JULY 6, 2000
HIRING LINE
Andersen Consulting's Creative Lures for New Talent | Recruiting Director David Reed reveals how the firm recruits people with "a characteristic of lifelong learning"
| The hot economy's thirst for talent hasn't been kind to firms like Andersen Consulting. Like its competitiors, Andersen has lost some of its brightest stars to Internet startups over the past few years. In fact, its CEO, George Shaheen, left last fall to take the helm of online grocer Webvan.
Few people at Andersen feel the crunch more than David Reed, director of U.S. recruiting. In any given year, Reed and his team must fill 4,000 to 6,000 consulting slots that emerge among the 18,000 total positions at Andersen's 44 U.S. locations. Roughly 65% are entry-level jobs, the remainder senior positions. All told, Andersen employs some 65,000 people in 48 countries and brings in $8.9 billion in annual revenue worldwide. Business Week Online's Jennifer Gill recently caught up with Reed to discuss, among other things, how Andersen recruits in such a hot job market, and how it hopes to curb its brain drain. Here are edited excerpts of their conversation:
Q: I've heard about a new benefits program at Andersen called eUnits. Can you
tell me more about it?
A: We are investing $200 million in e-commerce-related companies on our
employees' behalf, through Andersen Consulting Ventures, which is the
firm's venture-capital unit. The wealth that is created by these investments
will be distributed to the employees as employee units, or eUnits, which is a
unique and proprietary form of compensation that takes advantage of the
value that's generated through the electronic economy.
There are two aspects to [eUnits]. One is what we call loyalty awards, which are granted [every year] to people who have stayed three years or more with Andersen Consulting. All employees are entitled to loyalty awards. The second type of eUnit award is called the performance award, which is tied specifically to one's performance and contribution to the success of the firm and our clients.
These eUnits are above and beyond regular compensation. We're not changing anything about the way we pay people, including the fact that we pay overtime [to] our nonexecutives.
Q: Why did you implement eUnits?
A: There's a war for talent, as you've heard. And this is one of the ways we want to be able to share the wealth with the employees who work so hard here.
We're also greatly expanding the partnership -- the ownership -- of the firm. This year alone, we're doubling the size of the partnership. We're going to make more than 1,000 new partners this year. And that is, again, to ensure that we are continually adding to the entrepreneurial capability of the firm, making our top performers owners in the business.
Q: What is your annual turnover rate?
A: Our annual attrition ranges between 15% and 20%, which sounds pretty
high. And in fact, it is higher than we'd like it to be, which is why we're
doing [more] partnerships and the eUnit [program]. In the recent past, [the
attrition rate] has trended up toward the higher end of the range, but I
think in comparison to our competitors it's fairly typical.
Q: Have you been more enterprising in the way you seek out talented
workers?
A: Absolutely. We've used a number of recruitment channels to try to find
these hard-to-find people. One of the more interesting ones is an alumni
outreach program. About six weeks ago, a letter went out to Andersen
Consulting alumni who left us last year, under the signature of our U.S.
managing partner, telling them that a lot of things have changed at
Andersen since we got a new CEO and since we announced programs such as the
partnership expansion and eUnits.
It was an invitation to people who already know us to take a second look
at Andersen Consulting. [As a follow-up,] we have been calling these
individuals and talking to them about how they're doing and what their interests are and explaining what's changed. We have quite a few leads from people who are interested in returning, some from dot-coms that have gone under, some
from other consulting firms, some from industry.
We're also taking advantage of the Internet in ways that we've not done
before through our own Web site [and] also through third-party Web sites
like Monster.com.
The third area relates to employee referrals. Our employees know, better
than anybody else, what we're looking for. And so we have implemented an
employee-referral program whereby our people can earn between $5,000 and $7,000
for each successful referral that they make. If you make two or three of
those in a year, that's a good chunk of change.
Q: Apart from basic competence, what qualities do you look for in applicants?
A: There are really two aspects to what Andersen Consulting looks for in
applicants. One has to do with what they know, and what their skills are.
That might include industry expertise, functional knowledge, technical
skills, consulting experience -- all of those different kinds of content
knowledge.
We also look for softer attributes -- how people go about doing their
job. We look for intelligence, for work ethic, and motivation, the ability to
adapt to constantly changing circumstances. And maybe most important, [we look
for] a characteristic of lifelong learning. Everything changes so quickly in our
business that we really need people who are able to learn new things and
apply them very, very quickly.
Q: How do you get at those softer attributes when you are interviewing
potential candidates?
A: It's clearly the more difficult of the two aspects to assess, and
there's a bit of an art to it. Everyone at Andersen Consulting who interviews
[job seekers] goes through fairly rigorous training that teaches them how to
tease out and then recognize whether or not somebody possesses these attributes. They go through two days of training, which is instructor-led, with classes of 20 to 24 participants. It's very hands-on. We even bring in real candidates -- not that they're candidates for a job, but they want interviewing practice.
An interviewer might ask: "Can you give me a recent example of a situation where you dealt with a difficult problem? What was the problem, and how did you go about solving it?" Then the interviewer would spend the next 15 to 20 minutes trying to understand the situation and specifically what the individual did and said and thought and so forth. The advantage is that it's a real-life situation. It's not a hypothetical question, where an applicant can tease out what he or she thinks we're trying to get out [of them]. We try to figure out what the person did in that situation because we know that it's very likely they will act in a similar way were they to be working for us. So those interviews are pretty in-depth.
Q: Sounds like it. How long would an interview last?
A: They last anywhere from 45 minutes to two hours. We'll typically go
through two or three scenarios and try to get to the behavioral aspects.
Q: What are the most common mistakes job applicants make?
A: We often see very vague resumes, not using a lot of specific examples
or action words. Today, most companies -- including Andersen Consulting --
use resume-management systems that are keyword based. So a resume that doesn't contain a lot of specifics or keywords is not going to pop up.
Q: What keywords would pop up on your system?
A: Skills related to particular languages, systems, industries, or employers.
Q: Do you see any other mistakes by applicants?
A: Longer resumes are not all that helpful either, because, after all,
it's only an introduction, so we don't need a whole lot of detail, at least
initially.
And then there's misspelling. When you have spell check, why would there
be a typo on a resume? One that we get a lot is misspelling of Andersen
Consulting, which is a minor thing, but I even get resumes where it's
spelled two different ways. That really indicates a lack of attention to detail.
Q: Besides the interview, are there any other steps in the recruitment
process?
A: Not for consulting positions. For some of our more senior positions,
we will do a bit of a case study, where [an applicant] is presented with a
case and then given a chance to dissect it and present recommendations as if
in a client setting.
Q: What jobs are most in demand at Andersen?
A: They all are. We're in a very fortunate or unfortunate situation where
the business is great, and we're looking for all kinds of skills. If I were to
say which ones were most in demand, it would probably be e-commerce skills,
which is a huge area for Andersen Consulting. I would also say [expertise] in
supply-chain management and customer-relationship management. Those are
probably our biggest areas at the moment.
Q: Is there opportunity for international assignments if one is hired in
the U.S.?
A: Yes. Because we work with clients on a project basis, there is always
the possibility that an individual might be assigned to an international
project. We tend to hire people in the country in which they have work
authorization, but when it comes to scheduling people on client engagements we also look for the best people with the right knowledge. And, in some cases, that may mean going outside the home country.
Q: Can you talk a bit about the corporate culture at Andersen?
A: The consulting business is very, very fast-paced. And [in] the e-economy, speed is what it's all about. [Also,] I think it's very entrepreneurial.
Andersen Consulting not only works with the Fortune 500, but also the Fortune 500 firms of tomorrow, or at least ones that hope to be. And we're doing a lot
of work with very small companies as well.
[Andersen] is focused on building skills, training and equipping people with the knowledge they need to do their jobs. We spend about 6% of our annual revenues on training each year. That's why an attribute of lifelong learning is so important for us, because we invest a lot to try to keep people current.
There are more career opportunities today than there have ever been. Our aspiration is to be a network of businesses that dominates the B2B e-commerce space. [That involves] our traditional consulting work [and] making financial investments in startups, which we do through Andersen Consulting Ventures. [We also have] dot-com launch centers, a network of 22 physical spaces around the world where Andersen Consulting helps post-incubation and pre-IPO businesses get to critical mass through technology, finance knowledge, marketing and branding, and strategic planning.
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