Minority-Owned Search Firms Struggle to Net Big Clients

By Kemba J. Dunham From The Wall Street Journal Online

Minority-owned recruitment firms often find it tough to forge the deep relationships with major corporations that can be crucial to a recruiter's success.
Such firms -- which don't limit the demographics of their search but are often relied upon by hiring companies to present women and minority candidates -- say their jobs are getting harder than ever. Some recruiters cite the current political backlash against affirmative action and diminished interest in diversity among high-tech start-ups. Others contend big employers call only when they come under fire for a lack of diversity.
In this field, small firms are often at a disadvantage. Most large employers say they prefer the mainstream, larger search firms, which they believe can deliver the widest range of candidates with the necessary skills. Only one, or maybe two, minority-owned search firms rank among the 50 biggest players, and most reap annual revenue of less than $3 million, says Darryl Miller, an African-American vice president of Diversity Advantage, a Jersey City, N.J., search firm. The 25 top U.S. search firms have grown an average of 24% a year since 1995 and garnered annual average revenue of more than $1.7 billion last year, reports Hunt-Scanlon Advisors, a search-industry consulting firm in Stamford, Conn.
Consider Wendell Johnson, the African-American owner of a small executive-search firm in Danbury, Conn. In December, he received a letter from Citizens Communications Co. that expressed interest in diversifying its work force and establishing a "recruiting relationship." The Stamford, Conn., telecommunications and utilities concern offered Wendell L. Johnson & Associates Inc. a 20% contingency fee for hiring referred candidates.
Mr. Johnson replied that he was happy to advise company officials about their diversity push, but he declined to recruit on a contingency basis, as that isn't his normal pricing arrangement. No one answered his letter nor his numerous calls to Citizens executives. "There was a lack of sincerity on their part," Mr. Johnson contends. The company says it didn't follow up simply because Mr. Johnson refused to work for a contingency fee. Citizens said it is sincere and that it has since established several contingency relationships with other recruiters to identify minority candidates.
When minority-owned search firms attempt to cultivate ongoing relationships with corporate giants, they sometimes feel demeaned. William Hawkins, president of Los Angeles search firm Hawkins Co., says certain big businesses send him broad questionnaires ordinarily used to select minority-owned vendors. The questionnaires request irrelevant information such as the measurements of his facilities. "This is not the way they select the major search firms," Mr. Hawkins says.

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