurestep also has a marketing partnership with the Wall Street Journal in which the newspaper will provide cross-promotion through its classified and display advertising departments, as well as through the paper’s Web site. “We see it as a means to provide service and content to our readers that they can’t get anywhere else,” said Michael Wilson, director of classified advertising for the Journal. Analysts say the partnership could help Futurestep capture the market before its competitors get out of the starting gate. “The Wall Street Journal alliance is a great move, if not for any other reason than to create a barrier to entry for future firms interested in this market,” Litfin said. Even so, Korn/Ferry competitors are developing their own Internet strategies, including Chicago-based Heidrick & Struggles and New York-based Ward Howell International. “The whole concept of using the Internet for recruitment activity is absolutely the wave of the future,” said Scott Somers, managing partner of Century City-based executive search firm Paul Ray Berndtson. “It’s a bold step on Korn/Ferry’s part, since being a pioneer requires a significant and possibly risky investment, but other firms possibly including us will follow.” As part of Futurestep’s placement process, interested job hunters fill out an extensive online questionnaire, covering not only experience and skills, but preferred company culture and personal motivators. An applicant also takes a test that analyzes decision-making style. A Futurestep recruiter retrieves the profile when a match emerges with a potential employer, who fills out a similarly detailed questionnaire. The recruiter calls a candidate for further evaluation, schedules a video interview, and then compiles interview snippets from the best candidates to send to the employer. If a candidate is selected, the recruiter helps negotiate compensation. The process is free to the candidate. Employers pay a fee, typically equal to a third of the applicant’s annual salary. Thanks to the Internet’s speed and round-the-clock accessibility, placement can be accelerated to an average of 30 days, says Singh, compared with an average of three months for traditional executive recruitment.

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