Category: Archive

Posted on

Insurance Broker Deepens Offerings With Employee Benefits Firms

Insurer Reaps Benefits: Richmond, Virginia-based insurance broker Hilb Rogal & Hobbs said it has acquired Nevin, Works & Associates, an employee benefits company in Portland, Oregon. Also included in the deal is Nevin Works subsidiary Thinc USA, described as a niche employee benefits firm. Hilb Rogal is acquiring all the outstanding and issued capital stock of Nevin Works for an undisclosed sum, and reportedly will retain Nevin Works’ employees in Portland.


Posted on

Dear Workforce How Do We Measure Potential When Making Promotions

Dear Eager to Know:

The good news is that you have a lot of available options. You are correct that full-blown assessment centers are a useful but expensive way to evaluate performance. They are almost always reserved for managerial positions because of the time and expense they require.

 

There are two related options to consider in your situation. The first is to employ some form of simple assessment measure to help you systematically evaluate your candidates for internal promotion. It is hard to determine exactly which type of assessment may be best for your situation without understanding more about the jobs you are trying to fill. However, tons of really good assessments are on the market to help hiring managers clearly understand an individual’s capabilities. It is important to note that I am not recommending these assessments be used as the sole criteria for making hiring decisions. Rather, they should be viewed as a useful supplement to other information, including supervisory ratings and recommendations.

 

Your second option actually is a bigger picture strategy that leverages both the tactics you already use along with additional assessment tools. This involves using your performance management program as a strategic element of your internal hiring initiative. Again, it is hard to make specific recommendations without knowing more details, but in general data collected as part of a formal performance evaluation yields lots of valuable information to aid internal promotion decisions.

 

Assessments can play a key role in this strategy, since many organizations use assessment tools as part of the process for evaluating performance and for performance planning, coaching, etc. In fact, many organizations are using data collected from pre-employment assessments as a baseline from which performance planning and evaluation can begin. Again, it is important to point out that these assessments should never be the only source of information used to evaluate a candidate. In your situation, supervisors should be actively managing the performance of employees and should be aware of assessment results as part of this process.

 

I believe your current strategy–leveraging the experience and knowledge of supervisors–should continue to be a key part of your future strategy. The most important thing is to create a process whereby these individuals are able to consistently obtain quality information to help them understand their employees better and thus make better promotional decisions.

 

One final note: Promotional decisions tend to attract much more litigation than initial employment decisions do. For this reason it is important that you create a structured process for internal promotions that will allow you to document the key criteria used when making promotional decisions. The strategy outlined should help.

 

SOURCE: Charles A. Handler, PhD., president/founder, Rocket-Hire, New Orleans, March 22, 2006.

 

LEARN MORE: Please read how to use job descriptions to make “make more sensible job evaluations.” Also, how to move away from paternalism toward a performance culture.

 

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

 

Ask a Question
 Dear Workforce Newsletter
Posted on

Dear Workforce How Do We Improve Retention of Remote Workers

Dear Keeping Them Happy:



Retaining good workers is always a challenge in today’s competitive environment, but keeping workers who are geographically dispersed adds even more complexity. You should consider this three-step approach:

1. Make direct supervisors responsible for achieving retention goals. Smart organizations are shifting retention responsibility to leaders. Numerous pieces of research tell us that employees join for reasons of pay, benefits, duties or schedules. But how long they stay with a company most often is directly tied to relationships with their immediate supervisors. These organizations set retention goals with supervisors, track retention at the supervisor level, and then provide rewards and/or consequences to supervisors based on goal achievement. For example, tying 30 percent of a performance bonus to retention tends to motivate supervisors to work harder at keeping key people.

2. Provide supervisors with retention training and coaching so they can achieve their retention goals. What is the No. 1 quality that employees want in their leaders–the quality that will cause them to remain with your organization longer? The answer: They want a supervisor they trust.Building and maintaining trust with remote workers can be especially difficult because of the absence of daily personal contact. As a result, organizations must be especially keen to hire and promote “trust-builders” to supervisory positions. Then they must provide training to help them meet commitments, tell the truth, share credit but not blame, apologize and admit mistakes, and conduct other trust-building behaviors.

3. Ensure leaders on all levels have retention discussions with remote employees. Traditional supervisory updates are about production and other job tasks. Organizations can improve retention with remote employees by teaching leaders to initiate specific retention discussions, such as:

  • Tell me about a past leader whom you trusted. What did that leader do to earn your trust?
  • Tell me also about a past leader who broke trust so I don’t repeat that same behavior.
  • What can I do to make this a better place for you to work?
  • Can I count on you to tell me if something troubles you so much that you would consider leaving, so I can try to fix it?
  • Can I also count on you to ask any of your peers to come to me with their concerns, rather having you and I both lose the contributions of that person?

Make your leaders/supervisors accountable for retention and equip them with the skills or training they’ll need. It is the best strategy for retaining a geographically dispersed workforce.

SOURCE: Dick Finnegan,TalentKeepers, Maitland, Florida, March 29, 2006.

LEARN MORE: Please read a related Workforce Management article titled Personalizing Motivation.

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

Posted on

Extended Deployments Could Hurt Work Prospects of Citizen Soldiers


The Pentagon’s decision to extend active-duty requirements for citizen soldiers in the National Guard or reserves could take a toll on both civilian employers and employees.


The new policy could require citizen soldiers to be on active duty in Iraq or Afghanistan for as long as 48 months—an initial tour could last up to 24 months, followed by a return to civilian life and then a second mobilization round that could be additional stretch of 24 months. By contrast, the old policy limited active-duty requirements in Iraq or Afghanistan to 24 consecutive months.


“Employers are not going to be happy with this new policy,” says Ted Daywalt, president of VetJobs, an online job board for individuals who have served in the military. “They are already up in arms about the pressure that the old, less severe system is placing on their business.”


Some 1.3 million citizen soldiers who work in a wide spectrum of industries could be affected by the lift in traditional caps.


The expansion of active duty may hit small employers hardest. According to Daywalt, 70 percent to 80 percent of individuals in the National Guard or reserves work for companies with 300 to 500 employees. Some firms are even smaller. He cites a Houston-based machine shop which lost 12 of its 21 workers virtually overnight when they were called on active duty in Afghanistan in 2002.


“The owner of the shop had difficulties complying with his contracts because more than half of his workforce was missing,” Daywalt says. “I can assure you that this has not been an isolated case.”


The threat of diminished productivity is not the only source of worry for employers. Under the Uniformed Services Employment and Reemployment Rights Act, companies are required to continue providing certain benefits for family members of the individuals who are on duty as well as ensure employment of citizen soldiers when they return from their missions.


Employers didn’t mind incurring these and other financial responsibilities when the tours of duty were less frequent and shorter in duration, Daywalt explains. But the escalation in requirements has been changing this landscape.


Daywalt warns that the new policy will aggravate the situation and make it unpalatable for companies to hire an individual who is enlisted with the National Guard or reserves.


“Why would anybody want to hire an individual who may called away for two years only to return for a just a few months and then be mobilized for another two years?” Daywalt says. “Companies are not going to be happy about this.”


—Gina Ruiz



 

Posted on

Report Finds CEO Succession Is Directors’ Top Concern

Corporate directors, having largely addressed the new requirements of Sarbanes-Oxley, are worried about a new hurdle: CEO succession.

Roughly half of the corporate boards from public, private and nonprofit companies say they are “less than effective” at CEO succession, and only a similar percentage have a succession plan in place, according to a survey by the National Association of Corporate Directors and Mercer Delta Consulting. Less than 15% of the 1,400 directors surveyed said their boards were “highly effective” in managing and developing their executive talent.


The report recommended that CEO transitions should take place over a minimum of a three-to-five-year period so that directors can be assured the new leader has been adequately trained and developed for the job. Elise Walton, partner and head of Mercer Delta’s corporate governance practice, added that a board should have a succession plan from Day One to avoid a crisis if the CEO suite is suddenly vacant.


Meanwhile, the directors surveyed said they needed to improve in overseeing their companies’ business strategies. While most directors (48%) said their boards were “effective” in this area, 28% said they were “somewhat effective” and 8% said they were “below acceptable levels.”


“Directors are feeling frustrated with not really knowing the right way to get involved with strategic planning,” Walton says. “There’s been a move to share more information, but not much specification as to how to share it; they don’t feel as though they’ve figured out the exact right way to handle the issue yet.”


Directors on public boards spent an average of 210 hours on board issues—both inside and outside the boardroom—during 2006, up from an average of 190 hours in 2005.


Jeff Nash


Jeff Nash is a reporter for Financial Week, a sister publication of Workforce Management.

Posted on

Nardellli’s Tear-Down Job

Home Depot used to be about the people.


    I was sadly reminded of this during the hullabaloo over the abrupt departure of Home Depot CEO Bob Nardelli earlier this month. The focus of most news coverage was on Nardelli’s excessive compensation, his even more excessive $210 million departure package, and his pugnacious, imperial style.


    All of that may be true, but all of that also misses the point. Nardelli may have been overpaid, but from my perspective, his failure was rooted in his decision to take a hammer to the people-oriented culture that was the essence of the Home Depot experience.


    In the old, B.N. days (before Nardelli), Home Depot stores were filled with experts in orange aprons roaming the aisles and ready to help with whatever you might need. In fact, they generally found you before you even realized you needed them. It was the personal touch rarely found anywhere else.


    All that changed after Nardelli became CEO in late 2000. He decided that all those experts really weren’t needed, so he got rid of many of them, reduced the hours of others, and hired more part-timers in order to cut costs. Seemingly overnight, Home Depot went from a place with great customer service to one where it became difficult to find anybody who could help you.


    Slashing staff is a time-honored tradition of new executives. For many, it’s the first thing they do when they come on board, mainly because it’s easy and gives the sense that someone is taking charge and making things happen. It also makes the new executive appear decisive and confident.


    But, as basketball coaching legend John Wooden once said, don’t confuse activity with accomplishment. And mindlessly slashing staff without considering the big-picture perspective is frequently just that—lots of action that is more show than strategy and, ultimately, may hurt the operation more than it helps.


    In my experience, slashing staff and running roughshod over people is the province of weak managers who have few real skills they can fall back on. They often dismiss the need to be more subtle or strategic in dealing with people, and are dismissive of people who are, because managing people is difficult and hard to quantify.


    No one can accuse Bob Nardelli of being an inexperienced executive when he joined Home Depot, but many now question whether he was the right guy for the job, considering his background under Jack Welch at General Electric—a very different business environment where frontline staff just weren’t as important.


    “GE people are good at getting structure, system and strategy right, but they don’t always understand soft issues like culture,” Boris Groysberg, an assistant professor at the Harvard Business School, told The New York Times. That’s the “GE Way” that has been made famous by Welch. Many have tried to follow the Welch formula, particularly the “rank and yank” system of eliminating the bottom 10 percent of the workforce each year.


    The problem I have always had with the Welch formula is, well, that it’s a formula. Managing people is much more complicated than that and can’t easily be reduced to a formulaic approach if you want to be successful and do it right.


    That’s where Nardelli got into trouble. Yes, he was paid too much and frequently acted like an arrogant jerk (Remember the last annual meeting he presided over, where he told the board to stay away, then wouldn’t answer any questions about anything?), but his legacy will be what he did to the service culture for which Home Depot was so famous. He brought the GE playbook with him when he took over as CEO, but he failed to recognize that he was leading an entirely different team.


    One size does not fit all. A formula for success in one environment may be a recipe for disaster in another. The lesson we can all learn from Bob Nardelli is that people still do matter, especially in a people-oriented business culture.


    Too bad it’s a lesson that many companies, in their search for a quick fix or shortcut to success, have chosen to ignore.


Workforce Management, January 15, 2007, p. 34 — Subscribe Now!


Posted on

2007 Optimas Awards Winners

F or 17 years, the Optimas Awards have recognized workforce management initiatives that directly improve business results. While many of the qualities involved in creating excellent and profitable organizations don’t vary, each year’s winners do reflect the changing business environment.


    In the early ’90s, human resources shed its administrative straitjacket. In the dot-com era, innovation reigned, and companies showered employees with unprecedented perks. In the crash that followed, the winning organizations showed a resolve and a determination to do more with less.


    Now, as the global economy changes dramatically, a different theme is emerging. In nearly every category this year, the winning organizations’ entries centered on talent. How to find it—sometimes in dizzying numbers. How to bring people into an organization quickly. How to maximize their abilities. How to steep them in a company’s culture. How to retain the best people in the face of ever-increasing competition.


    It’s our pleasure to honor the achievements of the 2007 Optimas Award winners, and to share them with you.


GENERAL EXCELLENCE
Goldman Sachs & Co., New York
COMPETITIVE ADVANTAGE
Edwards Lifesciences, Irvine, California

ETHICAL PRACTICE
Putnam Investments,Boston


FINANCIAL IMPACT
GM Service Technical College, Troy, Michigan
GLOBAL OUTLOOK
Infosys Technologies, Bangalore

INNOVATION
Best Buy, Minnesota
CultureRx, Minneapolis


MANAGING CHANGE
Luxottica Retail,Mason, Ohio
PARTNERSHIP
CVS Pharmacy, Woonsocket, Rhode Island
SERVICE
U.S. Office of Personnel Management, Washington
VISION
Sun Healthcare Group, Irvine, California

 

Posted on

Supreme Court to Discuss IBM Cash-Balance Plan Review

The U.S. Supreme Court is scheduled to discuss Friday, January 12, whether it will review a federal appeals court ruling that IBM Corp.’s cash-balance pension plan does not discriminate against older employees.


The August 2006 decision by the 7th U.S. Circuit Court of Appeals overturned a lower court ruling that said the plan discriminated against older employees because, when expressed as a retirement annuity, the benefits earned by younger employees are more valuable than the same benefits earned by older employees.


But the appeals court—in the first time a court of that level ruled on the issue—rejected that analysis, saying the disparity in benefit values was the result of the time value of money, which, it said, is not age discrimination.


It is not known whether the Supreme Court will agree to review the appeals court ruling. Certain factors, such as a split between appeals courts or the involvement of the federal government, that increase the likelihood of high court review are not present in the IBM cash-balance plan litigation.


But if the Supreme Court does take up the case, its ruling could put the age discrimination issue to rest. If the court agreed to review the ruling and found that the plans are not age discriminatory, it would in one fell swoop end age discrimination litigation and provide the legal certainty employers have long sought.


On the other hand, if the court took up the case and found that the cash-balance plan design violates age discrimination law, employers with the plans would face more lawsuits and likely would move to freeze their plans to reduce their exposure to damage awards.


Some 1,200 to 1,500 cash-balance plans covering millions of employees and retirees are currently in operation.


As part of a comprehensive pension funding reform measure passed last year, Congress included provisions to protect new cash-balance plans—those created after June 29, 2005—from age discrimination suits. Only one large employer, MeadWestvaco Corp., a Richmond, Virginia-based office products and paper manufacturer, is known to have set up a new cash-balance plan since the legislation was passed.


It isn’t known how soon the Supreme Court will decide after the Friday discussion—part of the justices’ regular weekly conference—whether to review the lower court ruling.


—Jerry Geisel


Jerry Geisel is a reporter for Business Insurance,
a sister publication of Workforce Management.

Posted on

Finding and Keeping the Best 3 Ways to Ensure That Employees Stay

Imagine retaining more than 95 percent of your employees for the long term. Impossible? Not at all. And for any company, achieving this kind of sustained working team can be priceless, both in terms of human capital and financial returns.


    In terms of pure capital, studies show that employee turnover can cost companies up to 40 percent of their annual profit. A negative impact on the bottom line is damaging, but a churning employee population seriously degrades the corporate culture, creating even more dissatisfaction and turnover.


    There’s no magic formula for curing churn. What it does take is strong core values, open communication, a sense of community that’s continually nurtured, and constant vigilance. We’ve made it work at our company, Allyis Inc.


    Based in Bellevue, Washington, Allyis recently marked its 10th anniversary. With our team of 154 employees, all but three of whom are full time, we manage technology projects and personnel needs for enterprise clients and governmental agencies, primarily on the West Coast. Since its founding by three former graduate students in English, all of whom had been contract workers at Microsoft, Allyis works to thoroughly understand its clients’ business needs and provide flexible staffing options to place highly skilled personnel on virtually any technical, Web-based project.


    The long-term payoff for our dedication to “employee care” has been dramatic. At Allyis, we have retained on average more than 95 percent of our employees for three years. We demonstrate care for our employees through a very specific commitment. We provide much higher than average benefits, and dedicated staff provides regular employee care in the form of work and life event recognition, encouragement and support of ongoing education, plus regular, consistent communication about job satisfaction, management of client expectations and team dynamics.


Core values
   Core values are often talked about, but not often well defined. Our values are relatively simple: Base everything in your company culture on demonstrating that you value long-term relationships with both employees and clients. We believe this is done by focusing on the quality of day-to-day relationships that ultimately evolve into long-term relationships.


    A thoughtful and strategic plan should be built on a clearly articulated mission statement. Mission statements shouldn’t be about profits, or include empty buzzwords about quality or striving. They should clearly express what’s most important to the company’s health. Talk must be backed up with action, so it’s important to continuously assess whether you’re living up to your mission, vision and goals. At Allyis, we hold one another accountable with a broad-based employee stock ownership program, twice-a-year town hall meetings, anonymous feedback mechanisms and 360-degree reviews ensuring that everyone’s voice is heard.


    A key element in our mission statement is commitment to employees, and we show this by championing internal development. This is not always easy. During a period of exponential growth, existing employees lacked necessary management skill levels. We faced a dynamic challenge: Do we let current management muddle through and hope for success, or do we bring in outside management and then work toward helping our employees acquire the management skills needed to fulfill these positions?


    To ensure that Allyis employees learn critical managerial skills and achieve necessary personal growth—and that clear promotion paths are established—we are formalizing the Allyis University program. The program identifies core skills ranging from written skills to “service leadership” skills. The Allyis model of service leadership encourages our employees to serve first, both each other and clients, and then lead, as a way of expanding their sphere of service. This reinforces the belief that every position in the company is a position of leadership.


    Allyis has subsequently been able to promote mostly from within instead of hiring managers from outside, engendering a sense of self-sufficiency and meritocracy. Our culture is transparent, based on trust and includes taking accountability for mistakes, no matter the employment level. “Stuff” happens, but it is important to examine the impact versus the intent, make necessary changes and communicate openly so that we can collectively learn what to do differently next time.


Communication and listening
   We encourage a collaborative atmosphere of trust, empowerment and listening, involving our employees in the planning and feedback process. In a world of short-term contracts, over half of our employees work on open-ended, ongoing contracts due to the quality of their work and their demonstrated listening and communication skills. Company culture and standards are improved on an ongoing basis, based on feedback from employees and clients.


    The evolution of our employee assessment process, for example, demonstrates how we take everyone’s views into consideration. We have evolved from doing straight numerical rankings to a 360-degree review. Taking assessment and development to a new level, Allyis employees work with a personal mentor, similar to a college advisor, to help guide their career growth in key areas of development. The program’s success is measured by improving employee review scores, and the one-on-one attention of the mentoring process lets us get qualitative feedback from employees to get a baseline read on how our programs are doing. Evaluating employees is significantly easier, since the evaluating mentor is already close to the employee and has knowledge of his or her strengths and weaknesses.


    Allyis also solicits information by regularly administering surveys. Surveys are powerful and an excellent way to gather information from a large group of people, but too many questions or surveys throughout the year can overwhelm employees. Allyis plans and executes an annual survey to gauge employee satisfaction and learn about what can be improved.


    Two months before Allyis starts benefits planning, a companywide employee survey is administered to ascertain employee needs and gain an understanding of how health care and other benefit programs are valued. We want to ensure that the benefits we offer are ones that our employees want, need and will use. Early on, our employees were fairly young, and orthodontia was not included as part of our benefits plan. It is now, since many of our employees’ children are at the age where this service would be valuable.


    Follow-up surveys gauge satisfaction levels after benefits are implemented and confirm that we’ve assessed correctly. Surveys also provide ongoing assessment of employee attitudes about training and development, company events and employee newsletters. By including the participation of all departments, we ensure sure that we’re genuinely listening to feedback and effectively reacting to it.


Connection and community
    Open feedback and listening, central to Allyis’ core values, helps us to connect with one another. We are keenly aware that while we are doing business in a local community, we are also part of our state, country and global community. We communicate this to our employees and the community at large by responding, for example, to tsunamis in Thailand and hurricanes in the southern United States and reaching out locally to hungry children in Seattle. Giving back to the community is part of our mission helping to build and maintain a strong sense of community at Allyis.


    Tangible expressions of support among our employees foster a close-knit sense of family. A two-way street of dignity and respect between employees and employer has developed into a powerful relationship. We have many heart-rending stories of support and participation, proving the significant connection to our fellow team members.


    Here are just a few examples:


  • Several years ago, an employee’s young child was diagnosed with a serious chronic disease during the holiday season, requiring a lengthy hospital stay. We assembled a huge play basket to help the child get through the stay and researched various fundraising opportunities, like walk-a-thons, that we could participate in. Allyis offered a scholarship to a camp that helps children with the same disease learn how to manage it, to further demonstrate our resolve to help.


  • Another employee was serving as a caretaker not only for his critically ill parents, but had also taken on the role of guardian for his teenage sister. His double duty was taking a toll on his health and well-being. During a particularly draining week, we arranged to have a week’s worth of meals delivered for the entire family to help ease the load.


  • I’ve personally experienced this kind of Allyis care. Sidelined at home for a week with an inner-ear infection, my co-workers sent me soups that only needed to be heated. It showed me the power and importance of caring. This atmosphere of caring for our employees encourages sincere and consistent loyalty, and naturally spills over into the long-term relationships with our clients.


Caring caveats
   Being aware of what is happening with your employees sends a strong message of caring. Creating an employee care program requires some extra attention to detail, and here are some important reminders:


  • Privacy: Identify a mechanism, such as a paper or online form, that will provide specific instructions about the information employees would like to keep confidential. This step is vital to protect and respect employees’ privacy.


  • Calendar management: Conscientious management of key employee events, such as birthdays, births or adoptions of children, anniversaries, the purchase of a new home or a promotion is critical to the success of the program. Consistency is important, since missing even one event for one employee can damage the message that the program is meant to convey.


  • Consistent but custom: While consistency and uniformity are important in terms of the value of gifts and which events the company chooses to acknowledge, it is important to be sensitive to employee wishes and lifestyle. An important key to the program’s success is collection of the proper data. This can be done as a part of the new employee orientation. It is important to identify a specific individual or team who will collect information about internal and external life events for employees.


Ready, set, stay
   Allyis has developed a proactive, dynamic and committed strategy for building long-term relationships with our employees and clients. From core values, communication and listening to genuinely connecting on company and community levels, Allyis focuses on the heart, while guiding the business with a steady hand. Employees and clients stay with us. That has enabled us to be among the Northwest’s fastest-growing privately held companies for three consecutive years, to garner service-excellence recognition from our clients, and to be named as a “best place to work” by our employees on numerous occasions.

Posted on

Korn-Ferry Acquires Major Executive Coaching Firm

Korn/Ferry International is acquiring LeaderSource, one of the nation’s largest executive coaching and leadership development consultancies.
 
The move, which comes on the heels Korn/Ferry’s August purchase of Lominger Ltd., a provider of leadership development tools, allows the company to extend its reach beyond its traditional executive search capabilities.


“We are in the process of creating a diversified HR firm,” says Gary Burnison, president of Korn/Ferry’s Leadership Development Solutions. The company launched its strategic efforts five years ago to meet growing demand from clients.


Terms of the LeaderSource deal, which was announced Wednesday, January 10, were not disclosed. Korn/Ferry paid $24 million in cash last year to acquire 100 percent of Lominger.


“Workforce leaders are recognizing that solely managing the end points of employment just isn’t good enough,” Burnison says.


Until recently, Korn/Ferry’s transformation took place exclusively by developing in-house capabilities in various fields, including executive leadership development and coaching. The acquisitions of LeaderSource and Lominger, however, were made to gain ground quickly.


“Developing the competencies that LeaderSource and Lominger have would take many years,” Burnison said. “We can catapult ahead by making careful acquisitions.”


Other search firms have rolled out similar diversification strategies. Manpower bought Right Management in 2004 to capitalize on the company’s expertise in coaching, succession planning and outplacement.


Search firms are realizing that finding a job candidate is just the beginning of a long and complex process, says Kevin Cashman, who founded LeaderSource in 1977. Teaming up with experts in the fields of executive coaching, leadership development and succession planning enables search firms to improve the chances of success for a job candidate that they pitch to a client.


“It is in the interest of a search firm to have candidates not only be hired by a company but also to have them stay employed because it speaks volumes about the quality of employees they are recommending,” says Allison Cheston, chief marketing officer for the Association of Executive Search Consultants in New York.


One of the first tasks for the newly formed entity, whose full name is now LeaderSource, a Korn/Ferry Company, is to create a fresh onboarding initiative. The program will integrate Korn/Ferry’s search expertise with LeaderSource’s coaching and leadership development capabilities.


“We will not only find the right job candidate but we will help them thrive in their new environment,” Cashman explains. The onboarding program will give newly hired employees a 12-month assimilation process that includes coaching and development.


The acquisition boosts Korn/Ferry’s network of executive coaches to about 200. LeaderSource has 50 executive coaches, 15 of whom are full-time employees, and posted revenue of $3.5 million in 2006. Some of its clients include General Mills and pharmaceutical giant Novartis. This deal makes it one of the largest players in the highly fragmented coaching industry, Cashman says.


Cheston anticipates that search firms will continue to diversify their lines of business.


“Clients are increasingly looking for a one-stop shop,” she says. “And in today’s bullish market, companies are more likely to take on challenges that will make them more competitive.”


The stakes are high in the field. A recent survey from the Association of Executive Search Consultants forecasts a positive outlook. Some 80 percent of the 186 retained executive search consultants that participated in the study indicate that competition for executive talent is at an all-time high, and 85 percent of respondents expect that the search industry will grow in 2007. Almost 70 percent of the survey respondents plan to increase their staff.


Besides the synergistic gains and the enhancements to client services capabilities, another element that makes business diversification attractive to search firms is the potential for growth. The coaching industry brings in about $2.4 billion and is expanding at a rate of 18 percent per year, according to Cashman. Getting in on the game could produce a new source of revenue for search firms. About 20 percent of Korn/Ferry’s $600 million in revenue for 2006 stemmed from business other than its traditional recruitment services.



Throughout LeaderSource’s 30-year history, Cashman says he has declined dozens of acquisition offers. He decided to join forces with Korn/Ferry, however, because of its core competencies and strong brand. In addition, joining forces with the search firm will allow the company to expand outside of North America and Europe, where it already has a strong presence. Korn/Ferry has 70 offices in 40 countries.


LeaderSource will continue to be based in Minneapolis and retain its workforce. Cashman’s title will be president of LeaderSource.


—Gina Ruiz