Secrets of an Executive Search Firm

1. Now and Ahead: The State of the Employment Marketplace for Executives

The crunch in the hunt for talent is a function of:

• Sustained economic growth and prosperity — the longest expansion of economic opportunity in several generations.
• The effects of massive consolidation of American business that began in the 1980s and continues to the present with its consequent release of employees due to downsizing and rightsizing.
• The consolidation resulted in massive migration from corporate America into a wide variety of alternatives for earning a living (i.e., self-employment, teaching, non-profits, early retirement, etc.)
• The workforce, freed from constraints of the risk of unemployment, now has a much more mercenary attitude in light of multiple job openings and offers.
• The baby boomers leaving the workplace due to early, semi- or full retirement and entrepreneurial opportunities, after a shorter lifetime in the workplace.

The net effect? We simply do not have adequate numbers of professional and managerial talent to fill their shoes.

One look at demographic trends explains what we are experiencing today may be just the tip of the iceberg. The next generation of workers is smaller in size than the current one, and decreases dramatically after that. Even with the recent liberalization of work rules for seniors and a possible loosening of immigration quotas, the shortfall is not expected to be cured.
Everyone wants to be “safe,” but in an environment of constant change and tremendous challenges, thinking out of the box is a major request.
As we look ahead, the demand for professionals, managers and senior executives will greatly outstrip supply, with the greatest demand for general managers, financial officers, marketing directors and the continuing need for a wide range of talent in information technology.

Already keenly aware how difficult it is to find and secure the talent your company needs to keep pace with normal attrition, let alone grow, HR is continually searching for recruiting solutions to fill positions.

The Executive Hunt
The challenge becomes even more daunting at the executive search firms. Senior management recruiting is different. At this level, the most wanted senior executives are tied up elsewhere, bound by the golden handcuffs of high levels of pure compensation, stock options and other benefits, vested pension plans and vested interests stemming from convenient geographic location, family constraints, and personal quality of life preferences among others.

Those with special skills in information technology, general management, marketing, and finance are in high demand — and they know it. For senior executives, it takes a compelling opportunity to pry them loose from their current positions.

Today’s high-demand executives — the people with proven track records and leadership abilities — come with their own special set of needs. At this point in their careers, they are apt to look long and hard at the company, its place in its industry, strategic growth plans, and the macro-economics of the business.

Smart recruits also evaluate the potential position within the company, its duties, responsibilities, reporting and evaluation measures and opportunities for promotion, even up to the top leadership positions of the company. Some potential hires may also judge the company and package as a springboard to their next career move.

Further, with your most likely executive already fully employed elsewhere and relatively satisfied there, approaching a desired candidate takes a more sophisticated approach for him or her to even entertain the idea instead of rejecting it out of hand.

Normal recruiting techniques, including job postings and looking within the company, may not yield high quality or appropriate candidates. Rather, both creative and targeted recruiting can be more productive in seeking your next executive.
External hires should not be made for quick fixes; there are none.
Given the current difficulties and differences in executive recruiting, the imperative to fill the position goes well beyond “getting a body on board.” In reality, the very future of the company depends on securing the kind of executive and attendant skills who will contribute significantly to its progress.

A new executive hire is (or should be) a strategic hiring decision because that person assumes responsibility for not just the department or division, but contributes to the overall health and well-being of the organization itself. Each new executive, either recruited internally or externally, has an impact, for better or worse.

Therefore, defining just what is needed now and in the next five or ten years, becomes part of HR and the company’s overall strategic planning. Restricting the depth and range of the search for key executives limits, in no small measure, the ultimate strategy and growth of the company. Viewed in the context of broad company strategy, the outcome of each executive recruiting event is critical.

In the following sections, we’ll examine the components of contemporary executive search for success.

2. Qualities in the Executive Candidate: The Universal Wish List

Given the shrinking executive talent pool available, which will only get smaller in the years ahead, HR is under pressure to shift its traditional recruiting approaches. What has worked in the past may not be appropriate in today’s market. First-rate executives are not only unavailable, they are also critical in evaluating new opportunities.

For HR, flexibility, openness and adaptation to new realities are the cornerstones of successful executive searches.

In approaching the senior executive market, bear in mind:

• The income of the nation’s executive corps is rising. Larger numbers are now making in excess of a million a year, but, in many cases, multiples of seven figures on an annual basis. The rise in top tier officers’ salaries and perks has implications all the way through the executive ranks.
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• With the money comes a closer tie of management compensation to results.
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• “Cash now” is still the cornerstone of executive compensation, enhanced dramatically today with stock options and deferred compensation.
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• Signing bonuses are now commonplace not only for senior executives, but also for middle managers and, in many cases, for non-supervisory personnel.
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• With loyalty and supply of quality executives diminishing, the “golden handcuffs” will grow brighter and tighter.

In spite of this tight labor market, the demand for executives and managers increases. Along with it comes the request for certain qualities that organizations have articulated as needs in facing their 21st century issues. In conducting executive searches, the most universally requested qualities from clients are expressed in this “wish list” time and again:

• Global perspective. Candidates must be able to view domestic and international markets and operations in one overall, integrated management pattern.
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• Creativity. Today, it is one of the most sought-after qualities in executive search parameters. And the toughest to define and find. Everyone wants to be “safe,” but in an environment of constant change and tremendous challenges from every direction, creativity — thinking out of the box — is a major request.
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• Leadership. Executives must be leaders in every sense of the word. They must be aware of public opinion and lead it, not simply market products and services to it. This quality also impacts employees, investors and every stakeholder in the company and industry.
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• Visionary. Today’s executives must be able think strategically rather than concentrating on daily operational decision-making.
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• Communicator. Still one of the most important skills current executives lack, effective executives have the ability to communicate and advocate with not only the employees they lead, not only with Wall Street, not only with the customers they serve, but also with the public at large, as well as with special interest groups.

While employment opportunities for professionals, managers and senior executives have never been better, and the demand will continue and accelerate, HR managers have their work cut out for them in seeking solutions to the crunch in executive talent. A thorough knowledge of the options and alternatives help lighten the burden.