PERHAPS not surprisingly, Odgers Berndtson’s boss was in an upbeat mood when City A.M. visited him recently in his large office overlooking Hanover Square in the West End. Last year’s preliminary revenues had just come in: they are an improvement on the year before, always welcome news in the present environment.
Richard Boggis-Rolfe, the privately-held firm’s chairman, thinks 2011 will be long and uncertain, but these numbers give the headhunting boss, who has spent 30 years in the industry, the sense that the recovery is beginning to gain traction.
Last year, the partnership, which employs 1,000 staff across 45 offices worldwide, produced sales of $230m (or £143m; the firm is still working out profit figures), compared to $212m the year before. As part of this, its UK (and largest) office, which employs 400 people, including the former Tory cabinet minister Baroness (Virginia) Bottomley of Nettlestone, made £72m, compared to £63m a year ago.
Boggis-Rolfe, a sprightly 60-year old, says: “I am fundamentally optimistic. Having the right people in key jobs is crucial to the good running of a company, and that need is as great as it has ever been.” But he adds: “It may be a difficult year. There may be more industrial action, more pressure from inflation. Professional service firms like lawyers, accountants and us thrive on corporate activity. But companies tend to postpone decisions in this climate. There will be a lot of hanging on this year.”
Odgers Berndtson is one of the six biggest executive search firms in the world, coming behind larger US rivals such as Korn Ferry and Spencer Stuart. But it is the only UK firm that operates on such a global scale.
The firm specialises in filling top jobs in a wide variety of sectors. It placed former City minister Paul Myners on the Marks & Spencer board; installed the governor of the Bank of Ireland, Richard Burrows, as chairman of British American Tobacco; it is in the middle of filling the key spots for the organising committee of the Brazilian Olympics. It performed the same function for the London organising committee.
Boggis-Rolfe, a clubbable chap who spent ten years in the army before taking a history degree at Cambridge and then going into recruitment, adds: “Government work held up incredibly well for us last year. Although the coming spending cuts mean that this will fall this year. But so far this year we are beginning to see commercial activity rise.”
Boggis-Rolfe started in the industry in the early 1980s at US giant Russell Reynolds. After gaining experience at a number of firms he bought Odgers in 1997, which then employed just 25 people. From early on, he “had a deliberate strategy to have a wide spread of business”.
Finding placements in the financial services sector accounts for 20 per cent of the group’s sales, and other high-paying private sector jobs make up another 40 per cent. But 20 per cent of sales come from filling public sector posts, while the remaining 20 per cent of sales come from filling lower paid (under £150,000 a year) public and private sector jobs.
When Boggis-Rolfe started off in executive search, he moved in quite a secretive world. But he baulks at that description now. “Virtually every executive has either been contacted by a headhunter, or has used them,” he says. “Now it is almost the case that if you do not use a headhunter to help fill a top job, you may be accused of handing out jobs for the boys.”
When the Odgers boss began in the business his desk would be surrounded by scores of rolodexes and business cards, but now computer databases have “transformed the way you gather basic information about people”.
The scope of the headhunter has also changed. He says: “When I started we were all generalists. Now it is much more common to specialise. We have a partner here and all he and his team do is recruit chief financial officers. He knows the market and who might be ready to move.”
The headhunter says a trustworthy reputation and the ability to access top people is important to the firm.
Bottomley has worked for the business since 2005 and now chairs the firm’s board and CEO practice. “Everyone takes her call,” smiles Boggis-Rolfe.
However, the firm’s more recent high-profile hire did not work out as well. In 2009 it took Johnny Cameron on as an adviser; he had been head of investment banking at Royal Bank of Scotland when it was bailed out by the government in 2008.
But after only a couple of months, Boggis-Rolfe had to let Cameron go after his role came to light and the government threatened to remove Odgers Berndtson from its roster if he remained at the firm.
Boggis-Rolfe says: “I think it is important that people who make mistakes are able to redeem themselves. But the marketplace was not ready for his return.”
Headhunters typically take up to one third of the first year’s salary of the executive they place in fees. And the individual headhunter responsible will in turn take one third of that as a bonus.
At Odgers, teams normally work in units of three or four, made up of a partner, one or two juniors and a researcher. But for Boggis-Rolfe, a key part of how the firm operates is the weekly brainstorm his senior partners have over its current list of mandates.
He says: “It’s a chance to share knowledge across the firm, and also it is an opportunity to show off how many key people you know. The answer to filling a post may not lay in one set of contacts. For instance, over the past few years we have recruited a lot of business people to work in the public sector, like Paul Deighton [who moved from European chief operating officer at Goldman Sachs to CEO of the London Organising Committee of the Olympic Games]. That was a result of our finance, commercial and public sector teams working together.”
But executive search firms are often accused of artificially stimulating a corporate jobs merry-go-round and of being inflationary in terms of pay and benefits. Boggis-Rolfe responds: “Workers are free agents who are looking to better their lives. I think what we do makes the market a bit more perfect. We help get more information about good jobs get out, and companies get better applicants to choose from.”
On executive pay inflation, he says: “It used to be that in public companies it was hard to find out about salaries. But now there is so much transparency, and it is this feature that has served to push up salaries. But it is undoubtedly true that all moves are inflationary. All movement creates heat.”
If Boggis-Rolfe is right about that, he will undoubtedly be hoping that as this year gathers pace, it becomes a case of out of the frying pan and into the fire.
CV | RICHARD BOGGIS-ROLFE
Work: Joined the Coldstream Guards in 1970, left as a Major in 1980; director at Russell Reynolds Associates, 1983; Norman Broadbent International, 1984-97; managing director at Norman Broadbent (Hong Kong) 1986; chairman at Barkers Human Resource Advertising, 1992-97; chairman at NB Selection 1995-97, (chief exec 1987-95), group managing director at BNB Resources 1995-97, chairman and chief executive at Odgers Berndtson 1998
Education: Trinity College, Cambridge, MA in history; London Business School.
Lives: Gloucestershire; flat in London
Hobbies: Horseriding, gardening