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Jump on to Korn/Ferry International at the offer and enjoy a profitable ride!
by Siu-Yee Ng
Endless hours slaving over the computer, working on a resume. You’re just about done, drop-dead tired...when the computer crashes and you just remembered you hadn’t saved yours document in, oh, an hour at least. When you finally finish polishing up your life, you send out your credentials to twenty different places only to receive half if that many responses. Then there are the interviews, or the interrogations....
Let’s face it. Westerners and westernized societies are a lazy bunch, with remotes for just about everything. In fact, it’s that very laziness that is behind the concept of Progress as we know it. So you can imagine the attention Korn/Ferry International will receive when it goes public this year. Korn/Ferry International is the world’s largest executive search firm, with 384 consultants based in 71 offices across 41 countries.
Yes, I hear you. Head-hunting is not exactly a brand-new concept. And in the United States, the peacetime unemployment rate average hasn’t been this low since 1957.
But I have one word for you. Make that two: Mergers and "restructuring." After pachyderms like Mobil and Exxon or Daimler and Chrysler have mated, where do all these people go -- managers, executives, and I hear even a vice president or two getting fired?
Well, you may have guessed it: Some head toward the unemployment line and others head toward temp and executive search firms like Korn/Ferry International.
Leading the pack
The company first filed with the SEC in August of 1998, but has yet to debut because of bad market conditions. In December 1998, the company filed an amendment with the SEC, which leads me to believe that the company will continue with its IPO this year.
Korn/Ferry International’s search services are typically used to fill senior-level positions, such as board directors, chief executive officers, and other senior executive officers.
According to the Kennedy Information, a leading information provider for the industry, the company has ranked first in revenues in the executive search industry for the last 19 years. The worldwide executive search revenues grew at a 20% compound annual growth rate -- from approximately US$3.5 billion in 1993 to US$7.3 billion in 1997.
Since fiscal 1993, the company has generated compound revenues of US$315.0 million and performed over 5,870 assignments for more than 3750 clients including 43% of the Fortune 500. The number of searches increased 23% to 5879 in fiscal 1998 (from 4774 in fiscal 1997).
Global domination
Globalization of business and the expansion into new markets have led companies to look beyond their regions for local experiences in the region where they are doing business. With 71 offices in 41 countries, Korn/Ferry is well positioned to tackle this demand.
The company opened its first office in Los Angeles in 1969, and currently has 20 offices throughout the U.S. and Canada. Revenues have more than doubled in this region from fiscal 1994 to fiscal 1998.
Forming a cult
Now, with a firm rooting in its strong senior level client loyalty (more than 80% repeats) and its established pipeline, Korn/Ferry is on is way to middle-management dominance.
Korn/Ferry has a highly advanced technological infrastructure used to increase the speed and quality of its services to its clients worldwide. The company’s databases contains the profiles of 1 million executives and over 310,000 companies.
Of course, the company has not ignored the potential of the Internet. The company introduced Futurestep, which combines its senior-level expertise with exclusive candidate assessment tools to recruit candidates for middle-management positions. This Internet search is different from others because of its sophisticated filtering process and the ability for professionals to interact with candidates and clients.
The company and Futurestep have an exclusive alliance with the Wall Street Journal, the first of its kind in the industry. The alliance provides the company with preferred advertising rates and requires the purchase of a minimum amount of print and on-line advertising.
Another interesting note is that Korn/Ferry International is an employee owned and operated company. This means that every employee has a stake in the Company’s well being. Not a bad position for outside investors to be in.
Korn/Ferry International is tentatively priced at US$13-15 and the proposed ticker is KFY trading on NYSE. The underwriter is Credit Suisse First Boston.
For more information contact Korn/Ferry International, 1800 century Park, Los Angeles, CA 90067, USA, tel. (310) 552-1834.
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