The Toy Industry – Jobs, Jobs, Jobs

By Lutz Muller
May 2013

Execunet, which is basically a job board for senior executives, saw a clear improvement in the number of high-level management jobs in the most recent years. In their 2012 Executive Job Market Intelligence Report, they paint this picture:

If you drill further down into these numbers, you will see that not all industries have benefited equally. The winners are high-tech management jobs in the consumer electronics industry, financial services and health-related companies. The losers are basic manufacturing industries, retail and legal services.

What about the toy industry? In short – difficult.

One factor is that virtually all manufacturing is done in China, so those management jobs have literally gone East. The second factor is that the business in the U.S. has been as flat as a pancake for nearly a decade and the large toy companies such as Hasbro are cutting jobs big time. The third is that any real opportunities for a high-level job are where the growth is – Russia, Brazil, China, India – which effectively excludes the mainstream executive living in New Jersey or California.

Yes, there are jobs out there for good toy executives. One that is going right now is the CEO position at ToysRUs to replace Jerry Storch in that role. There is the newly created position of Vice President of E-Commerce at MGA Entertainment – the makers of the Bratz fashion dolls. There are many others but they are typically not advertised.

So what is this Mr. Joe or Ms. Joan to do if he or she wants to land an executive job with a toy manufacturer? To find out, I spoke to three industry insiders. One is Michael Araten, the CEO of K’Nex (the only toy company still making the vast majority of their toys in the United States); the second is David Fitzgibbons, Headhunter extraordinaire and owner of the Toy Recruiter; and the third one the CEO of a large toy manufacturer who did not want to be identified but whom I will in this article call “Toy Chief”.

This is what Michael Araten said:
“We have acquired talent over the years both using and not using services of a recruiting firm. We prefer to use our network of contacts first as we believe that personal recommendations are the biggest indicators of talent. We then use recruiting firms as a fail safe should out network not produce the results we seek.”

What he is really saying is that you have two choices. One is to make yourself so visible within the toy industry that anybody looking for a senior-level candidate already knows of you and is likely to contact you; or to work with a executive recruiter in the hope that he can be the conduit between you and the job you crave. While the first alternative is easy to understand but difficult to achieve, the second is easy to achieve but difficult to understand.

To bring some clarity into the mandates that govern the relationship between the candidate and the headhunter on one side, and the headhunter and the employer on the other, I asked David Fitzgibbons to comment on the misconceptions he sees in the relationship between the candidate and the headhunter. I then turned around and asked the “Toy Chief”, as the employer, to give his perspective on the same issues.

Firstly, what is the role of the Executive Recruiter?

David: Recruiters are here to find jobs for me! Actually it is the other way around. It's a subtle but important nuance. Recruiters are hired by a company to find a very specific person for that client company. Recruiters are NOT here to find you a job. I find that confuses people because someone always says to me, "If you are a recruiter, why don't you find me a job?"

Toy Chief: The headhunter’s job is first and foremost to understand what my needs are. He must make the effort to acquaint himself with the culture of the company, the types of people the candidate will interact with, and of course the bedrock requirements of the position itself. Once he, the headhunter, really knows who we are and what we do, then he is ready to go out and do his search. His job is, very simply, to find the person who seamlessly fits into vacant position.

Secondly, how difficult is it to become an executive recruiter?

David: Recruiting is an art, not a science and it doesn't require a Harvard education to be successful. Integrity and tenacity are the key attributes to success. When I got into the toy industry I realized my main competition was lazy because they had cornered the recruiting market and had very little competition. They used to send a hundred resumes to the client and say, "Let me know which person you hired". They didn't add value and they weren’t innovative. I felt they were more interested in enriching themselves then to enrich the lives of others.

I knew it would be very easy to differentiate myself from them by offering real recruiting solutions, innovative pricing strategies (and no, not charging less, but real innovation pricing), being transparent in the process and always putting the best interest of the client and candidate before my own. A woman once said, "Be aware that someone younger is always going to come in and disrupt the marketplace". I disrupted the marketplace and I know someone younger will come in and disrupt it on me. I just hope they come in with integrity and professionalism.

As to recruiting being easy...well, if it was easy everyone would do it. Nothing in business is easy these days, especially recruiting. For me however, I have an unbridled love and passion for the art of recruiting so for me, recruiting is easy...and fun and interpersonally rewarding. Recruiting is the greatest profession there is and I am proud to call myself a recruiter.

Toy Chief: It is very easy. All you need is an incredibly thorough understanding of the industry in which you operate; a knowledge of all the major and not so major players in it and insight into their strength and weaknesses, their successes and their failures, their personality quirks and their biases. Once you have that, all you need to get is a track record that demonstrates that you are in fact superb at your job and can deliver what your clients need. A piece of cake and should not take more than a couple of decades of backbreaking work around the clock.

Thirdly, how good are headhunters in their job?

David: Recruiters, like lawyers and car salesmen, often get a bad rap. That is because, like lawyers and car salesmen, there are so many bad ones. That is correct, there are bad recruiters. There are recruiters that are bad at their job (they usually don't last long) and there are those who are bad people and, just like lawyers and car salesmen, they make a career out of being a bad person. I don't understand why companies or candidates (that's industry speak for people looking for work) work with jerks but they do. I assume it is low self-esteem that keeps people working with jerks. It does appear that you can be a successful recruiter and be a huge jerk (I think we all know at least one) but it isn't the way I run my business.

Toy Chief: To become a headhunter is the easiest thing in the world. You need no certificate, no degree, no track record. All you need to do is call yourself a recruiter and put this on your name card and on to a website and presto, there you are. Whenever I have an open position, I get literally tens of emails and phone calls daily from recruiters and I my question is always the same - where did you last place a candidate, which company, what position? And if the response is halfway acceptable, I get one of my people to check it out. Sadly, in nine out of ten cases, it is all smoke and mirrors. No substance. Yes, I do work with recruiters but only those that either have done a good job for me before or who demonstrate a track record that is worth looking at. A candidate should do exactly the same if approached by an executive recruiter.

Fourthly, are headhunters expensive?

David: Recruiters are expensive and add to the cost of hire. So why use them? It's akin to having a leaky pipe in your home. You do everything you can before you call the plumber because he is expensive. He is expensive because he fixes the problem accurately and quickly; it is the same with a lawyer. My IP attorney told me most of his business is fixing patents and trademarks that people submitted themselves. If you want it done right; call a professional.

Recently, a client of mine searched for 3 months and reviewed 200 resumes before calling me. I submitted 3 resumes in a few weeks and they hired one of those individuals. They invested (wasted) untold man-hours on the search as well as opportunity costs (it was a sales position) before contacting me so I likely saved them money, as they were able to get that sales person on board and get her working fast. If the search were easy, I wouldn't get the assignment. You can assume if a recruiter is working a search assignment, it is a relatively complicated hire and they earned their fee.

Toy Chief: There are two types of recruiters – those that work on Contingency (they are only paid if their candidate is hired and then are paid a percentage of the first year’s salary) or Retained (they are paid a fee which is typically a percentage of the first yearly salary of the position to be filled, regardless of whether their candidate is finally hired).

Top rated recruiters are typically on a retainer. The percentage in either case can range from 25% to 50% of the first year’s pay. You would pick a retained recruiter if time is of the essence and you are convinced that the recruiter knows all the top talent that is out there, regardless of whether they are in fact actively looking for a job or not. It is then the retained recruiter’s task to identify this man or woman and to get him or her to the point where he or she becomes an active candidate.

You would go the Contingency route if you want several recruiters to do the search for the ideal candidate on the premise that this increases your chances or shortens the time needed to find the right person without adding to the cost of the exercise. In my experience, Contingency recruiters will never drill quite as deep to find “hidden” candidates – those that would be ideal but are quite happy where they are – and will typically select from the pool of people whom they know and who, in their opinion, are suitable for the job. In either case, any headhunter who finds the “right” candidate is cheap at the price.

Finally, I asked the question to what extent the executive recruiter and the hiring company should include the human element into the search process.

David: Everybody on this planet is "in it for themselves" insofar as they desire to be successful and make money; this shouldn't be news to anyone. A good recruiter however DOES care about you. Read my Testimonials and you'll find people who I told to "walk away" from an offer or "do what was best for them and their family." Just like anyone you interface with, make sure they have your best interest at heart and not their own. Selfish, self-serving recruiters are EASY to spot. Stay away from them.

Toy Chief: At the end of the day, you do not have a good candidate unless personal needs and circumstances are a good fit with what you offer. He or she may work for you sixty hours a week but the remaining 100 hours are with his or her family. For example, if the job requires relocation and the family hates the new place, you and the candidate are in trouble regardless how good the professional fit is. In short, the candidate must not only be the right person for the job, the job must also be right for the person and his or her family.

And, finally, the job interview:

Good luck!