Small business: SkyWater Search Partners

SkyWater Search Partners, an executive recruiting firm with roots in what was the Twin Cities largest such firm, touts its "shortlist" approach, with a goal of presenting clients no more than five "best choice" candidates they could hire immediately.

SkyWater's leaders said they're just as selective in their own hiring. SkyWater founder and partner Kurt Rakos said that means focusing on bringing aboard industry newcomers, even right out of college.

Rakos and SkyWater partners and founders Paul Beard and Tony Fornetti said they're looking for candidates with characteristics such as having a high GPA and a competitive sports backgrounds, who will fit the company's "work hard, play hard, give back" culture and whom they can teach the company's way of recruiting.

"We have to practice what we preach," Rakos said. "We have to hire the type of people that we would want our clients to hire. If we continue that, the rest will take care of itself."

"It's a long-term investment but it's proven to work very well for us," Rakos said.

SkyWater is a hybrid firm, doing both contingent fee and retained searches for mid-level to executive-level positions in accounting and finance, information technology, sales, marketing, engineering, human resources and consumer packaged goods. Clients range from early growth-stage companies to Fortune 500 companies. This year SkyWater expects a 30 percent increase in its 2013 revenue of $3.2 million, Fornetti said.

SkyWater launched in January 2013 as one of two firms emerging from the amicable split of the founders of McKinley Group Inc., which had been in business for a dozen years and reigned as the largest Twin Cities executive recruiting firm. The other firm, Versique Executive Search & Consulting, is headed by McKinley Group co-founders Tony Sorensen and Chris Ohlendorf.

SkyWater has seven of the previous firm's top producers, Beard said, three of its four managing directors and deep executive search experience, with employees who accompanied them from the previous firm averaging almost a decade in the business.

The firm, which has 22 employees after hiring five in 2013, was profitable by the second quarter of last year, only its second in business. The firm's emphasis on culture and its transparency in making the transition to the SkyWater brand, Beard said, contributed to its recognition as a best place to work in a local publication's yearly survey just six months into SkyWater's first year.

"I would describe it as a well-funded start-up company but in an industry that we knew," Rakos said, but one with clients and a revenue stream developed at the previous firm.

One of the more pressing challenges was developing the SkyWater name, Rakos said. Looking for something with local flavor, Fornetti suggested SkyWater, based on the Dakota Sioux words "minne" and "sota," which mean "sky-tinted water." "We wanted something that was easy to remember, easy to pronounce and easy to spell," Rakos said.

As the economy rebounds, companies in most practice areas are hiring, Beard said, adding that the fourth quarter of 2013 "marked the second-largest quarter of personal production I've ever had since getting into the business in 1991. If the market wasn't hiring, firms like ours wouldn't be making money."

"Paul was really good at digging into my background, what I was looking for and what I was good at," Woodhead said. "Then he paired me up with a company he knew of that fit my skill set. It's been a wonderful match."

Scott Fazio, vice president of human resources at Osseo-based Cornelius, a Berkshire Hathaway company, said he appreciated Beard's personal attention to his search needs.

"With SkyWater, you know that Paul's working personally on the search," Fazio said.

The expert says: Mike Harvath, CEO of Bloomington-based growth-strategy advisory firm Revenue Rocket Consulting Group, worked with McKinley Group before the split, which he said has worked well both for SkyWater and Versique and perhaps positioned each for greater success than had they not parted ways.

"I'm very impressed to see the speed at which SkyWater has built its business," Harvath said. "I would expect them to be a considerable force in executive recruiting in Minnesota as they continue to grow the firm."