Executive Search Firm Founders Move to Adapt to Slowing Economy
Opening an executive search firm in the teeth of an economic slowdown is tough timing, but Chris Bull and Rod McDermott say their business is faring well in its first year.
“We’re pretty happy with how we’re doing right now, although the search industry as a whole has taken some hits,” Bull said. “We feel we’re fairly well-positioned in the marketplace and we have enough of a reputation that we feed off of.”
Bull and McDermott are founders and managing directors of Irvine-based McDermott & Bull Inc., which has eight employees, up from three at the start in March. The partners say they plan to hire another 15 in the next year. The company is forecasting $3 million in revenue for its first full year and $5 million for its second year.
The company handles clients that include Santa Monica Seafood, Chicago-based U.S. Robotics Corp., Irvine-based WirelessCar, San Diego-based Trojan Battery Co., St. Paul, Minn.-based global communications and document services provider Merrill Corp. and Connexion by Boeing,maker of a high-speed Internet access service on North American commercial airlines.
The two founders started the company with $100,000 in personal funds after leaving the Irvine office of Chicago-based DHR International Inc. and taking a few clients with them, including San Diego-based Gateway Inc.
But the two said that with the slowdown, companies are taking longer to plan and finalize executive recruiting.
“A lot of people are conserving cash and watching where their dollars are being spent,” Bull said. “There’s a feel with a lot of companies that the slowdown is a good opportunity to upgrade and replace their ‘B’ players with ‘A’ players.”
McDermott & Bull is focusing its efforts on technology, automotive, real estate services, healthcare and life sciences, and the food industry.
And the firm is emphasizing recruiting for emerging growth firms that are looking to fill out their management teams.
McDermott said many young companies are faring better than established companies that are getting hit hard by the slowdown.
“We’ve worked with a lot of companies funded within the last year that still are building their development teams,” he said. “One of the things we started back at DHR was an engineering and advanced technology recruiting practice looking to fill those very difficult-to-find, high-level engineering jobs that require Ph.D.s.”
The company’s engineering and advanced technology practice accounts for about 30% of revenue.
“What we like about Orange County is that it is a product-development mecca,” McDermott said. “While some telecom and semiconductor firms have been especially hard hit, other development-stage companies have just commercialized a product and are still growing out their teams.”
As a product moves further along the development cycle, a company typically will start adding marketing, sales and finance people, he said.
“Also companies doing outsourced design work for chips and other products are doing well,” McDermott said.
The two directors said their chief competitors include Korn/Ferry International as well as boutique firms that focus on single sectors and typically have one or two staffers. n
