RecruitSmart Today
A bi-weekly source of market intelligence and insight that executive-level recruiters in the corporate and search firm environments leverage to advance best practices in executive talent management.
Shaped by the voice and perspective of our widely respected industry analyst, Joseph Daniel McCool, RecruitSmart Today delivers trend and data analysis that you can use to benchmark best practices in executive-level recruiting, retention, compensation, and other key human capital functions.
We're confident that once you realize the value of RecruitSmart Today, you'll find reason to leverage the exclusive, members-only ExecuNet resources that other executive-level recruiters are leveraging to boost their human capital advantage. Whether it's our exclusive job posting, candidate search, and networking resources, or the periodic RecruitSmart Insider intelligence briefings available only to our members, you'll soon discover how ExecuNet members are keeping pace with the issues, trends and data that are driving executive talent management.
"We learn something every day, and lots of times it's that what we learned the day before was wrong."
— William E. Vaughan (1910–1977) retired American collegiate basketball coach, Hall of Famer
ExecuNet Exclusive: Executive Job Creation Softens But Remains Steady
Executive job creation remains positive as recruiter confidence comes off recent highs and companies indicate plans to add leadership jobs and hire cautiously in the coming six months. Meanwhile, recruiter confidence has dipped from the highs posted in January. ExecuNet's most recent February poll of 183 executive recruiters found 53 percent are "confident" or "very confident" the executive employment market will improve during the next six months. In January, the confidence index had reached an 18-month high of 64 percent. "That the Recruiter Confidence Index remains above the critical 50-percent level is generally good news for the economy and the executive employment market over the next six months," says Mark Anderson, President and Chief Economist of ExecuNet. "This economy, however challenged, continues to create far more executive jobs than it did a year ago," Anderson notes. "As in past recovery periods, the economy and corporate hiring will cautiously test the waters before moving steadily upward."
Recruiter Confidence In Executive Employment Market — Next Six Months
Source: ExecuNet
Executive Compensation Trends As We Move From Recession To Recovery
Corporate business results in the fourth quarter of 2009 may have increased executive bonus pools payable in the coming weeks and months, but don't expect executive compensation to snap back to pre-recession levels anytime soon.
"What we're seeing right now is some improvement around conditions that impact employee pay," says Thomas V. Burke, director of compensation consulting services in the Pittsburgh office of Buck Consultants, who spoke with ExecuNet RecruitSmart members during a recent conference call. He cites examples such as the continued thawing of pay freezes, increased bonus pools and improved corporate earnings.
Burke says "Actually, most organizations, upwards of 60 percent are reporting they're paying out bonuses in the first quarter of this year, based on calendar year 2009 performance." Most of those tally within five percentage points up or down from bonuses paid around this time last year, he adds.
Many companies, Burke says, are looking for an opportunity to pay those top performers who've really helped them weather the economic storm. "You might see more bonuses paid to these top performers, because companies might be more hesitant to commit to significant increases in executive salaries," he notes.
The challenge for many companies looking ahead, Burke adds, is just how to balance compensation against high workplace dissatisfaction and whether companies will use pay increases to attempt to retain key leaders as new career opportunities present themselves.
Strategic Workforce Planning A Key To Driving Business Growth In 2010
As the recovery progresses, employers will shift their focus from cutting labor costs back to preserving talent and investing in key segments of their workforce — issues at the very heart of strategic workforce planning (SWP).
"Employers who've been forced to focus on reducing headcount will return to deciding whether to buy, build or rent the skills necessary to meet future business needs," says Mary Young, principal researcher at The Conference Board. "The economy's impact on SWP is likely to be moderated by the level of credibility, acceptance and integration that SWP had attained before the economic crisis turned things upside down," Young says.
"In companies that were just getting their feet wet with SWP, the global economic downturn may have put a halt to these efforts, although only temporarily," she adds. "The same is true in companies where immediate financial pressures required that SWP shift from long-term planning to short-term problem-solving. But in companies where SWP was well established, SWP served as a critical tool for managing through the economic crisis."
The Conference Board defines SWP as the formal process that connects business strategy to human resource strategy and practices, and ensures a company has the right people in the right place, at the right time and at the right cost. SWP and its attendant investment plans take into account such factors as which skills will be critical to business success and which roles will be hardest to fill, as well as regional variations in human capital quantity, quality and return on investment.
"Strategic workforce planning enables companies to make these decisions based on sound data and analytics," says Young. "Business leaders can use strategic workforce planning to evaluate a variety of options, such as, for instance, the costs and feasibility of building a new plant in Russia, Brazil or India, based on the local skills supply, infrastructure and labor laws."
A Matter Of Perspective: It’s Time To Be Competitive Again
Many businesses have taken a two-plus year hiatus from competition, choosing instead to concentrate on cutting costs. This, in turn, is helping them experience a jump in productivity.
Other businesses, however, have chosen to use the economic downturn to become lean, while ramping up their competitiveness. They are ready to jump out quickly, taking advantage of the broad economic upturn when it comes.
"We are experiencing interesting times," says Mike Zinn, president of executive search firm Michael D. Zinn & Associates. "Many organizations are enjoying a jump in productive capability because of cutbacks they've made in overhead, yet these same organizations need to once again begin filling their pipelines with the managerial, sales and marketing talent they need to take advantage of the productive opportunities they have. By doing so, truly successful companies will use economic downturns to leapfrog the competition."
Zinn asserts that the executive hiring market has reached a transitional point. Employers, he says, have "gone from a survival mode to a productivity mode, and need to start taking advantage of this."
Year-over-year comparisons in earnings bear this out, Zinn suggests. Costs are down and the slightest increases in sales show immediate increases in earnings. To sustain earnings growth, it is just a matter of time before organizations once again ramp up their hiring engines, with emphasis on the skills they will need to market and sell goods and services.
Invariably, Zinn says, "This will increase hiring, and it soon will be a good time for people with impressive sales résumés. After a number of years of experiencing hard times in the ‘Great Recession,’ organizations of all types will be looking to them for growth."
Executive Talent Assessment Is Key To Compensation Alignment
In highlighting 10 corporate action items for companies to realize successful executive compensation results in 2010, consulting firm Mercer points to the need for them to conduct an executive talent assessment.
Without such a benchmark to inform corporate practices when it comes to paying retention bonuses, deciding stretch assignments and otherwise finding ways to keep their best leaders, how else can companies effectively engage, reward and retain them?
The consensus among many economists is that today's business environment is much more stable than it was a year ago, and many companies are again focused on growth. Yet, with the need to reward high performers also comes a duty to sort the successful from the truly effective.
Yes, a growing number of academic and other voices are wedging a discussion about executive effectiveness into the kind of performance management dialogue that usually only queries whether they've been successful. That may be because success is subjective, whereas effectiveness speaks more directly to the linkage of individual performance to desired business incomes.
Either way a company wants to slice it, now is indeed the time to take stock of leadership assets, plan for painful departures and otherwise invest in rebuilding its relationship with leaders who've been through a lot over the past 18 months.
In today's market, many companies are standing pat with their hiring plans and executives are hesitating to make a move until there's more certainty about the economy. These trends have led to even more intense competition for searches, to commodity pricing, and to an unwelcome drop in search firm revenue.
Join Michael McLaughlin, principal with MindShare Consulting LLC, to learn essential strategies to win new business, including:
4 trends that define services selling today
How to establish and execute marketing strategies in this era of the new buyer
How to build resilient relationships with new clients and strengthen existing ones
How innovative firms are using social media, value-based marketing, and client relationship management strategies to keep their businesses growing — in any market.
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In this interactive program for ExecuNet members, author Marshall Goldsmith will teach you how to:
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Acquire, maintain or recapture what really counts
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2009 Executive Job Market Intelligence
Our 17th Annual Executive Job Market Intelligence Report captures the latest trends and developments in senior-level hiring, compensation and executive search.
"The next time I have an upper-level position, I will get in touch with ExecuNet. I was very pleased with the quality of the candidates that I was receiving. Normally, if I were to post this on [other sites], I'd receive about 100 candidates who think they're qualified [and are] not, and maybe 2 that might barely fit the specs. So, from an internet-recruiting standpoint, you guys are doing a wonderful job!!! Thanks again!"
-Amanda Kearns, Recruiter, Spherion Professional Recruiting
The worst recession in decades is taking its toll on the executive employment market, but there appears to be some light at the end of the tunnel. Recruiters are finding industry experts and business referrals largely by networking, according to ExecuNet's 17th annual report.
