Bernard Hodes Group Inc.

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Bernard Hodes Group Inc.

220 42nd Street
New York, New York 10017-5806
U.S.A.
Telephone: (212) 999-9000
Toll Free: (888) 438-9911
Fax: (646) 658-0383
Web site: http://www.hodes.com

Wholly Owned Subsidiary of Omnicom Group Inc.
Incorporated: 1970 as Bernard Hodes Advertising
Employees: 700
Sales: $568 million (2004 est.)
NAIC: 541810 Advertising Agencies

Part of the media conglomerate Omnicom Media Group, Bernard Hodes Group Inc. bills itself as a fully integrated talent solutions provider. In short, the New York City-based marketing communications firm helps clients in virtually every industry to recruit and keep talented employees. Hodes also helps them develop an online recruiting strategy, from web site design and the creation of Internet job postings to the use of resume mining to find potential employees. Another core competency is Hiring Process Re-Engineering, which includes such services as hiring process training, employee assessments, posthire interviews, offer rejected interviews, exit interviews, and a mystery shopper service that has “undercover applicants” take a hard look at a company’s recruitment process. In addition Hodes helps in the recruitment and retention of minorities and women to create a diverse workforce. Hodes maintains about 80 offices around the world, including branches in France and the United Kingdom to cover Europe, and Hong Kong and Singapore for Asian business. Domestic offices include Atlanta, Boston, Chicago, Denver, Los Angeles, Miami, Palo Alto, Philadelphia, Phoenix, Seattle, and Washington, D.C.

FOUNDER NEW JERSEY–BORN: 1931

The founder of Bernard Hodes Group was Bernard S. Hodes, born in Newark, New Jersey, in 1931. He began his advertising career in 1954, the same year he entered college at New York University. While still in school he went to work for Equity Advertising, a company that focused on classified advertising. At his next job Hodes became involved in recruitment advertising. In the late 1950s, at the age of 28, he used the experience he received to start his own agency specializing in recruitment advertising, the seed money provided by a loan from his father-in-law. Problems in his marriage, however, led to divorce proceedings about three years later and a demand for the loan to be repaid. As a result Hodes was forced to give up his freedom and work under the auspices of other New York ad agencies. Some eight years later, in 1970, Hodes took himself on as a client, placing a classified ad in the New York Times that stated a young entrepreneur with $1 million in billings was looking for financial backing to set up his own agency or at the very least establish a separate division at another firm. His ad produced the desired effect. The Kansas City, Missouri-based ad agency, Barrickman Advertising, which maintained a New York office, agreed to take a half-interest in the new firm, Bernard Hodes Advertising.

After Hodes relaunched his business as a one-man shop in 1970, the year from which the present-day Bernard Hodes Group traces its history, he quickly began to bring changes to the help-wanted advertising field, applying branding techniques like any other products being sold to the public. His goal was not to help companies recruit among the ranks of the unemployed. Rather, he wanted to catch the attention of people who already had positions, talented people that his clients wanted to find and lure away. Because people with jobs did not generally spend times reading “Help Wanted” ads, Hodes looked for other ways to catch the attention of his clients’ target group. He ran display ads, which stood out from the usual classified ads. If he had to contend with a one-newspaper city that did not accept recruiting ads, he took out a classified ad and then ran television commercials to direct potential candidates to it. In addition to recruitment advertising, Hodes also became involved in the production of films for employee orientation and employee communications services. What provided the biggest boost to the firm’s business, however, were the affirmative action programs required by the federal and state governments that grew out of the civil rights movement of the 1960s. To reach qualified minority candidates, employers, whether in the public or private sector, turned to advertising, a practice that favored an established agency such as Hodes Advertising. Hence, the roots of the Bernard Hodes Group Diversity Services can be traced to the firm’s 1970 launch.

HODES GOES INTERNATIONAL: 1978

Hodes Advertising began expanding to other cities, adding a second office in Chicago in 1974. The firm became international in 1978 with the opening of a branch office in London in the United Kingdom. By the end of the 1970s Hodes Advertising had offices in a dozen cities to serve some 1,500 clients, resulting in about $75 million in billings. The client list was wide ranging, including aerospace and defense contractors such as Hughes Aircraft, which provided $5 million in business, and Martin Marietta, accounting for another $2.5 million. Hodes Advertising also served such major corporations as Xerox, Seagram, and Citibank, as well as smaller local accounts, such as Lenox Hill and Mount Sinai hospitals in New York and the New York Police Department.

The recruitment advertising niche was performing so well that it caught the attention of major advertising agencies, which were in the market to acquire these shops as a way to gain diversity without venturing outside of the advertising field. First J. Walter Thompson acquired the Worldwide agency, then in early 1980 Doyle Dane Bernbach (DDB) acquired both Hodes Advertising and its half-owner, Barrickman Advertising.

Bernard Hodes remained president and continued to run the firm he founded. Little changed as he continued to develop more effective, cost-efficient ways to recruit new employees for his clients, forever seeking ways to reduce the “cost per hire,” the most important metric in the field. The firm also continued to expand geographically. In 1980 Hodes Advertising opened a Toronto office to begin doing business in Canada.

The financial backing of DDB helped Hodes Advertising to add new capabilities in the early 1980s. It published the first Hodes Recruitment Directory in 1982. As the Directory grew, it became an important resource for human resource personnel across the country. It provided them with a wide variety of market and media data for North America’s top cities, including labor force statistics, salary information for nearly 800 occupations, and information on local newspapers, radio and television stations, and area colleges and universities. Another significant addition to what it had to offer clients came in 1984 when the Houston office launched Recruitment Enhancement Services (RES), pioneering the concept of recruitment outsourcing and applicant management. A year later, in 1985, Hodes Advertising picked up DDB Telephone Marketing Services, a Yellow Pages advertising specialty firm.

COMPANY PERSPECTIVES

At Hodes, we have a name for what we do: integrated talent solutions. But our clients simply know it as services to find and keep the best candidates. As strategies that start with research and discovery.

While Hodes Advertising was enjoying strong growth in the 1980s, the same could not be said about its corporate parent. After the death of its charismatic leader, William Bernbach, who died of leukemia in 1982, DDB suffered from a lack of leadership and the business quickly deteriorated, as the agency experienced the defection of a string of high-profile accounts. Losing money and forced to lay off staff in 1986, DDB welcomed a chance to merge with a pair of old-line advertising agencies, Needham Harper Worldwide, and Batten, Barton Durstine & Osborn (BBDO). Like DDB, Needham was struggling, having lost a pair of major accounts, McDonald’s and Xerox. BBDO was doing well, but it viewed a merger with DDB and Needham as a way to stimulate international expansion, especially in Canada, the United Kingdom, and France. Thus, in 1986 the three agencies combined to create Omnicom Group Inc., and Hodes Advertising found itself a part of a much larger holding company.

By the end of the 1980s Hodes Advertising posted sales of $280 million. As it entered the 1990s, the firm continued to expand around the world. In 1990 it opened an office in Folsom, California, near Sacramento, to serve an area that included Modesto, Stockton, Davis, Fairfield, and Reno, Nevada. Two years later, the firm began operating in the Pacific Rim, opening an office in Southeast Asia. By 1995 Hodes Advertising would have 27 offices in North America, nine in the United Kingdom, and five in Australia and Southeast Asia.

In 1990 Hodes Advertising became the first agency to form a separate Diversity division, an outgrowth of its longstanding work in helping clients establish and run minority hiring programs. Yet even while the firm continued to expand in a traditional manner, there was a new medium taking shape that would change the complexion of employment recruitment. It was the Internet, and Hodes Advertising, always an innovator in finding ways to reach job candidates, whether it was running television ads or plastering billboards, was quick to exploit this new way to communicate with people.

INTERNET PIONEER: 1994

The Internet had been around in rudimentary stages for decades and took shape in the early 1980s. However, few people had modems to connect to the Internet and once they did, they needed to know an arcane set of commands to navigate their way around. The World Wide Web project was launched in the early 1990s and Web browsers were developed to provide a graphic interface with the Web and allow users to point and click with a computer mouse rather than type in commands. The most successful early effort was the Mosaic Web Browser, developed at the University of Illinois at Urbana-Champaign and released for public use in 1993. Just a year later Hodes Advertising launched the Internet’s first employment site, which took the name CareerMosaic, described at the time by the agency as “an employment and career shopping mall.” As expected, the first clients to post information about their companies to attract job hunters were high-tech firms, including Sun Microsystems, National Semiconductor, Seagate, Symantec, and Intel, because the kind of applicants they were looking for were early adopters of technology and more likely than most people to have Internet access at this early stage. Within a year Career-Mosaic had 200 companies using its site to place job listings or even link to a home page, and it was receiving about 400,000 visits each month. As home computers became widespread and more people ventured onto the Web, however, CareerMosaic attracted a broad range of industries and job seekers.

Hodes Advertising continued to build on its capabilities in the second half of the 1990s. It launched a Health Care division in 1995 to specialize in a fast-growing field. Then in 1999 the firm added to its Internet offerings by establishing Hodes Research Online to provide human resource professionals with web-based primary research that could be customized, such as surveys for job applicants and employees for purposes of retention. In addition the research unit helped clients in setting up focus groups to measure performance of their programs, and provide them with information on how they were perceived in the marketplace and by potential job candidates.

Because the company had ventured well beyond the realm of recruitment advertising, it changed its name to Bernard Hodes Group in 2000. Other changes were also in the works. At the end of 2001 Bernard Hodes, at the age of 69, retired as president and chief executive. His replacement was 53-year-old Alan V. Schwartz, who had been with the company since 1981 when he became chief financial officer. He later became chief operating officer.

KEY DATES

1970:: Company is founded as Bernard Hodes Advertising.
1974:: First branch office is opened in Chicago.
1978:: London office is opened.
1980:: Company is sold to Doyle Dane Bernbach.
1994:: CareerMosaic, an Internet employment site, is launched.
2000:: Company’s name is changed to Bernard Hodes Group.
2002:: Bernard Hodes retires.

In the final months of Hodes’ tenure, the agency introduced an applicant tracking system, Hodes iQ, and the Hodes Recruitment Directory was made available online. The recruitment marketing unit of interactive specialist CW/Rampage was also acquired in 2001, beefing up Hodes’ Florida business and giving the agency more than 70 offices and affiliates around the world.

Under Schwartz’s guidance the agency continued to build on its strengths. Hodes iQ was enhanced in 2003 with the addition of resume-extracting software that allowed all resume formats to be recognized in electronic recruiting systems. A year later advanced data-mining tools were introduced under the name, “Hodes Talent Scout,” to help employers better locate possible candidates through a computer search of resumes. In 2005 Hodes added an affiliate in Brazil, São Paulo-based Central de Propaganda, to strengthen the firm’s presence in South America. A year later Hodes opened an office in Shanghai, China. Also in 2006 Hodes unveiled a new online tool for recruiters, SmartPost, which allowed employers to post jobs to a wide variety of niche, diversity, local, association, and general job boards with a single mouse click. In addition, SmartPost allowed its users to determined the effectiveness of each of the job boards. In 2007 Hodes forged an alliance with AfterCollege, making the largest career network (about 2 million people) specializing in recruitment at the college and alumni level available to users of SmartPost.