Niche Recruiters Help Fill Diversity Gap at the Top

In the world of executive recruiting, networking is everything. And the networks of people like Alex Rodriguez are suddenly in high demand.

Working as a business development consultant in Latino advertising and marketing four years ago, Rodriguez found himself doing favors on the side for industry firms, hooking them up with the bilingual and bicultural talent they needed.

Today he runs Diversity Consulting Group, an executive and mid-management search firm in Santa Barbara whose revenue grew 25% over the last year. Though Rodriguez usually carries about eight positions that need filling, he has twice that now.

“There’s a huge need,” said Rodriguez, whose clients range from New York insurance companies to Texas advertising agencies.

His firm, though small, has entered a promising niche.

More than ever, companies of all sizes are looking to diversify their top ranks. The motivations are varied: Major corporations want management to better reflect their minority work forces. Others need culturally sensitive--and often bilingual--managers to sell everything from insurance to shampoo to minority consumers. Others still are searching for executives to help them expand into Latin America.

Underlying it all is a desperate thirst for top-ranked job candidates at a time of record unemployment. And the search for high-level minorities is even more difficult.

Although 100,000 people will receive MBAs in the U.S. this year, only 3,300 will be Latino and 5,000 African American, according to the National Society of Hispanic MBAs and the National Black MBA Assn., both of which have seen corporate interest in their members skyrocket in the last few years.

“You’re going to see tremendous growth in this area and those recruiters who are already in it are well ahead of the game,” said Joseph Daniel McCool, editor of Executive Recruiter News and Recruiting Trends of New Hampshire.

“Large corporations are understanding that in order to serve a diverse customer base, they need to look more like their customers. Having an outside recruiter to turn to can really accelerate a corporation’s move to look more diverse.”

It would be illegal for companies to intentionally consider only minority candidates for a job. They can, however, turn to diversity recruiting firms to broaden their candidate slate. By networking with groups that represent minority MBAs, engineers and other professionals, niche recruiters can help corporations discover talent that mainstream firms may not be aware of.

And because many diversity recruiting firms are minority-owned and staffed, they rely on their well-stocked personal Rolodexes, much as Rodriguez did in his early days.

Robert Alaniz, managing director of public affairs at Hill & Knowlton, has received about 10 recruiting calls in the past year alone on behalf of companies ranging from “dot-coms” to Fortune 500s--most from recruiters he has known for years through industry circles of Latino professionals.

“Most of the big corporations wouldn’t even know where to begin,” said Alaniz, who is staying put but often passes on tips of other Latino executives he knows.

The niche is still small. Of 5,000 North American recruiters listed in a directory published by McCool’s company, only 25 stated diversity as their focus or sub-specialty. But signs are that new entrants are discovering the market at a quickening pace.

Fred Flores, for example, launched Diverse Staffing Solutions in Fullerton in January to specialize in Latino, black and Asian candidates. About a third of the business is focused on executive search, and already clients include Walt Disney Co. and Nestle.

Much as the reasons for corporate diversity have evolved, so has the recruiting niche.

As a recruiter for Korn Ferry, Bill Hawkins was called upon to do a job in 1979: A major record company needed someone to head what was then called the black music division. The only African American in the Los Angeles office, Hawkins knew where to turn.

Placing Minority Execs Is ‘Smart Business’

Five years later he formed Hawkins Co. Last year he posted $1.5 million in revenue, promising a diverse slate of top-level candidates to clients that include major corporations, school districts, hospitals and police departments. About half of his clients ask specifically for women and minorities, but faced with a diverse slate, about 75% actually hire them, he said.

Rather than placing token minority executives at the head of minority divisions, he said, “now, people want to do it because it’s smart business.”

When searching recently for a West Coast director of human resources, Avis Rent A Car Inc. Vice President of Human Resources and Diversity Jim Keyes turned to search firm Fresquez & Associates of Oakland, launched by Ernesto Fresquez in 1989.

Because the Avis work force in the U.S. is 50% minority--as is 27% of its management--Keyes was looking for a firm that could identify talented bilingual candidates.

Fresquez delivered, adding Avis to a client list that includes Xerox Corp., PepsiCo. Inc., Clorox Co., Heinz Foods and Wells Fargo Bank.

Some firms, such as Westwood-based Steinbrun Hughes & Associates and Los Angeles-based Berkhemer/Clayton Inc., don’t specialize in a particular ethnic group, but rather promise a diverse slate of top candidates--women and minorities among them.

Of candidates presented by Berkhemer/Clayton since it launched six years ago, 40% have been minorities and 45% women. The firm also puts out a directory of minority and women board candidates.

About half of the candidates placed by Steinbrun Hughes are women or minorities, and half of those bilingual, reflecting the needs of an increasingly global clientele, said founder Lisa Hughes.

Others have carved out a sub-specialty in diversity recruiting. David Gomez & Associates is the largest Latino-owned executive search firm in the country and holds a spot on Inc. magazine’s list of the country’s 500 fastest-growing privately held companies.

Diversity Division Boosts Revenues

But it was not until several years ago that Gomez launched a diversity division for his Chicago-based firm. That effort, which got rolling last year and includes recruiting Web site iHispano.com, has boosted the firm’s revenues notably.

Gomez recently was part of a Silicon Valley meeting with three top-level assignments from technology companies looking to diversify their ranks and is considering opening a Menlo Park office. Although the company posted $5.7 million in revenues last year, it is on track this year to reach $8 million, he said, largely on the strength of the diversity push.

The relative scarcity of senior-level minority candidates has led diversity recruiters and savvy corporations to compete aggressively for them, said National Black MBA Assn. Executive Director Antoinette Malveaux, with several diversity recruiting firms vying for exclusive access to her group’s membership.

Add the need for bilingual or even trilingual candidates and the air gets more rarefied still. The past year has seen a burst of new Spanish- and Portuguese-language portals and Web sites catering to the Latino market here and abroad. For them, bilingual management is not about diversity, but necessity.

Ditto for the burgeoning world of Spanish-language advertising, which in dire need of copywriters and managers who understand not only the language but the cultural subtleties of U.S. Latinos, said Rodriguez, who has a 1,300-member e-mail list in that industry alone.

Enter Spanusa, which stands for “Spanish in the U.S.A.” The Mamaraneck, N.Y., firm promises to deliver Spanish- and Portuguese-speaking candidates, regardless of ethnicity, and boasts a database of 20,000 candidates culled over the past decade.

Founder and President Manuel Boado just opened a Miami office and plans to expand to Los Angeles and Texas by next year. Revenue this year has already surpassed that of 1999. Among his corporate clients: IBM Corp., Bell Atlantic and the Argentina-based portal, ElSito.com.

The executive headhunters are blossoming at a time when as many as 5,000 Internet resume banks have launched to meet the need for lower-level workers, among them a flurry targeting ethnicity or language skills.

An early player is Florida-based LatPro.com, for Spanish- and Portuguese-language professionals seeking jobs here and abroad. The site hosted 200,000 visitors in April, double that in January, and has served as a resource not only to multinationals but to small U.S. companies serving the Latino market and niche recruiters such as Boado and Fresquez. About 60% of the jobs listed are with companies in the United States, said CEO Eric Shannon.

While the diversity recruiting niche booms, big players such as Korn Ferry and Heidrick & Struggles are taking heed. Already firmly established in Latin America, they are working to diversify their own recruiting force at home, McCool said.

“Minority representation in the executive recruiting world is poor,” he said. “But this is what’s coming and they better start acting now.”

Added Hawkins: “I think where our competition is coming from now is the major search firms. . . . They are bringing on search consultants who are people of color and women, [so they can say] ‘Not only can we do worldwide recruitment, but we can do diversity recruitment. You don’t need to deal with Hawkins.’ ”