Archives for July 2021

As the dire threat of the COVID pandemic came into focus, it seemed reasonable to assume a cold, cleansing wave to sweep through the business leadership class, nature ensuring that not all CEOs were up to the challenge and Boards fearful of what they had.

It didn’t happen. In the U.S., according to the Conference Board, in the first half of 2020 only 71 companies in the Russell 3000 Index (top 3,000 by market cap) announced CEO successions, 11% lower than the average turnover level.

The pace picked up in the second half, ending the year at a “normal” 11.6%.  Seemingly, companies chose to stick with the generals they had at the outset, but thought better of it as the dust started to settle.

Now, after a year and a half of total disruption of the workforce and work patterns, we have a better idea of the where the structure will start to buckle. A new report suggests that a stunning 52% of workers will be looking for new jobs this year.

It is an incredible expectation, but no longer a total surprise. As the pandemic dragged on and most workers were challenged by an upheaval in how and where they worked.  Experts began to recognize this was an insurmountable aggregation of stress and coined the phrase “turnover tsunami”.

With each day, this seems less of an exaggeration, notably because of the diversity of the challenge:

• Many people, possibly most, have found that working at home is extremely stressful. Especially so for women, single parents or young  families with husband and wife both working
• Equally, young upwardly mobile workers especially miss the social input and career opportunities of the office as destination
• For every company that can adjust and benefit economically from a dispersed workforce, there’s another, notably in manufacturing, which MUST restore a common workplace.
• Inevitably, the role of work itself is being questioned.  For some time now, several countries have been addressing the work-life balance, using technology to establish a shorter work week. Spain is the latest country to experiment with a 32-hour week.

Then we have the economics to consider. Many cities witness a daily flood and ebb of 300,000 or more people into the metropolis. Consider the impact on retail merchants or the business of office tower managers and owners, or the transportation planners if that slows to a trickle.

The Big Picture, then, is not much comfort.

So let’s re-focus on the microorganisms supporting all this uncertainty, the actual company workplaces of the world, and you’ll wish you hadn’t. How much of a mess do you think will be left behind if and when we ever do master the scourge of COVID?

Turnover is costly. At the threatened 50+%, it would be devastating. Think about the expensive processes behind recruiting, hiring, and training, the time spent onboarding a new team-member. 

When an employee leaves, you have to re-distribute duties to other team-members who are no doubt  reaching their own tolerance thresholds.  And you lose a valuable resource with possibly years of institutional knowledge.

It would seem the obvious strategy would be to minimize the talent loss to the greatest extent possible.  Which brings us full circle to the issue of leadership – what type of leader is required, where do you find him or her and how do you recognise them.

The Association of Executive Search and Leadership Consultants is the global standard  bearer of quality and ethics in the business of hiring executive talent. (Cornerstone International Group is proud to be a long-standing member.)  Earlier this year, the AESC surveyed its Regional Councils as to the issues dominating their clients’ thinking.

Overwhelmingly, the top issue is hiring leaders who can drive, rather than just ride, this “tsunami of change”.  The report opens up by saying:

“Covid-19 has been a stress test for traditional leadership.  Transformation and the pace of change are no longer new. Leading through transformation at a breakneck pace in the midst of a global pandemic, however, is unprecedented.”

We will be visiting this report in future posts and CIG also plans to survey clients of our 60+ members worldwide. Meanwhile, you can read the AESC report here.  

We are only halfway through what will likely end as the most memorable year in the lives of most people.  It’s hard to think of any confluence of events more potentially disruptive since the Industrial Revolution.

Have you identified the need to fill a critical executive level position…one that will play a key role in facilitating your strategic business objectives? In a highly competitive and dynamic business environment, selecting an executive with the appropriate skills who will contribute as a key team member is crucial. However, finding and recruiting senior level talent is becoming increasingly difficult. 

Given the high cost of a poor hiring decision and the importance and timing of finding the right person, many organizations choose to engage an Executive Search Firm. As a specialized branch of management consulting, Executive Search Firms are experts in assisting clients with the critical and challenging task of bringing top executives into an organization.  

Unfortunately, many organizations fail to properly qualify Executive Search Firms, often with disastrous results. An under-qualified executive could be hired, or a critical position could go unfilled. In both cases, the bottom line will be impacted…either through lost revenue, or the inability to achieve strategic business objectives.  

The following list of questions (and answers) has been developed to assist in the identification and selection of an appropriate Executive Search Firm. A firm/consultant’s responses will allow you to effectively assess their experience, competence and potential to achieve a successful outcome. 

1. What are your firm’s industry focuses – who are some of your current clients?

This determining factor allows an organization to assess a firm’s market and functional knowledge relevant to their specific situation and need.  One must have confidence that the consultant knows where to look for the top talent, and how to engage and recruit them.  This knowledge usually comes from conducting similar searches and understanding the nuances of your particular market.  Confidence that your selected consultant knows the territory will support a cohesive and functional client/consultant relationship throughout the course of the project.

2. Who will be doing the work; how is your firm structured?

Given the consultative nature of search, it is critical to determine how involved and engaged the lead consultant will be during the course of the project. Will the consultant who sells or ‘pitches’ the assignment do the majority of the work?  Is the research and candidate development conducted in-house, or outsourced to a third party?  Does the firm have the appropriate project management and communication tools to ensure timely and accurate feedback?  Who, exactly, will be accountable for your specific project?  It is critical that your choice will be engaged and hands on.

3. How many searches does the consultant handle simultaneously?

Here is a good question to ask as a follow up to the previous discussion.  A consultant handling six or seven projects at one time is average. Once it gets above that number, quality will drop. You need to be comfortable that your project is going to receive the time and attention needed to be a success.  

4. What percentages of searches are successfully completed? Is there a guarantee should the placement fail?

The industry average for completing projects is between 65% and 70%. This is partially a result of cases when specifications and/or business conditions change, organizations restructure, or the skill set you seek does not exist.  While there are many variables that can affect this number, a reliable number should be in the 75% – 90% range.  The key here is to be wary of the firm that tells you that they have a 100% completion rate. This is not realistic!

Most firms offer at least a one-year guarantee to replace a candidate who does not work out for reasons that should have been foreseen (i.e. excluding illness etc.).

5. What are the timing and key milestones of the process?

In most cases, executive level searches take between 90 and 150 days to complete.  Most professional and competent firms/consultants will be able to provide you a well defined and detailed outline of their process and timeline. Typically, you should expect a detailed progress review, including a list of pre-screened and qualified candidate backgrounds between weeks four and six, and begin to see candidates face-to-face between weeks six and eight.  

Note: Since the Covid pandemic, all early-stage and many late-stage intervierws are conducted on line..

6. What are the firms current “off limits,” i.e., where is a firm blocked from recruiting candidates based on existing client relationships?

This is a critical question to ask either large firms with specialty practice groups, or smaller firms focused on specific functions or market sectors.  Firms typically cannot recruit from an existing client for one to two years after an assignment. If a large number of target companies (those where the majority of potential candidates are currently employed) are blocked, your ability to access a strong candidate pool could be severely limited.  

You must also ensure that there is agreement with your chosen firm as to the length of time they may not recruit from your organization. Be careful not to let the fox into the henhouse!

7. How is candidate quality assured? 

The lead consultant needs to have a clear understanding of the performance metrics and evaluation tools that will be used by you and your organization to judge candidates. It is important to have confidence in their abilities to understand both your organization’s culture and the scope and requirements of the position to be filled. 

The search consultant must function as your agent in the market to both engage and recruit the best available talent. They must have the ability to recruit the best candidate for the job, not the best candidate looking for a job. 

8. How and when are references conducted?

This has continually been a key issue and one that is fraught with pitfalls.  Consultants must be able to reach beyond just career history and focus references on discussing competency, character and potential. References should be sequenced into the process. We recommend that at least two are completed before you decide on a final candidate. This will go a long way in eliminating the possibility of costly and potentially embarrassing problems later in the process!  Final references should be checked with a combination of supervisors, peers, and subordinates, and with individuals other than those provided by the candidate. Keep in mind that while you may want to do ‘backdoor’ references yourself, in order to protect a candidate’s privacy, all references should be coordinated through your search consultant.

9. What is the search firm’s role in candidate negotiations and closing?

This is a crucial step, one in which a professional search consultant should be both comfortable and experienced.  He/she must be able to effectively negotiate and communicate with both parties to achieve successful outcomes.

10. What are the fees and expenses?

Retained search firms typically bill between 30% and 33% of a candidate’s first-year total cash compensation, paid in three equal installments over the first three months of a search.  Most firms bill you for all expenses directly attributable to conducting the search, and some firm’s bill for non-itemized, or communication expenses.  Upon request, firms may agree to a flat fee, or a discount based on volume of work.  In some cases, firms will tie the timing of their invoices to their successfully attaining specific stage gates during the search process, including linking a portion of the professional fee to the completion of the assignment.

11. Is the search firm accredited, are a member of an Industry Association?

There are several key industry associations for retained Executive Search Firms, the most visible and important being the AESC (Association of Executive Search and Development Consultants). AESC members comprise an elite group of top-tiered, retained Executive Search Firms.  All members agree to abide by the Association’s Code of Ethics and Professional Practice Guidelines and meet strict membership criteria.  Membership in the AESC is the only form of quality accreditation that exists for retained executive search consulting.

In Conclusion:

Regardless of size and scope, not every firm is perfect for every search. A professional search consultant, whether a member of a firm or a sole practitioner, must provide your organization with the tools, resources, and information to make a knowledge-based decision for the recruitment of superior talent. In order to have the confidence necessary to identify and recruit the best available talent to your team, I encourage all current and potential users of retained executive search, (regardless of pre-established relationships), to evaluate and interview face-to-face a minimum of two firms, prior to making a final selection.

Reliable and non-biased information on search firms (locations, practice specialties, scope of services, etc.) is available at the Association of Executive Search Consultants  www.aesc.org 

We also invite you to learn more about Cornerstone International Group’s Retained Executive Search services.

What once were considered ground rules in both job seeking and recruiting are changing rapidly. As the pace picks up again, both candidates and employers need to examine post-Covid job expectations and recognize that new opportunities have entered the mix. Here are some examples.

1. Should you take the opportunity to change industries?

Sometimes a well-qualified candidate, who is clearly ready to assume greater responsibility, is reticent to change industries or deviate from a traditional career path.

Today there are more compelling reasons than ever for changing industries. These include accelerating your professional development, broadening your skills, adding interesting and accomplished people to your network, increasing employment opportunities going forward, accessing the global world, challenging yourself, and finding greater engagement via pursuit of something you are more passionate about.

Changing industries may benefit a candidate in the following ways:

Allow for More Rapid Professional Growth

Changing industries may allow the candidate to take on more responsibility as a manager and grow his or her salary more quickly than staying in one sector.

Unleash Innovation Potential

When you change industries, you see the possibilities for innovations. Post Covid brings greater expectations Your mind broadens and you can create something new by combining different skills that you have developed from different places. There are many individuals who have found great success by moving from one vertical to another because cross-pollination can lead to greater creativity.

Increase Your Network

When you have moved industries, you will have different connections from different backgrounds. This will increase your reach and help you grow in your future. When you have a good network, you can use it for building a business, for hiring good people, or for finding new opportunities for yourself.

If a candidate has spent significant time in one industry, they may not realize how well their experiences and skills may translate elsewhere. Not every industry is the same. Some industries and companies will value certain skills more highly than others.

Some verticals organize themselves differently and a candidate may be happier in some circumstances than in others. It’s not that the grass is always greener. It’s that we tend to thrive better in a garden than in a forest.

2. Should you consider embarking on a new career?

Over the last decades, having multiple careers within a lifetime has become increasingly common, not just in the U.S. but also in Europe. With technology giving us the ability to work from anywhere (and COVID demonstrating to everyone that this is possible) even more people are now considering a working life that spans multiple careers.

Understanding that you need not follow a single career path can open up new vistas. Creative thinkers have discovered the antidote to boredom, burnout, job insecurity, and many other workplace woes may be “The Slash Effect.”  This is when you move successfully from one career to another, and maybe even to another. You may know of lawyers who became entrepreneurs, journalists who became marketing executives, doctors who became venture capitalists, or CEOs who became teachers. I even know of a pharmaceutical marketer/HR executive/company founder/executive recruiter.

A few things that may help you prepare for your next “slash”:

Use your current career to help you cultivate the skills required for your next one.

Take opportunities provided by your current employer to expand your skills set, be curious about what other departments in your company do and consider taking classes in areas that interest you.

Think about investing

Many people are interested in the investing world regardless of their career. Investing can give you the freedom to pursue other careers smoothly. When you invest, your money works for you so you can work on other things that interest you and you create capital that you can use to start a business.

But understand that if you’ve got household obligations or a family depending on you to be there physically and emotionally, the timing might not be right today. That doesn’t mean that you can’t make plans for a second career later in life. If that’s the case, understand and establish expectancies to work, leisure, finance and health.