Economy Watch: Executive glut

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An island of old economy marketing amid the dot-com boom of the San Francisco Bay area, Clorox Co. became a prime hunting ground for recruiters of marketing talent. Clorox Chairman-CEO Craig Sullivan last year even blamed the dot-com brain drain in part for Clorox's eroding market shares and missed earnings forecasts.

How a year can change things. Since July, Clorox has brought back three marketing executives who had left for dot-coms. Now, mulling a restructuring that could result in yet-to-be-announced layoffs and brand divestitures, Clorox can't accommodate all the former marketing executives who want to return, said a spokesman.

Welcome to the harsh new reality for marketing executives as dot-coms go bust and old economy companies downsize and consolidate. Those who had grown accustomed to their wireless phones playing the siren songs of headhunters are hearing eerie silence instead.

"The world has changed so dramatically," said Barbara Pickens, a recruiter with TMP Worldwide, New York. "Everything seemed so bright, and now it has become so dim. The contrast is so stark."

Ms. Pickens, who specializes in searches for marketing-oriented general managers and has placed executives at companies such as M&M/Mars and H.J. Heinz Co., said she hasn't seen the market so slow in two decades. Even CEOs who leave on good terms after buyouts are having trouble finding new assignments, she said. Recruiters who once speed-dialed their way to riches for themselves and job seekers are instead chatting with each other, comparing notes about how bad things are.

Nearly all industries and levels of marketing feel the impact.

While it's too soon to know how the coming fall recruiting season will go, the University of Michigan MBA and undergraduate business programs are seeing fewer companies recruiting interns this spring, said Jeanne Wilt, associate dean and career development officer. But she said marketers are still honoring generous offers made during a much tighter market last fall, when median salaries plus bonuses for MBAs headed to consumer products companies topped $100,000 for the first time.

Ironically, the recruiting slowdown comes as student interest in marketing jobs with traditional consumer products companies has revived after disillusionment with dot-coms.

Amy Hoover, VP at Atlanta-based recruiting firm Talent Zoo, said she's been getting calls from uneasy marketing executives since the beginning of the year. "It's not just midlevel people or kids," she said. "It's director level [people who have] six-figure salaries."


Younger marketers, however, are having a harder time coping, she said. "Their whole working career has been with everyone riding high. They're not accustomed to being laid off and not seeing the possibilities out there."

On the positive side, many companies are simply putting searches for marketing executives on hold four to eight weeks rather than canceling them, indicating that they still entertain hopes for a second-half rebound, said David Wiser, president of Wiser Partners, a Cincinnati recruiting firm. "It could look incredibly different come summer," he said, adding that he's advising many job seekers to wait rather than jump at offers that don't meet their objectives.

But restructurings and consolidations in package-goods have created a glut of marketing executives, and many have yet to come to terms with their lower status in the current market, said Ann Badanes, a recruiter with Cincinnati's Satterfield Associates. "I think everybody's sense of their value might be a little inflated relative to the market right now."

One former food industry executive and veteran of VP-marketing positions at two dot-coms who has been out of work for about two months acknowledged a dramatic shift in his prospects compared to last year.

"I've established what I'm looking for, and at this point I'm not willing to bend," he said. "It's much easier with a short time passed to stick to those standards. But I know a lot of people out of work longer than that, and they may be a little more eager than I am at this point."

So far, he's resisted what job-seekers and recruiters identify as one relative bright spot of opportunity-business-to-business technology companies, that are still hiring marketing executives despite the slowdown in capital spending.

"Our business has never been better," said John Kuklinski, another recruiter with Satterfield, which is filling marketing and sales positions with b-to-b companies he said are having no trouble attracting venture capital.

But technology companies appear to be getting more demanding in a buyers' market. David Olsen, former president-North America and Mexico of Drypers Corp., who sought a VP-marketing position with a technology company after Drypers filed for bankruptcy this year, found his search harder than expected, though he took a position as VP-business development with enterprise software marketer i2 Technologies in March.

"It's a square peg in a square hole market," Mr. Olsen said. "Switching industries or into something not directly in your experience is difficult."

Moreover, employers and recruiters in general appear to be getting choosier. Chad Dick, senior manager of the Aquafina bottled water business, who himself moved to PepsiCo in November from Campbell Soup Co. after passing on opportunities at some other companies that are no longer in business, said that now, when recruiters contact him, they ask for reference information on candidates they already have rather than referrals to new ones. "They probably have more candidates on their hands, and they're trying to weed through them to pick the one or two winners," he said.

Not all recruiters are buying the gloom and doom. Alex Rodriguez, president of Santa Barbara, Calif.-based Diversity Consulting Group, which is both a multicultural marketing consultant and recruiter of Hispanic marketing executives, points out that even as the Walt Disney Co. announced 4,000 layoffs in March, its corporate Web site listed 35 marketing-related job openings. He suspects some companies are announcing fat layoffs to placate analysts and investors.

But the rash of consolidations and softening market does appear to have a tangible silver lining for some companies hiring marketers.

The newly formed Spic and Span Co., created when the investment firm the Shansby Group bought Procter & Gamble Co.'s Spic and Span and Cinch cleaning brands in January, didn't have to piece together a management team. It just installed one from the Block Drug Co., which was sold to SmithKline Beecham last year, recruiting President-CEO Peter Mann and VP-Marketing Charlie Shrank into the new company.

"The consolidation of these big companies does create an interesting problem," said Gary Shansby, managing partner of the investment firm. "They end up with twice as many people as they need in some cases, and they have to make a choice." With stock in many startups having become nearly worthless, executives are viewing equity in private companies like those created by Mr. Shansby more favorably, he added.

But he said the get-rich-quick mentality of some former dot-com executives makes them less appealing to startup companies like his. "Those kinds of people who were moving that quickly-we wouldn't want to bring them into our kind of businesses where it's about building and growing."


For Jim Wolfe, who returned to Clorox as marketing director after a whirlwind year at a dot-com, his journey wasn't about getting rich, though it was quick. He left Clorox in June 1999 to become a marketing director at, was promoted to VP-marketing when the former Clorox executive who recruited him moved on, then returned to Clorox as marketing director about a year later to escape what he describes as management chaos, cuts in marketing budgets and 80-hour work weeks. His July return couldn't have been better timed, since Autoweb announced plans to lay off 25% of its staff a few months after he left and now faces possible delisting by the Nasdaq market, with its stock closing at 25› April 6.

"I feel very good about my decision to [come back]. It's still a challenging environment, but it's not the mania that was going on [at Autoweb]," Mr. Wolfe said.

Contributing: Hillary Chura

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