Salary negotiations are often quite tricky in executive search.
First, clients vary widely when they discuss target salaries. Some carefully lay out the compensation band for a given position, while others suggest they will pay whatever it takes to hire the right person. Some are sincere while others are not. Salary ranges are material for us since we can recruit the very best person we can find at the salary the client wants to pay, or we can recruit the very best person we can find, period. At the end of the day, all organizations share the basic goal of hiring the highest caliber candidate at the lowest compensation possible.
Candidates, on the other hand, start with the knowledge of their current compensation package and a sense as to how fair it is relative to others. But that does not even begin to tell the story on what guides their approach to compensation in a typical executive search. For this you have to look to the subtle ‘push/pull’ dynamics in play.
‘Push’ refers to the overall happiness or unhappiness of the candidate with his current work/career situation. When looking at a potential new job, someone who is unhappy is likely to make tradeoff decisions, including compensation, in an effort to get happy, while someone who is relatively content with their current job or employer has little pushing him to tradeoff considerations of any sort.
‘Pull’ dynamics, on the other hand, refers to the attractiveness of the opportunity on the other side of the fence. A juicy opportunity with an outstanding or ‘hot’ company is one such gravitational pull as is a long-awaited promotional opportunity into a new company. Meanwhile a company known to have high turnover, poor leadership, high travel or commuting requirements, or whose prospects are viewed as limited will have little pull by which to moderate compensation expectations. A client faced with little push and limited pull has little choice but to attempt to buy the candidate’s affections. You will see this often in companies with challenging founders whose reputations force them to pay well above market value to attract quality candidates who consider it danger pay.
Since headhunters know that the success of a search hinges on the push/pull dynamic, they read it carefully throughout the course of the search. They may even try to influence it by gently emphasizing the importance of some variables over others. But the headhunter has to be careful since his ability to act as an effective intermediary depends on the level of trust with each of the parties concerned. Clients must trust that the search consultant is taking steps to help them hire the right candidate at the lowest cost possible while candidates must also trust that the headhunter’s interests include the quality of decisions tmade by them.
In my own practice, I work hard to try to serve the interests of both client and candidate. I make sure that the parties ask the questions of each other that need to be asked in order for good decisions to be made. I insist on certain process steps that reduce the risk of mistakes. I probe the push/pull dynamics carefully and I try to give balanced advice. As a result, I am usually able to garner the necessary trust and openness to do my job.
But a few times per year, I will encounter candidates who manage to mess with my head. These candidates walk the line between cooperativeness and guardedness, always expressing the appropriate level of interest to keep the search moving forward, yet never fully revealing their true intentions. These candidates are poker players who are difficult to read, yet conduct themselves with a professionalism and class that begrudgingly impresses. They always appear to be one step ahead, and in control. They are, more often than not, the ‘A’ players.
These candidates make it difficult to predict the likelihood that an offer will be accepted if one is extended to them and as a result they compromise my ability to act as an effective advisor to my client. By clouding the ‘push-pull’ dynamic they also tip the negotiation scales in their favor and they are usually rewarded with superior compensation offers. By the manner in which they conduct themselves, they give evidence of strategic negotiation skills that the client will invariably benefit from if the candidate ever joins them. Unfortunately you never know until the very end if that is going to happen.
Want to mess with a headhunter’s head? Walk that line and remain in control. But be careful. Some of us are pretty good at nudging candidates off those lines and only a few candidates a year are able to pull this off. They just happen to be the best ones.
Looking for a dynamic HR role? Stay away from the entrepreneurial tech sector.
January 1, 2012
In a recent survey of HR graduate students, the technology sector rated among the most coveted destinations to ply their trade. It is viewed as a world of innovative people, technologies and approaches where progressive talent management, OB/OD and related HR work awaits.
The Cry to Replace RIM's CEOs – A Truly Dumb Idea
October 13, 2011
Leaving aside the recent service outages, the shellacking of RIM in the press is a tad surreal to behold.
For the few Luddites not familiar with the firm, Research in Motion is the successful Canadian smart phone pioneer with revenues of $20bb per year, no debt and cash in the bank. They manufacture products that remain popular around the world and continue to boast technological innovations unmatched by any competitor. Their most recently launched smart phone devices have been well reviewed and appear to be selling well. And though the company's first version of its new tablet, the Playbook, has room for improvement, it is a promising piece of technology.
Context: When Companies Confuse Start-up Experience for Start-up Experience
October 7, 2011
I had the occasion this week to chat with an entrepreneur still licking his wounds from a stalled startup venture. His tale is a reminder of how easily companies misunderstand organizational context when hiring. For startups, such a misunderstanding can be fatal.
The CEO Hiring Practices at HP
October 3, 2011
The press tells us that Hewlett Packard is the largest technology company in the world with revenues of $126bb. Impressive as those numbers may appear, they do not seem to impress HP's Board of Directors. You see they do not believe that any of the firm's 324,600 employees are capable of leading it. Not one person. Not this year or last year when CEO changes were made. In fact they were apparently not capable six years ago or even eleven years ago when CEO changes were also made. But before summarily indicting the firm's succession planning/leadership development programs, it is useful to consider the track record of the external candidates who were considered better choices than the firm's internal candidates. This analysis decidedly shifts the spotlight to the competence of Hewlett Packard's Board of Directors.
The Folly of Believing What You Read
September 19, 2011
Some time ago we posted a blog titled ‘So you REALLY want to be a CEO?' which looked at the human costs of climbing the upper rungs of the management ladder. The blog was based on a series of articles immediately following the ‘resignation' of Pfizer CEO Jeff Kindler. All of these articles presented a cautionary tale of life in the fast lane, the long hours, the extensive global travel, and the shareholder pressures that accompany an uncooperative stock price. They also spoke poignantly of the physical and emotional toll that such unrelenting pressure took on the Pfizer CEO who eventually resigned in order to attend to his family and health. As it turns out however, much of this narrative may not have been true
Before sending us your resume (and then getting frustrated with us) ask who we work for
July 25, 2011
A friend of mine is a trustee in bankruptcy. As his title suggests, he and his firm serves those contemplating the ‘cleansing' process of personal bankruptcy. Potential customers compare service providers, select one, and then pay the chosen firm a fee to initiate and manage the ensuing process on their behalf. However, as soon as the relief-seeking customer signs on the dotted line, the trustee's allegiance shifts to the creditors for whom they then seek to maximize debt recovery. This shift in who works for whom must be a tad unsettling for people who already have a heap of problems and stress on their hands.
What Dating Services Can Teach Companies About Hiring
June 1, 2011
Executive-level hiring is a decidedly aspirational endeavor. Organizations idealize their workplace cultures, select for attributes that will fit into those romanticized environments, and then immerse unsuspecting hires into their ice-cold reality of their works-in-progress.
How to Survive a Startup - by Jill Ram
April 20, 2011
If you're an executive and you're thinking of joining a start-up, know what stage of a start-up to join. If the company is in its first year or so, don't expect to make significant changes. If you join after the company is somewhat established and mistakes have been made and learned from, you'll likely be more successful from the outset. If the founder has stepped aside, well, by then, the company is likely not considered a start-up anymore. It won't be functioning like a big company yet, and it won't have all the structure in place that it needs, but it will be run with more practicality and with less emotion. Timing is everything so choose it well.
Good News for the Old, Overqualified and Overlooked
March 18, 2011
It is expected that a significant percentage of the baby boomer generation will drive right past the Freedom 55 highway exit. For many the goal of early retirement will have proven to be unattainable hype, while for others the ups and downs of working will appear more attractive than the prospects of working up and down the local lawn bowling leadership board.
Pressed for time? Blame those Benedictine Monks.
February 24, 2011
It is among the principal reasons candidates tell us they are open to consider a change in employers. They are tethered to it, yet somehow it still flees. It is time, the most precious of resources, and for many harried executives they want some of it back.
Though their relationship with time may be strained, it is worth pointing out that it was not always this way. In his fascinating book Time Wars, Jeremy Rifkin chronicles the evolution of our modern relationship with time. He points out that in traditional agrarian and pastoral cultures, time was a very naturalistic notion maintained in cyclical, repetitive, biological and even sacred terms. The ‘passing of time' was cued via the changing seasons, biological lifecycles and lunar patterns and thus, the cadence and tempo of those societies were finely tuned to the cyclical rhythms of their physical environments. As he states, "Our early ancestors coveted the circle, perceiving time as eternal return, a ceaseless repetition of an endless cycle of birth, life, death, and rebirth". Since these cyclical rhythms could neither be accelerated, nor altered, the cadence of these societies' was natural and harmonious.
Salary Negotiations: How to Mess with a Headhunter's Head
May 1, 2008