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Small Firms Find it Easier to Snag Top Talent in Recession
 
 
Chicago Tribune
By Ann Meyer
February 23, 2009

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From Trisha Hutchison's perspective, taking a job at a small but growing company could have a big payoff. She traded a 13-year career at a large executive search firm with 72 offices to join Cavoure Advisors, a Chicago-based start-up that's expanding rapidly.

When she took the position, her friends congratulated her, but some questioned why she would leave her job in a tough economy. "I said, 'Why not?' I'm going to be doing the same thing but in a more entrepreneurial environment where I'll have less restrictions. The whole country is my oyster," said Hutchison, who became Cavoure's fourth partner on Jan. 5.

At a time when job slashing at large companies is making headlines, many small companies that have carved a growing niche are adding jobs. And they're finding top talent willing to make the jump from large firm to small for the promise of opportunity.

"It's a great time to go shopping" for new talent, said Doug Christiansen, president and chief executive of CPS Inc., a Westchester-based recruiting firm. "There is no better time for a company to rebuild itself than during a recession."

Small firms that typically have trouble competing with major corporations for talent stand to gain from a large pool of workers motivated to find a job. "There's something we refer to as a magic moment," Christiansen said. "You can make something happen today that yesterday you couldn't and tomorrow you can't. But today you can," he said.

CPS, which employs 70 recruiters, made about 700 placements in 2008, up more than 10 percent from the prior year, Christiansen said. In January, he noticed a change in the market, with fewer jobs and a longer fill time. But he doesn't think the situation is as dire as some suggest.

"It may look bleak and feel bleak, but as soon as credit starts to flow, it will turn around," Christiansen said, noting this is CPS' sixth recession.

Often referred to as the engines for job creation, small businesses generally are the first to hire coming out of a downturn to keep up with growing demand, experts said. But many of those hires will be contract workers, who don't get benefits, instead of employees, said Michael Alter, president of SurePayroll, a Glenview provider of payroll outsourcing services for more than 20,000 small firms nationwide.

Last year, small business hiring was up 3.5 percent nationwide, with use of contractors rising 8.3 percent, according to SurePayroll. In Illinois, the number of employees grew 0.3 percent, the company reported. The average paycheck size of small-business workers declined 3.1 percent nationwide and 0.9 percent in Illinois, according to SurePayroll's Small Business Scorecard, based on an analysis of client company payroll data.

In January, SurePayroll's Hiring Index indicated growth slowed to 0.3 percent for small businesses nationwide and measured 0.4 percent for Illinois small businesses. But it's difficult to generalize because small businesses run the gamut from declining businesses to those "treading water" and some that are "taking advantage of the market to grow," Alter said.

While finding the necessary capital to add positions remains a challenge for many, companies that are growing can pick up high-caliber employees, he said.

"If you're a hiring employer, I can't remember the last time the market has been any better," Alter said, noting that in a robust economy, small businesses often have trouble finding well-qualified employees at rates they can afford.

Alter is among those who believe entrepreneurs will pull the country out of recession by finding new opportunities for growth.

"Small-business owners and entrepreneurs learn how to adapt their businesses around what is going on," Alter said. "They can just move faster. It's sort of the survival instinct."

At Cavoure, faster service is a competitive edge. "What we're selling to clients is our turnaround time is faster and, by the way, this is our business. We've invested time and money to make it work, and we're going to work that much harder," Hutchison said.

Being small is an advantage in executive search, where larger firms refrain from recruiting from their own clients and find themselves with a smaller candidate pool to draw from as a result, noted Miles McKie, partner and co-founder of Cavoure. "So the perfect candidate can't be presented to the client," he said.

Last year, Cavoure had a closure rate of more than 90 percent, which McKie said is higher than the giants typically achieve.

The company's partners, all of whom have at least a decade of experience, collectively have led 11 chief executive searches for publicly traded companies with revenues of $1 billion or more, McKie said.

"If a [client] company can utilize a small firm with good senior partners and good capital, why would you ever use a large firm?"

While Cavoure plans to add a fifth partner with experience in recruiting chief information officers this month, the company doesn't want to become the next big executive search firm.

"We're not opening our doors to everyone who wants to join us. We're bringing on people who in the long term can be assets to this firm," McKie said.

Mindcrest, a Chicago-based legal services outsourcing company, also is being selective in the executives it brings on as it expands to new markets domestically and adds depth to its management team.

The company, which employs 525 lawyers in India to do document review and other routine legal tasks for U.S. companies, has opened offices in New York and Washington, D.C. The company recently hired Michael Duffy, formerly a litigator at Drinker Biddle & Reath, as its vice president of legal services, a new position designed to work with trial lawyer clients.

But Duffy, who has 30 years of litigation experience, didn't make the move blindly. He had worked with Ganesh Natarajan, Mindcrest's co-founder, previously and the two had kept in touch.

"After watching Ganesh's business grow and seeing the need for his service, it was the right thing to do," Duffy said.

Before he decided to take the job, Duffy researched the legal services outsourcing industry and went to Pune, India, to see Mindcrest's office and meet employees.

"When Ganesh tells me they have 500 people in India, I want to see these people. I want to know this is a real thing and the people are competent," Duffy said.

During the past six months, Mindcrest has hired eight experienced lawyers as executives in the United States and plans to hire several more as it opens an office on the West Coast, said Natarajan, president and chief executive.

"Finding the right people is key," he said. "We need a lawyer who thinks and acts like a business person, who can manage budgets and manage large teams."

"We're not opening our doors to everyone who wants to join us. We're bringing on people who in the long term can be assets to this firm," McKie said.

Mindcrest, a Chicago-based legal services outsourcing company, also is being selective in the executives it brings on as it expands to new markets domestically and adds depth to its management team.

The company, which employs 525 lawyers in India to do document review and other routine legal tasks for U.S. companies, has opened offices in New York and Washington, D.C. The company recently hired Michael Duffy, formerly a litigator at Drinker Biddle & Reath, as its vice president of legal services, a new position designed to work with trial lawyer clients.

But Duffy, who has 30 years of litigation experience, didn't make the move blindly. He had worked with Ganesh Natarajan, Mindcrest's co-founder, previously and the two had kept in touch.

"After watching Ganesh's business grow and seeing the need for his service, it was the right thing to do," Duffy said.

Before he decided to take the job, Duffy researched the legal services outsourcing industry and went to Pune, India, to see Mindcrest's office and meet employees.

"When Ganesh tells me they have 500 people in India, I want to see these people. I want to know this is a real thing and the people are competent," Duffy said.

During the past six months, Mindcrest has hired eight experienced lawyers as executives in the United States and plans to hire several more as it opens an office on the West Coast, said Natarajan, president and chief executive.

"Finding the right people is key," he said. "We need a lawyer who thinks and acts like a business person, who can manage budgets and manage large teams."


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