Hiring Trends

January 2006 Archive

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January 30, 2006 [Judy Cushman]

Very quietly, the communications market has shifted. We are now looking at a challenging hiring situation where the candidate pool in certain “bread and butter” categories has shrunk. It is at the point where hiring managers at the Corporate VP level are finding themselves in a bidding war with other potential employers and the incumbent’s (perhaps) soon to be former employer. A strong candidate may have several offers or options to consider for his/her next move. Hiring managers will expect to pay market rate and perhaps a premium for an “A” team member.

This may come as a surprise to officers who have been “on hold” with their headcount or who have done limited hiring over the past two years. As a “premier” employer with an excellent reputation, historically, a modest increase in the base along with normal corporate incentives would have been sufficient to hire a candidate

Today, there are “bidding wars” going on for candidates with a track record of success both in completing tactical work and with planning/project management skills. The greatest level of activity, and where the salary pressure is most evident, is at the Manager to Director levels which translates to PR Agency Senior A/Es to Senior Directors. These are the backbone of agencies and corporate departments, the “can do” people with the skills and judgment to make good decisions, under pressure and “on the fly.”

From their records at work, hiring organizations have a clear picture of how talented these individuals are and can eliminate the risk of hiring “high potential” junior-level people. Right now, corporations are making a “run” on agencies for that mid-level talent and agencies are struggling to retain staff. This will create serious staffing issues through the year for large and mid-sized consulting firms.  

These market conditions do not apply to top (VP) corporate positions generally at or above the $300K level. Senior organizational (not agency) opportunities do not fit into the same competitive marketplace as the strong mid-level positions. The total compensation package at the Corporate VP level (not including financial services where the lowest level VP title is equivalent to a Director) is generally sufficiently flexible so that deferred compensation (in the form of various stock plans and cash bonuses included in the offer) are sufficiently persuasive.

In addition, these opportunities have their unique profiles so that the reason a candidate will be offered and accept a position has to do with fit with the management team, alignment with the culture/values and a myriad of other characteristics. Compensation becomes much less a critical factor for both parties. By the time the finalist is selected, the hiring organization wants to make an offer that will be “comfortable” for the individual. Generally, the most senior officers in the organization have decided that this individual is THE one to bring on board and they do not want to create a stumbling block around the issue of base salary and package. And, what the President wants, he (or she) usually gets.

Returning to the issue of competition for Manager to Director level candidates, one of the most important factors in making a hire and having an offer accepted, is to have the hiring manager directly involved in the process. Often, hiring managers will take a great interest in the selection of the finalist but will delegate the offer to their HR group.

Given market competition, it will take speed, sensitivity, advocacy (HR: “You mean we have to pay that much?” Hiring Manager: "YES.") to make a competitive offer. It is an offer that to an HR group may/will seem too rich. In fact, I would start the process of advocating for sufficient dollars (in base, bonus, sign on and stock) as soon as the search begins. If you are retaining outside help, ask for written recommendations about competitive offers in the category (for sake of comparison) at the onset of the engagement.

As a hiring manager know what the hard bottom line for an offer is. Be realistic as you talk to candidates about what your package is. There should be mention of a salary range, not a specific number. I do not recommend holding back at the outset on the compensation  figures (low to high.) That does not mean you promise a figure to a candidate, but you can establish at the outset if the conversation should continue.

Here are ways to outfox competition and preempt counter offers. The first step is to talk to the candidate and ask for total current compensation figures. Is there a raise on the horizon? Be sure to have someone in HR  review the figures thoroughly so that what is presented is a complete picture. (I am surprised by the number of finalists who don’t know what their total compensation is.)  These figures should be provided by a candidate as soon as you know s/he is a serious contender.

If the candidate can give you an approximate idea about range s/he is seeking that would be useful. However, do not stop at that point. Ask if a raise is scheduled soon. Ask if the current organization has a history of making counter offers. Has anyone left recently that the company wanted to keep? How did the current employer react? Were there counter offers? Then ask, what would happen if there were a counter offer? Would this candidate NOT consider a counter offer if the new potential employer upgraded the offer to a certain level?

If the candidate gives you a figure, s/he is telling you s/he really wants the job and it is a done deal if the hiring organization can meet his/her financial requirements. It will take personal attention on the part of hiring manager working cooperatively with either their internal HR people or their outside recruiting resources to take that information and develop an offer that says, “We have listened; we want you on our team and we have gone the extra mile to make this an attractive offer.”

That number, of course, is likely to cause concern in HR circles. If “Charles” is earning $100,000 and his organization is likely to counter, that employee can easily be offered a $10,000 increase to stay. (The current employer is factoring in the cost of replacing the individual, lost momentum, lost productivity, etc. Seen that way, $10K is a reasonable counter offer.)

You need to walk your finalist candidate through that scenario, e.g. what if your current employer counters and offers you $10K to stay? “What (Mr. or Ms. Candidate) would you feel is a figure that would enable you to resign and accept our offer?”  Generally the number will come back at the $5K-$10K level over the counter offer. This is a major increase, above normal HR/Corporate parameters, which will require advance preparation with HR.

Without this advance preparation and internal agreement about how to proceed, the search could collapse in disarray at the final moment. 

Happy Hiring!

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