Shelf-Life (aka - Calendars Kill Candidates)
Let me thank PSA for this great Blog post! We are proud to be a part of this great group - see http://www.partnerssearchalliance.com/.
The term "shelf-life" was coined to refer to expiration dates on perishables in the supermarket. However, a different market - the executive talent market - is increasingly one where the same term can be applied.
Allow us to explain and set the framework for this claim. In the US, the market for executive talent suffered as the country struggled through the 2007/2008 recession, with the post-crisis recession stretching in some industry sectors into 2011 and 2012. For these 5 to 6 years, employers developed a sense of caution when looking to hire new executives.
- What might happen if there were a "double-dip" - the country slipping back into recession?
- What might happen with low inflation, interest rates near 0% and the country still not in a growth mode as the Federal Reserve and other government agencies had hoped?
When companies looked to replace or add a new executive, not only did they wait until the very last minute to give it the green light, but they also took their time interviewing as many candidates as possible.
This was under the assumption that candidates for executive positions would remain "on the market" for 6 months or more; that supply of executive talent outstripped demand and therefore the company was in the power position.
Times are changing
Starting in 2013, and definitely now into 2014, this has changed. The market for executive talent has shifted from a buyer's market (those hiring executives) to a seller's market (those selling their talents to companies in exchange for a paycheck).
While the below evidence is anecdotal, these are from a collection of retained search firms who created PSA (Partner Search Alliance) in 2006.
- The mission of PSA is to help all member search firms by sharing best practices, market conditions, and refer clients to the best search solution in the alliance.
All of the below examples are from Q2 2014:
Industry sector: SaaS Software; Location: New England; Position: SVP Sales:
- The company waited to bring 2 short list finalist candidates in for face-to-face interviews with the CEO and the Board of Directors. For one candidate, they did a series of 3 separate phone calls to interview the candidate for over a week or more. For another candidate, they decided to put in another "phone screen" step before flying the candidate in for final interviews. In both cases, the candidates called the day they were supposed to fly in to let the company know they had accepted another position and would be cancelling the interviews. One of these candidates had the competing company that was courting them work through the weekend on employment terms, using the other company's upcoming interview as a 'stalking horse' to accelerate their offer negotiation process with the hope that they could trump the interview process of the competing company. They succeeded.
Industry sector: Healthcare IT; Location: Southeast; Position: COO:
- Search firm had to convince client to make offer contingent on references and background or risk losing the candidate to a competing company that was moving fast. The client did this, beating the other company to the punch, and closed the candidate.
Industry sector: Energy; Location: Southeast; Position: VP Engineering:
- Candidate declined extremely competitive offer indicating it was not enough to motivate him to make a change. In a red-hot market, candidate expectations are outpacing market-based compensation packages.
Industry sector: Wealth Management; Location: West Coast; Position: Private Client Advisor:
- Boutique search firm assisting in the acquisition of a new Private Client Advisor learned that they were in competition for a sought after candidate with a much larger and better financed competitor. Chosen path was to clear potential counter offer obstacles by ensuring that the boutique firm's value add was the breadth and depth of the position and the stretch factor for the incoming executive. They stated they would not be able to compete in a counter offer scenario and openly stated their compensation plan. Candidate accepted the offer from the boutique firm.
Industry sector: Medical Device; Location: Midwest; Position: Head of Sales Operations:
- The candidate was working as a consultant in a Sales Operations management capacity. The client company was aware that moving fast was critical - that the candidate's consulting assignment company had an interest in making her a fulltime employee if they could get the budget and position approval. Due to travel delays, the client company took over 45 days from initial interview to the scheduling of just 'one more' interview. The candidate received an offer from the company where she served as a consultant - and accepted.
Time Kills All Deals
- A saying in the investment banking industry.