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HEADHUNTING

What happened to the old HR firms?

Based on the MediaMonitor, which registers in detail all personnel advertisements in national Slovak newspapers, we can see a striking development. From 1992 until 1997, Neumann, Jenewein, Management Partners, Dr. Ostertag and a handful of other companies dominated the recruiting industry.
These were the companies who opened in Slovakia for this kind of service. They were the pioneers and they set the standard. They have without a doubt done a great deal to make the labour market aware of modern recruitment services. These companies relied on their search and selection as well as on advertising; the amount of monthly advertisements per company is a very good parameter to judge market shares in the industry.


Gerard Koolen

Based on the MediaMonitor, which registers in detail all personnel advertisements in national Slovak newspapers, we can see a striking development. From 1992 until 1997, Neumann, Jenewein, Management Partners, Dr. Ostertag and a handful of other companies dominated the recruiting industry.

These were the companies who opened in Slovakia for this kind of service. They were the pioneers and they set the standard. They have without a doubt done a great deal to make the labour market aware of modern recruitment services. These companies relied on their search and selection as well as on advertising; the amount of monthly advertisements per company is a very good parameter to judge market shares in the industry.

But since 1997 a new trend that was almost completely unnoticed at first has begun to emerge: the established market leaders have gradually lost market share to new companies with a totally different approach towards clients, applicants and search techniques. If we look at the Top 10 of Personnel Advertisements by Recruiters in February 2000, we see the following:


1. Lugera & Maklér SK 140,000

2. Hill International SK 120,000

3. Catro-Consult SK 95,000

4. Selecta SK 66,000

5. Management Partners SK 44,000

6. Dittmann Consulting SK 36,000

7. Appel Counselling SK 24,000

8. Dagmar Brodersen SK 23,000

9. PMG SK 10,000

10. Personel Efekt SK 3,500


This is a completely different picture from two years ago. The major reasons for this dramatic change in market share are:

1) The Slovak labour market has changed rapidly, and sophisticated search techniques are necessary to keep up with the requirements from applicants and clients alike.

2) Because of the increasing competition in the recruitment industry (in Slovakia we have more than 80 registered recruiters!), fees are subject to competition among the firms and are presently at a realistic level (usually three times the gross monthly starting salary). Companies trying to maintain higher fees (4-7 months) rapidly loose their clients.

3) Search times are under pressure. Clients do not accept search times of more than three months. More striking is the fact that many new recruiters are able to introduce suitable candidates in less than 20 business days. If this is to be the market standard, those unable to meet the customer demand will certainly loose a part of their market share.

4) Clients do not need in-depth consulting about the labour market any more. Many clients have solid HR know-how in house. International firms like EuroTel, Globtel, Heineken and Emerson Electric do not require consulting agencies. They have their own HR departments which have mastered modern HR management tools.

Gerard Koolen is a partner at Lugera & Maklér. His column appears monthly. Send comments or questions to gkoolen@lugera.sk.

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