The Trade in Mustard Cutters

High-priced executives are job-hopping across the U.S. as never before. In the Midwest last week, a leading engine builder sadly watched his cherished production chief move on to a firm that makes recreational gear. Farther east, one of the nation's biggest manufacturing companies lost a top manager to a Wall Street brokerage house. Behind these and dozens of similar moves lay a major new force in the U.S. corporate life: the executive recruitment firm.

Not yet 20 years old as a major trade, executive recruitment came into flower after World War II, when the diversion of bright young men into uniform during crucial career years left the nation with a shortage of experienced executives. Concentrating on men who command $20,000 a year and up, the recruiting firms opened up a vital new talent pool to expanding U.S. corporations. Says the vice president of one rapidly diversifying company that depends on recruiters: "We don't have time to train enough men. We need the mustard cutters now."

The Leaders. By conservative estimate, the top dozen U.S. recruiting firms placed about 1,000 executives in new jobs last year; the 100-odd smaller firms that have recently sprung up probably reshuffled another 1,000. Among the leaders:

sb Manhattan's Thorndike Deland Associ ates, the oldest (founded 1926) firm, has branched out into every aspect of recruiting, though it still dominates its original specialty--placing retail trade executives.

sb Manhattan's Boyden Associates claims the highest ($50,000) average salary for the executives it places. Among its recent recruits: United Fruit President Thomas Sunderland and Studebaker-Packard Pres ident Sherwood Egbert.

sb Los Angeles' Hergenrather Associates, founded seven years ago as the first California-based outfit, has played a major role in converting West Coast corporations to acceptance of executive recruiting.

sb Manhattan's Ward Howell Associates, another specialist in high-priced positions, recruited General Maxwell Taylor for Manhattan's Lincoln Center--a job he quit to become President Kennedy's military adviser.

sb Chicago's Booz, Allen & Hamilton, the famed management consultant firm (with a big New York office), considers its prime business to be diagnosing a company's ills, but will also find new executives to help cure them.

The Process. With rare exceptions, the leading recruiters follow basically the same process. Armed with a corporation's detailed description of the job it wants to fill, the recruiter draws up a list of likely prospects. Tips come from trade journals, industry gossip, and the recruiter's own assiduously cultivated grapevine. Many recruiters also keep minute track of the progress of key executives in hundreds of U.S. firms. An executive who has spent too long on one level or has been moved laterally rather than upward is apt to prove particularly receptive.

After winnowing the prospects down to half a dozen or so, the recruiter makes his move. Often it is a telephone call to the executive at. his home. The ploy: asking help in finding for a top job in an unnamed company a man whose experience just happens to parallel the executive's own. The reply is often right on the button: "Why. I could handle that job myself." With that opening, the recruiter interviews the prospect at length, conducts a detailed background check, sometimes with the help of a detective agency, and occasionally runs the prospect through batteries of psychological tests. Most recruiters narrow the field to three, then hand the prospects over to the client.

Challenge Is the Thing. What do the recruiters offer that captures so many executives? Not salary, most executives agree--though the promise of fat stock options in the new job often helps. The real clincher, however, is most often the prospect of greater challenge. "I was delighted with my old job," says United Fruit President Sunderland, who was en ticed away from a vice-presidency at Standard Oil of Indiana. United Fruit's difficulties were what excited him. "I knew there would be great personal satisfaction in straightening those problems out."

Still another lure the recruiter can offer is a new chance to an executive whose reputation has been unfairly blemished by a whopping company failure. Raytheon's successful new president, Richard E. Krafve, 54, was recruited from Ford Motor Co.--where his last job was vice president in charge of the Edsel division.

Managers Union. Though the recruiters charge client companies stiff fees for their services (the average: 20% of one year's salary for each executive recruited, plus search costs), many corporations find that recruiters can cover a larger field than their own personnel departments. And through a recruiter, a company can solicit in secrecy--a vital consideration when hiring to crank up a new product line or open a new division.

But those who stand to gain most from the recruiting system are executives themselves. Through a discreet word to a recruiter, a dissatisfied executive can be put on to opportunities in industries where he has no personal contacts and can make himself available without advertising his restlessness. For U.S. managers as a class, the recruiting firms now serve as a kind of informal trade union, a force obliging U.S. corporations to worry about their executives' well-being and to nurture it financially--or run the risk of being raided.

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