The Cushman Report

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The Cushman Report

Breaking News, Trends and Information about

the Communications Marketplace

January 1998

Instead of peaks and valleys, we seem to be jumping from one incredibly demanding top priority assignment to the next. I used to think I could create a "to do" list and actually get past the third item on it. If I manage to come out even, or ever so slightly ahead of where I started on a particular day, I feel that is was a good day. Is your day getting longer? With so much communication -- the e-mail glut I referred to in a past letter, for example -- I’m reading "stuff" well into the evening. It is inevitable that the quality of work we do suffers from the speed, volume, and lack of time to strategize.

Are we expecting to produce work at the same quality levels as we did in less hectic times (say two or three years ago)? Guess what -- we can’t meet those expectations. I’ve had people tell me they take pride in producing quality work -- then they send me error-filled cover letters and poorly organized resumes. It is clear that we are not facing the reality of what I call the "Grind of ’98."

I think professionals are becoming less and less satisfied with the work they are tackling. Rushing from assignment to assignment, there is no time to savor or enjoy the successful completion of a project -- merely a sense of relief that the deadline has been met and it’s time to jump to the next one (before it’s too late.) Where will this lead? I think we are headed toward a major crisis as agencies loose people who simply choose another path. Ultimately, organizations will not be able to fill jobs irrespective of the dollars offered. Signs of this problem are evident as companies report positions remaining open for a year or more.

All of this pressure to find and hire the right people does not make my job any easier. While we are being asked to take on new searches (signing the contract is not the challenge it once was), we are also limited by the marketplace. It is taking us longer and we are finding it harder to bring assignments to a successful conclusion due to this competition and shortage of qualified talent.

I particularly wanted to discuss the new paradigm when we reach the offer stage. The balance of power has shifted, as I mentioned in my last letter, to the candidate. Instead of the client (hiring organization) extending an offer and saying, "take it, it’s not negotiable," the process has become one where the candidate actively participates in the formulation and setting of parameters for a total compensation package. In at least half of the recent negotiations, once the offer was extended, the candidate turned the job down. Clients are not understanding this change and are becoming frustrated by finalists that have taken their mental energy and time, and who ultimately drop out (in many cases leaving the organization back at the starting gate).

Let me walk you through a recent case study. The position was for a Director of Marketing Communications with an East-Coast high tech start-up that was a spin-off of a Fortune 500 corporation. The President had been recruited from an excellent company and had a history of hiring top-notch people with superb major league credentials. This was a "one of a kind" hire -- the first Director and a direct report to the VP of Marketing.

The President assured me that money was not an issue -- I could look for the best. He could not provide a salary range since he didn’t know whom we would find. This was a narrowly defined position, and it was quite a challenge to identify candidates. After extensive research, a top-notch Marcom Director at another Fortune 100 corporation in another state was identified. He has over 15 years of excellent background and was highly regarded by his company. However, the challenge was gone and he was intrigued by the start-up environment, although his entire work history was risk-averse. He also had a young family and was not in a position to assume a high risk/high reward financial position (e.g. lots of stock options) versus a lower salary.

He emerged as the finalist and really wanted an offer. He was very clear that he would not move for less money than he was earning and ask his family to suffer any hardships as a result of working for a start-up. I asked him to provide me with a basic outline of his compensation. This was not a demand for a particular compensation package, but rather the information needed to evaluate his earnings in order to put a reasonable offer on the table. His compensation was a complex mix (as many are today) of base salary, annual bonus called a pay incentive, along with a quarterly management bonus. In addition, he was promised a raise and stock incentives. He also provided housing and family considerations impacting relocation issues. It seemed that any competitive offer would have to take into account all of the cash compensation, which was about one third of his base salary.

The offer that was ultimately rejected consisted of a base salary, stock options, a guaranteed bonus after one year, and a relocation program that would have permitted transient living until the family could move. Despite the candidate being clear that he would not take less than his earnings level, the client chose to offer him what amounted to over a $25,000 salary loss. The client explained that the stock options would be worth a great deal and that his salary level, if any higher, would be above what his boss (the VP of Marketing) would be earning. When the offer was initially given to this candidate, I immediately began to ask the client to review the figures. The client was slow to respond, and during this waiting time the candidate began to have doubts. The relocation issue posed a great hardship. Meanwhile, other job leads began to surface closer to home for him. It was no surprise that as we approached the New Year the candidate withdrew citing family considerations.

What can we learn from this? First, at the outset, let’s have a clear idea of salary limitations. Second, the candidate’s compensation requirements must be understood by the candidate, as well as by the client. This is not as simple as it first appears. Relocation and cost of living differentials play havoc with salary ranges. Very often the candidate doesn’t have key information, such as how long his house may be on the market (based on local averages), approximate market value of the home, and approximate cost of comparable real estate in the new area. It’s only after an opportunity seems to be close to the offer stage that the candidate takes the time to dig up accurate numbers. By the time all these figures are laid out, the true cost of relocation emerges that is many thousands of dollars above the anticipated budget. And, many companies today offer lump sum payments (gross) that net to very modest figures.

It is only if both parties negotiate openly and clearly early in the process can we hope for success. I see a collaborative effort as being the key here. How can an organization put the pieces together that are tailored to the needs of the finalist? In one case it may be a guarantee of temporary housing coupled with a bridge loan (and a guarantee that the new hire will not be caught with two mortgage payments). In another, it would be a cash sign-on bonus with a separate relocation budget. In a third, the key is spousal relocation assistance.

Unless an organization is willing to tailor its offer and begin with an attitude of compromise in this current climate, there will be more and more disappointments at the altar.

Let me know if you have any innovative solutions to wooing and winning at the offer game. There’s much more to be said about structuring attractive financial packages. Would you like more information on that subject?

Happy ’98 -- and don’t work too hard.

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