Given the shortage of talented executives, how can companies attract the best and brightest? What do executives look for in new employers? How does a company become a destination of choice for talent in the aftermath of the financial crisis?
To answer these questions, we surveyed several dozen senior search consultants at a top global executive-placement firm in 2010. As a group, they were 57% male and 43% female. They represented a wide range of industries and regions. (For more on the survey respondents, see “Who We Surveyed” below.) Experienced search consultants typically interview hundreds (in many cases thousands) of senior executives; they assess those executives’ skills, track them over time, and in some cases place the same executive in a series of jobs. They also observe how executives negotiate, what matters most to them in hiring contracts, and how they decide whether to change companies. We asked the search consultants what strong candidates look for in prospective employers.
The answer turns out to be far more nuanced than mere wealth accumulation and career advancement. The factors that executive candidates assess when evaluating an employment opportunity fall into three categories: the firm (platform and track record, current and future prospects, people and culture), the job, and the compensation. These factors are interrelated, and most candidates willingly make tradeoffs. One consultant said that a candidate may accept a less-than-perfect job if it is in a sound industry and at a firm with a track record of success “even if the role is only 60–70 percent of what they are ideally looking for.” Another concurred: “You might take a great job with great pay with a lesser company. Alternatively, you might take a less interesting, lower-paying role with a great company.” Some consultants said that the weighting of such considerations typically varies with age and seniority. As one put it, the decisive factors “depend on where individuals are in their own life cycles and personal wealth. Do you want to take a bit of a gamble with potential upside, or do you want to play it relatively safe?” Another astutely summarized two ways that life-cycle scenarios play out: “Younger candidates who are quickly moving up the ranks are interested in reputation, but may take a calculated risk to gain interesting exposure to something cutting-edge or highly challenging simply to obtain the skill, knowledge and experience, whereas an older executive is less inclined to take risks that could negatively impact his or her reputation.”
Platform and track record. How strong is the firm’s track record? What is its reputation? Working for a successful company is of the utmost importance to executive-level candidates, many respondents said. According to one consultant, job candidates focus most intently on “the past success—of the CEO and of the company. People want to be associated with success and not failure. Successful companies attract the best people, and, as they say, ‘success breeds success.’”
Candidates also look at firm resources likely to help a new executive succeed and deal effectively with clients, notably the brand, the firm’s reputation, and its external relationships. And they also consider the company’s platform with an eye to the opportunities it provides for growth and advancement. As one respondent put it, job candidates “look for an overall platform—that is, not just a job but an opportunity to continue to evolve beyond the specific role discussed.” The firm’s platform is of particular importance in some service industries. One consultant commented, for example, that “within the investment-banking community, it is all about platform and brand.”
Others emphasized the risks associated with joining a given firm, and the desire to avoid an Enron-type situation. Candidates look at “reputation and brand,” one consultant stressed, “as a wrong choice here can be disastrous.” Another, who works with legal executives, said, “Lawyers and compliance people are focused on reputation in a number of ways, e.g., the brand of the company, the reputation that the firm has in terms of its adherence to rules and regulations, and the reputation of people that work there.”
Current and future prospects. Candidates also appraise a firm’s future prospects, market competitiveness, and business strategy. Is it well positioned? As one consultant put it, candidates look at the “strategy of the company—is it viable? Are they changing enough?” Another elaborated: “If the company is not currently performing, [candidates] will look at ownership structure, board capability, the CEO (if not going for that appointment), the leadership team and its competency, and whether the organization is able to articulate a clear strategic intent.”
Job candidates also look at whether the company is well positioned for the future. “Executives want to work for a winning company, or a company that is poised to be the ‘next Google,’” one consultant said. “They want to be part of the management team that drives its growth, and be recognized for the added expertise that they bring to the team.” He offered an example: “I recently recruited a VP Sales and Marketing from a well-known consumer technology company to be the president and COO of a small but fast-growing smart-grid consumer technology-products company. He saw the upside in this hot market sector and the opportunity to lead and mentor a young team.”
People and culture. When assessing a firm’s culture and people, many candidates raise the question of fit. Typically, one consultant said, candidates ask, “Is this a place where [I am] going to fit in and, most importantly, enjoy working and contributing?” Another said that the question of fit extends beyond immediate colleagues to encompass the ethos and direction of the firm: candidates want “to share with the owners the same values and vision for the company” and to agree on its overall strategic direction.
Candidates want to work with people they respect and can learn from. Thus the prospective boss (or bosses, in matrix organizations) is the single most important individual in the firm. “The future boss needs to be a person who the candidate can look up to,” one consultant said, “and from whom he or she can learn something.” Another unequivocally called this the most decisive consideration: “The absolute most essential criterion is a respect for the people a candidate will be working with.”
A few consultants mentioned an organizational culture that values work/life balance. One said that some candidates look for “a genuine culture of care, which often comes across in the interview process”; a sign of such a culture is the “understanding that spouse and children have a place in a career.” Some candidates also seek inclusive cultures that welcome diversity and authenticity in leadership style. Some executives want to join companies with collaborative cultures while others prefer individualistic-based organizations.
The job.When it comes to the job itself, the single most sought-after characteristic is opportunities for career advancement and personal growth. “What do good executives look for in new jobs?” one respondent asked rhetorically. “Change, variety, and some element of diversity, i.e., something new and different that will continue to challenge them, make them grow, and make them learn more about their own abilities and the world out there.” Other consultants asserted that a desirable job should offer professional challenges: “a stretch and learning opportunity,” “upside potential to grow professionally,” and “possibilities for personal development and growth.”
Candidates consider their likelihood of succeeding and having an impact. They assess the training and development that the position offers, the resources that would be available to them, and the degree of autonomy the job entails; they think about how the outside world would perceive them in the role, particularly if it is highly visible. “As an extension of, ‘What is in this for me?,’ executives are very focused on legacy,” one consultant said. “‘What will the world say about this . . . on the day I join . . . if I turn this around . . . if it goes sideways?’” They also want to assure themselves that they have the skills to do the job and, in the case of turnarounds and restructurings, to do it quickly.
Finally, candidates compare the prospective job to their current positions, asking themselves, “Is the move a step up in terms of their career and kudos?” Is it “a step up in responsibility—either in P&L size, geographic footprint, increased portfolio, etc.?” One consultant speculated that many job changes represent efforts to rectify the shortcomings of current positions: “More moves arise from dissatisfaction than arise from a better opportunity arising out of the blue.”
Compensation. Consultants differed on the importance of compensation to prospective executive hires. At the executive level, some argued, compensation is no longer decisive. One asserted that it is less often a negotiating point than a mere matter of adhering to industry pay norms: “Compensation can often be a ‘non-issue,’ so long as the offered package is truly reflective of the market and the situation.” Another shared an anecdote:
A CEO was interviewing a candidate for a position. They had been going for almost two hours, talked about everything between earth and sky, and created some very good chemistry between them, but compensation never came up. As the candidate was leaving, he turned to the CEO and said, “Oh, by the way, when I go home my wife will ask what this job pays. What shall I tell her?” He got the job.
Some consultants said that compensation per se matters less than certitude that the firm’s compensation system is fair and transparent. Candidates want assurance, one said, that they will “be rewarded and compensated according to the results delivered.” Another said that candidates want to “influence [the compensation] payout substantially by their own performance/actions.” According to a third, the most decisive factor in compensation is the candidate’s current compensation: “Compensation must be equal or greater [than current compensation], with longer-term positive prospects.”
Some consultants, by contrast, said that compensation is of paramount and growing importance in attracting an executive. “Executives have become, quite simply, even greedier—[taking] a fairly unashamed approach to securing as much for as little as possible,” one said. Another commented that paying above industry standards can be a key selling point: executives often ask, “Does the company pay above market average?” And some executives want to be compensated for any additional risks they would be taking on and/or for the transaction costs of switching firms.
Talented and experienced senior executives typically enjoy multiple employment options. Companies compete for qualified candidates, in part because executive talent is in short supply worldwide. Thus, no longer it is enough for organizations to be great in one thing to attract the best people. They need to be great on many dimensions to be a destination of choice for stars.
Who We Surveyed
The senior search consultants we spoke with represented a broad range of industries, including industrial (28%), financial (19%), consumer (13%), technology (11%), corporate (6%), functional practice (6%), education/social enterprise (4%), and life sciences (4%). They worked in 19 different countries from every region of the world, including North American (34%), Europe (28%), Asia/India (26%), Australia/New Zealand (6%), Africa (4%), and South America (2%).