At a time when the government announced it would continue to curb budgetary spending, EUR250,000 is a record-high fee. The amount is at least ten times the fee received by headhunter to find a chief executive officer for a multinational corporation. This is why headhunters’ revenue is not that high, considering the executive search company with the highest revenue last year was Pedersen & Partners (EUR825,000).
The fee set by the Economy Ministry is high compared with what large executive search companies abroad charge. For instance, the average amount paid to the consultants of Heidrick&Struggles, a top five company worldwide, for recruiting an executive stood at EUR77,000 in 2010, according to its financial report.
The first four companies to get private CEOs are Hidroelectrica, Oltchim, Romarm and Electrica Furnizare. Two of them, Oltchim and Electrica Furnizare, will have interim CEOs because they are due for privatization in the middle of next year.
The project to find private sector CEOs for state-owned companies is now at the stage when the authorities are supposed to hold a tender to pick the headhunters that will recruit the private managers. The first conditions of contract for the first four companies to get private sector CEOs were published on the Economy Ministry’s website, and the rest of the documents for other companies will become available this week.
The documents say that the maximum estimated value (excluding VAT) of the contract signed with a headhunter should be EUR250,000, 99% of which would be paid by the state-run company in question and the rest by the Economy Ministry. To get such a high value contract, the headhunters participating in the tender have to meet certain conditions: average turnover of EUR40 million over the last three years, at least 30 offices throughout the world, including ten in Europe, and an EUR5,000 deposit to participate in the tender.
The top ten executive search companies worldwide include Korn/Ferry, Heidrick&Struggles, Egon Zehnder, Russell Reynolds Associates, IIC Partners and Amrop. Some of them operated in Romania and then left (Korn/Ferry, represented by the company run by headhunter Radu Furnica, Leadership Development Solutions or Heidrick&Struggles that withdrew less than a year ago), so that only two international companies are still present on this market via partnerships. The two are IIC Partners via KM Trust&Partners run by Radu Manolescu and Amrop, which entered the market this year, after it took over The Searchers run by Oana Ciornei and Marius Precu.
(English version by Loredana Fratila-Cristescu)