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INTERVIEW with "The Wall Street Journal" (USA)

Full Interview between Suzanne McGee and ART's Managing Director. Topic: The Job Market for Senior and Mid-Management Executives in the Telecommunications Industry

WSJ: "Are there any areas of strength in this market, either by business segment or regionally (within the USA)?"

ART: As a whole, we find that the telecom market in the U.S. remains a shockingly slow job market amidst truly momentous technological advances in telephony. The good news is that those companies that are expanding and hiring are companies that actually have innovative and useful products and services. These are companies, in many cases, that are living without the safety net of guaranteed IPO windfalls or deep-pocketed venture capital firms. These are companies that have to justify their business models every day of the week – to customers, to their employees, to investors and to themselves -- and every new opening comes only after a great deal of cost-benefit analysis.

“The companies that are hiring these days have to be conservative with their spending, so ART fits well into their expansion strategies, because unlike our competition, ART places all senior and middle level managers without any need of retainers. Our client companies therefore are freed to interview our candidates and evaluate the potential benefits that s/he could offer their organization without any up-front risk or cost from our side. We have always had this approach to the process of executive search since our founding in 1987, because we feel that non-competitive, retainer-oriented search is a sloppy, passé practice that only guarantees payment to the search firm while limiting client choices. As it turns out, in a bad market such as this, many new clients are coming to us, because they are seeing that with ART they can meet the best candidates on six continents and pay us only if they feel our candidates can fulfill their key needs.

“The most active sectors that we have been seeing within the telecom industry seem to be companies aiming at the consumer sector. The business-to-business market has not been too good for telecom, because during this recession, few companies generally have had enough reserves or taste for new telecom products and services. The main growth markets that we see are in electronic components for mobile handsets or cellular base stations, such as wireless semiconductors. In the telecom services sector, we have seen interest in specialized cell phone services, such as prepaid PCS.”

WSJ: "Are there more opportunities with small companies or large companies?"

ART: We are seeing two trends: brand new openings with small and medium sized companies, and confidential replacement change-agent searches with large companies. The large companies have been focused on restructuring, repositioning, or mergers and acquisitions. The small and medium sized companies are often looking for their first- or second-generation management team members, in order to position themselves better in their market and to advance their mission or market reach. We enjoy helping build small and medium sized companies into tomorrow’s leaders, and it’s a gratifying challenge to find just the right person that a billion dollar company needs to make far reaching corporate changes that help its long term growth.”

WSJ. "What kinds of businesses are most likely to need new talent?"

ART: Prudent, fiscally conservative, forward-looking companies with useful products and services that potential customers want to buy are the companies that are most likely to need our services. These are companies that know how to survive in a moribund market, but they may need to find a few key people who may lead them to thrive. Companies whose business models were constructed on fat margins and overly optimistic expectations also need to bring in fresh talent, because the people in their ranks might only know how to slightly modify their methods when entirely different outlooks, strategic positions, and operational processes need to be introduced.”

WSJ. "What skills are employers looking for?"

ART: The common theme is ‘managers who can look beyond the panic of the current economy and who know how to maneuver in a bad economy.’ For small and medium sized companies, these are generally unbureaucratic, results-oriented, hands-on managers who can work with lean budgets and lean staff numbers. For large companies, it’s people who are more interested in problem solving than office politics, stock options, and golden parachutes. The person who is more interested in the golden parachute is the person who is more interested in bailing out than in running a proper business, and maybe it has taken a meltdown for the US telecom industry to realize that such people aren’t necessarily good for running a company.

“Let’s face it. The US telecom industry is still suffering from the laziness of living off the fact that America was the world’s first country to have generally good universal, wired, direct dial phone service. Once that goal was achieved, say around 1960, the delivery of new products and services offered to consumers and businesses was absurdly slow, considering the technological innovations produced by US industry. The big carriers have enjoyed being monopolies, and the Worldcom collapse had to do with playing with easy money and nothing to do with trying to make new products that people and businesses wanted and needed and delivering them efficiently and at a good price. The employers that survive today need to hire people who aren’t recycled Baby Bell executives without imagination. The managers needed are those who are smart and aware of exciting developments in the telecom industry worldwide and who have the energy to try to bring the US telecom offerings up to the levels that can be found in East Asia, western Europe and elsewhere. Then the customers will come back and profits will rise.

“The telecom industry, both hardware and telecom services, is one of the most international and technologically dynamic industries. However, in many regards, the US telecommunications industry is characterized by big carriers and hardware companies that nowadays are offering significantly inferior services or products to companies in South Korea, Japan and many European countries. As long as telecom carriers concentrate their market energies on reprehensible tricks like legalized slamming and lame, last-century, services like call forwarding, then they should expect that listless customers will gravitate to lower and lower priced long distance services and VoIP. The telecom industry needs, above all, real innovators, except perhaps in the finance department, where it’s probably best to stay with the good, honest fundamentals. Alexander Graham Bell must be rolling in his grave at how, a hundred plus years later, the offerings of US telecom companies are only a little better than connecting two tin cans with a wire and shouting into them.

“With regard to mobile services offered in Australia, Malaysia, South Africa, or in many other countries, the consumer can today enjoy superior choices of cell phone services. In South Korea, for example, people have cell phones that allow them to not only send text messages easily, but with which they may buy products from vending machines (“m-commerce”), and people can even watch EVERY network TV shows on their handphones on demand through wireless streaming media. Since the best innovations and product offerings in this industry exist outside the US currently, senior and middle management executives need to be exceptionally international in their perspectives. They need to be good learners. This should not be a time for American telecom execs to sit around worrying about how to divide an ever-shrinking pie. Rather, they should be getting on planes to see what the 21 st Century is really all about. They need to understand how to organize their companies and departments and industry to accommodate a whole banquet table of fresh, tasty pies.

"We notice two different types of calls for new hires. One involves survival, change, and turnaround strategies. The other involves expansion strategies.

"In the Turnaround/ Business Survival Category, we might see the following requests among employers:

----CEO, COO, President, General Manager: reformulate the company vision, shed product lines or business units that cant survive.
----Sales/ Marketing VP, Director, Manager: hunter/prospectors or people with contacts in new markets
----CFO, Financial Controller: mergers & acquisitions experience and tight budgetary control (Oxley-Sarbanes, etc.)
----Supply Chain (Purchasing/ Materials/ Distribution): tremendous cost savings through coordinated sourcing/ supply chain strategies

"In the Expansion Category, we might see the following requests among employers:

----CEO, COO, President, General Manager: capable of mapping out and managing expansion
----Sales/ Marketing VP, Director, Manager: new market development, including international markets or into non-English US language markets
----CFO, Financial Controller: investment bank connections in order to finance internal expansion or to buy competition
----Supply Chain (Purchasing/ Materials/ Distribution): upgrading management ranks to accommodate larger company needs.

WSJ . "What are the salary trends?"

“Bonuses linked to achievable, pre-agreed targets are the trend. Nobody is giving away free money as far as base salaries are concerned. But candidates who come in with provable track records of success and a lot of self-confidence usually are willing to take lower bases in return for high bonuses pegged to their achieving personal targets. The value and amount of stock options vary tremendously from company to company, but nowadays I guess everyone is still feeling a bit like stocks are not as reliable as a good base salary and bonus or commission package. The people that ART typically are asked to recruit are managers who usually return many times more in profit or savings than the outlay for their compensation, so most of our clients feel that our candidates are good and necessary investments, and to get a person who can really make a company a success, is worth a good and fair salary.


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