Movement of leaders creates competition in the executive search market
Boards and search committees are moving forward at warp speed. For some, this movement means expanding the C-suite to include a chief innovation officer, experience officer, transformation officer, diversity officer or other new senior leadership positions. To fill these and the traditional C-suite roles, search teams face significantly more competition for talent than in the recent past, because of executive retirements and voluntary job changes at the executive level.
It is no surprise, then, that "attracting and retaining a competitive workforce" is employers' number one HR and operational priority, according to the People & Organizational Wellbeing report in Gallagher's 2021 Workforce Trends Report Series.
The need for speed and agility
Speed is an essential factor of success in today's talent market. In our experience, the most significant barrier to speed is a lack of agility. Corporate agility — nimble anticipation of and response to change — allows organizations to address disruptors, overcome obstacles and act on new opportunities. Agility provides a competitive advantage, especially when hiring executive talent. In the current talent market, preferred candidates field multiple offers. Organizations seeking the best candidates must act quickly in the decision-making process — including extending an offer and responding to a candidate's requests or inquiries. Organizations that cannot move swiftly will lose top candidates to competing organizations.
Executive candidates own the driver's seat. Organizations must remain flexible regarding the total compensation package, career progression and, more recently, a candidate's preferences related to lifestyle — including the ability to live and work remotely.
Proactively consider your policy for leaders working remotely
We advise organizations to consider their positions on remote leadership at the onset of their executive search. Uncertainty on this or other policies associated with C-suite positions slows down the search and hiring process, putting the organization at risk of losing a good candidate. It is common for a company to begin its search with a firm position on remote work; but, as additional internal stakeholders engage in the process, that position starts to shift. The result is the need for extra time to sort out the organization's stance among the stakeholders. We encourage a flexible remote work policy to attract the broadest range of qualified candidates.
Recruit the family
When companies require relocation, successful organizations in the competition for talent respond proactively and creatively in recruiting the candidate's family. Smart hiring committees will bring in the entire family in the hope of generating excitement about area schools and community amenities. Some organizations will go to extra lengths to overcome family objections, such as helping to secure employment for a spouse.
Although it is not possible to determine in advance the specific actions a company must take to secure a top-pick candidate, we encourage organizations to discuss costs they are prepared to incur, if necessary, to overcome family relocation hesitancy. Developing parameters proactively allows the process to move forward with minimal delays.
In instances where candidates will not relocate their families immediately, we encourage organizations to explore temporary housing options. Consider the scenario of a candidate with a teenager about to begin the senior year of high school. This individual may be willing to move in a year, but not to uproot the child at this time. A one-year corporate housing plan and travel stipend may secure a top-pick hire.
We advise organizations to devise a recruitment strategy in advance of beginning an executive search. The discussion should consider potential relocation objections and how to best counter those objections, including flexibility in current policies related to executive talent. Having this conversation before the search begins enables organizations to make an offer tailored to the top candidate's interests and act quickly during any negotiations.
Executive search best practices: quality, speed, value
Choosing an executive search firm best suited to senior leadership hiring needs requires a basic understanding of the executive search industry and broadly recognized industry best practices. In our experience, quality, speed and value represent three core tenets of a successful search strategy.
The goal of an executive search is to identify candidates who meet the position's criteria, including skill set and cultural fit. The best outcomes occur when the executive search firm has experience and expertise in talent placement, understands the client's industry and organization and takes a consultative approach to identify and attract talent.
Matching candidates to a position requires a carefully crafted job description, including a process to identify qualified candidates currently not active in the job market, as well as the ability to assess whether the potential candidate has what the client is looking for. Experience and expertise in these areas ensure a pool of quality candidates and eliminate wasting the time of executives who are not a good fit.
Like hiring organizations, executive search firms had to learn to function in a virtual environment. The best executive search firms are adept at assessing a candidate effectively without face-to-face interaction. The rapid pace of hiring means top candidates will not be available in the market for long. Therefore, successful search firms focus on speed and agility, while counseling their clients to do the same. Factors that add momentum to the executive search process include efficiency, timely communication and leveraging a broad network.
The definition of value differs depending on the client organization. Clients may define value as success in placing the right candidate or by the cost of failure to place the right candidate — or both. By some estimates, the price of a bad executive hire can equate to 2.5 times the salary of the person hired, and the average cost of a bad leader hire reaches 30% of the employee's first-year earnings. These figures do not take into consideration the cost of lost productivity or impact on the culture.
Hiring committees should have a conversation with a prospective executive search firm to discuss what constitutes value for the organization and their priorities for the search process. For example, hiring speed may represent value for an organization that unexpectedly lost a key executive in the middle of a big project. High emotional intelligence may represent the highest value for an organization with a history of discord in the C‑suite. Whatever the value proposition, the outcome will be more successful if both parties communicate their expectations and reach a consensus on the executive search process.
Look for a consultative partner
A consulting versus a recruiting mindset emphasizes building candidate relationships, regular communication and feedback, and creating a positive experience for all stakeholders. Such an approach brings significant value to the search process by helping to build trust among the executive search firm, the hiring organization and prospective candidates. Candidates who do not make the final cut should walk away from the process with a positive view of the hiring organization.
Given the heightened competition for executive talent in today's market, we have seen an uptick in organizations turning to executive search firms to manage searches for C-suite positions. The short- and long-term costs of a poor hiring decision can more than offset the perceived cost savings of managing a key leadership search in-house.
Contact Gallagher Executive Search and Leadership Advisors to discuss your executive search needs. Our team of experts can identify and attract a slate of qualified executive candidates to help your organization better face the future with confidence.