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The Cushman Report

Breaking News, Trends and Information about

the Communications Marketplace

January 1999

It’s January and it’s soggy in Seattle -- so what’s new? Soccer games at 9 pm in the rain and practice putting where the ball splashes into the grass are the norm. But -- it’s not snow and ice. We are running 10 inches ahead (at least) of normal seasonal rainfall and the dirt road up the hill to my house past the new home site (where the neighbor has denuded the land) is slipping. The neighbor declares this event an Act of God. Recruiting and writing newsletters (around power failures) are easy compared to doing battle with him.


THE MARKET IS SIZZLING

UPWARD SALARY CREEP -- ACROSS THE BOARD

SALARY COMPRESSION AT THE VP LEVEL

SELECTING A JOB AS A STRATEGY FOR ACCUMULATING WEALTH - AN EXAMPLE

THINKING 12 MONTHS AHEAD -- OPTING OUT EARLY

THE CLASH OF CORPORATE EXPECTATIONS VERSUS THE RISK-TAKER'S VALUES

WHAT DOES "NO" MEAN WHEN A COMPANY DECIDES YOU ARE NOT THE "ONE" -- THE DARK SIDE OF THE HIRING PROCESS

The Preliminary Stage

The First Round Interview

Meeting the Hiring Team

The Final Round

What Can the Recruiter Say?


THE MARKET IS SIZZLING

Here we are at end of the first month of ’99. Are you behind? I am. Business is booming and the market is so strong that pre-IPO companies are moving up timetables to take advantage of the moment. The demand for top performing, mid to upper mid-level Public Relations Manager/Director is almost a cliché. My firm has received preliminary calls about tackling searches at the rate of two a day. Conversations with hiring managers, particularly on the agency side, are practically carbon copies of each other. Everyone is struggling and wondering if JC&A can solve the problem. I’m also seeing more Senior Director to Vice President searches (nationally) open up. The Marcom area seems less frantic. Here’s why: for the younger companies, PR is a critical and cost effective positioning tool. It is much a more efficient use of limited budgets than an expensive ad campaign.

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UPWARD SALARY CREEP -- ACROSS THE BOARD

Salaries in all this "buzz" are creeping up -- again. I saw a salary survey that said the figures are higher on the West Coast versus New York and New England (PR Week --1/11/99, p. 1). I’m not surprised. One conservative high tech company in the Pacific Northwest with a Senior PR Manager position to fill is offering $80-$125,000. S/he will be in charge of PR for its largest division. Three years ago this post would have been at the $70-90,000 level (with the company protesting loudly about paying 90K). A high tech agency Manager with a minimum of five years experience is at the $60-$75,000 range.

Salary creep is not just limited to high tech. One of our industrial corporate clients filling a Manager’s position, seeking a minimum of only 5 years experience, has just upgraded its salary range to $70,000. The company is offering a number of attractive cash perks, putting the "real" compensation closer to $80K. Without that increase, JC&A would not have been able to compete in the marketplace.

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SALARY COMPRESSION AT THE VP LEVEL

Salaries are moving up at the middle-management level due to turnover that puts jobs "in play" at dizzying rates. Upper management positions (Vice President and Senior Directors) with base salaries of $150,000, that were once considered attractive, are no longer in line with the compensation of candidates who would logically be one level below and ready to move up. Their packages are already at these levels if they have been through two salary review cycles.

Because the senior posts are not filled as often as the mid range jobs, hiring organizations fall behind the market and then struggle to adjust to the reality of compensation structures that impact their entire communications team. I expect posts that are currently targeted for $150,000 will push to the edge of the range, closer to a base of $175,000 with key bonus plans taking the total compensation figure to well over $200,000. At these dollars, heads of organizations will require outstanding performance quickly. Expect more turnover – it’s high risk, high reward at these heights.

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SELECTING A JOB AS A STRATEGY FOR ACCUMULATING WEALTH - AN EXAMPLE

In general, richer and richer offers will be extended to hard-to-find employees. The incentives will need to be more creative than simple salary increases. In this hot start-up market, the risk-taker communicator demands stock options that will quickly appreciate in value. I just spoke with the head of the Internet Group at a consumer/medical Internet startup. The company was nine months old and he had been on the job for one month. Without naming specific organizations, he talked about the many offers he had received and told me why he had made this choice. First, he said he looked at the learning and "credential building" opportunity this post represented. As head of the group, he would create a site that reflected his strategy and concepts. If successful, the site had the potential for establishing his reputation and increasing his value in the marketplace in an almost geometric fashion. Instead of focusing on immediate gain, he was looking for an investment opportunity.

Second, he considered the company’s potential to "win" in the marketplace. The concept was sound, if fraught with complex challenges relating to confidentiality and a multi-tiered customer/client model. The package he negotiated contained a hefty number of pre-IPO shares that quickly converted into substantial value as the company went public. (Remember, he had only been there a month.) Salary was somewhat important but a distant third to the other issues. He was gambling on becoming wealthy with virtually no down side. Within a year, if this didn’t fly, he could be on to the next winner.

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THINKING 12 MONTHS AHEAD -- OPTING OUT EARLY

Washington State is a hotbed of Internet startups, and the forward momentum and sense of confidence that is embodied in his story is typical of the "I can’t lose" mindset. It is a risk-takers paradise with an intoxicating smell of success. The rules about stability and building a career with one company are simply irrelevant -- this is all about creating wealth around a job choice. A year from now all the underlying assumptions may change and it will be time to recalculate the formula for becoming rich. This is a short-timers model and the expectation is that the "winners" will be living an entirely different life and career well ahead of retirement age (late 40ties, for some).

This mindset is typical of communicators in fast growth technology corridors -- Silicon Valley, Raleigh-Durham, the D.C. area, and to some extent, Boston. It is entirely alien to larger, mature corporations who are hiring with the expectation of long-term relationships where a comfortable income is earned for building a career. These organizations are bewildered and out-of-their comfort zone when they decide to bring in communicators with a "start-up" mindset.

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THE CLASH OF CORPORATE EXPECTATIONS VERSUS THE RISK-TAKER'S VALUES

While these companies recognize they need special expertise that can only be found in entrepreneurial organizations, the potential for culture clash when that talent comes in-house is enormous. Moreover hiring organizations find negotiating compensation frustrating. They brand these individuals greedy and selfish when it is time to agree upon salary and additional cash compensation. Hiring organizations are thinking long-term value while the candidate can’t get beyond the next 12 months. If the candidate does "gamble" and accepts an offer, the chances s/he will be with the organization for more than two years is remote, unless his life situation changes and his values more closely align with the company.

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WHAT DOES "NO" MEAN WHEN A COMPANY DECIDES YOU ARE NOT THE "ONE" -- THE DARK SIDE OF THE HIRING PROCESS

One of the most difficult tasks for a recruiter is to tell a candidate s/he is "no longer in the running." Let’s walk through the courtship and break-up.

For every hire there can be 50 rejections. Depending where along in the search the decision is made to say "no," the individual can be mildly affected or seriously impacted. If this is the first time the person has been turned down for a job, it can be devastating.

The Preliminary Stage

At the early stage of a search, a brief description of a position is circulated and a variety of applicants present their resumes. Also, contacts in the industry recommend people they know who are "quietly looking" or who have recently lost their positions. Because a person is without a job, the referral source is empathetic and wants to help -- noble sentiments but rarely helpful to the recruiter. In perhaps only 5% of the situations will the resume even remotely fit job specifications.

The brief job description provides insufficient information for a candidate to judge if s/he is qualified. The recruiter, however, knows precisely what is needed. Despite the lack of information, the would-be contender frequently states that s/he is fully qualified in the covering note, indicating a degree of naiveté to the recruiter. For the search firm or client, there is minimal contact with the applicant. However, as courtesy, job seekers should receive a brief note stating their backgrounds are not a fit, and no reasons need be given. It is inappropriate for an applicant to ask why.

The First Round Interview

If the search reaches the interview stage (either in person or on the phone) and the recruiter is familiar with the hiring organization, there should be preliminary feedback to the candidate. It occurs at the end of the interview and should indicate whether the candidate appears to be qualified. If the recruiter raises concerns, that is a signal that there is probably not a match. The recruiter is laying the groundwork for providing a reason for pulling the candidate out of the race. Rarely does the recruiter wish to reject a candidate in a face-to-face meeting. However, the reality is that by the end of the meeting, the individual conducting the interview has made a determination about recommending the candidate or taking him out of consideration.

At the end of this second round, which is still early in the process, a candidate could legitimately be turned down for lack of appropriate experience. The interviewer saw at least some of the qualifications required for the position in the resume and wanted to screen from a wide pool. However, his goal is to whittle the list down to less than seven qualified semifinalists. The job seeker could have underimpressed the recruiter on several fronts. The candidate will never know if the reason he is given is the whole truth, nor should it matter. It is the recruiter’s goal to spend the least amount of time possible with candidates who are no longer involved in the search. The recruiter will be polite and uninformative. Pushing for more information tells the recruiter you are naïve about the process and not sensitive to the politics of the situation.

Meeting the Hiring Team

If the applicant continues to the next level, a meeting is arranged with the hiring manager and/or his/her team (generally not the most senior officers). The applicant pool is fairly small and each person has been given information about the organization (or has researched that on his/her own.)

The recruiter (under an in-depth, exclusive retainer contract) has provided an analysis of each candidate describing strengths and weaknesses to the interviewing team. The candidate does not know (and there is no way to find out) if he is closest to what the organization has in mind--or if he is a "dark horse" in the competition. However, the candidate can be assured that s/he is qualified, and, at the least, has the basic skills and industry experience do the job.

In this round, some attention will be paid to problem solving and discussion of relevant work history, but the real agenda is cultural fit and personal qualities. These are not issues of fact but of feeling and judgment about who the candidate is. When expressed diplomatically, words used are "style, mesh with us as a team, enthusiasm." Less polite, but real are expressions like, "he doesn’t get it; he’s not bright/fast enough; the energy just wasn’t there; his answers were too tactical; he would be run over by our President instead of adding value, etc."

When telling a candidate he isn’t being invited to the next round, the recruiter is faced with a dilemma. He can’t fall back on a simple, "you don’t quite have enough experience" since only qualified folks have come this far. If this round is all about who a person is, what is the point of providing negative feedback? A person can’t change that.

The recruiter relies upon tried and true generalities. He might say, "Your fit with the culture was not as good as the other candidates. Or, he might offer a partial explanation saying, "Your experience was at the junior end of the range and the decision was made to move forward with more senior candidates…or candidates that have had just a bit more relevant experience." If pressed, the recruiter is not going to say, "you just weren’t strategic enough, smart enough or impressive in the interview." Yet candidates frequently say, "I want to learn from this experience. What feedback can you provide?" If the reason is all about who you are (which is immutable) there is no such thing as constructive feedback. The best advice is accept the explanation and move on.

The Final Round

We are now at the final round and the hiring organization has brought in two or three candidates to meet the "senior team." This elite group has been blessed by the company’s screening committee, references have been completed and the race is on. The finalists are all "winners," -- excellent performers and confident in their abilities. They do not like to lose and usually don’t. Yet only one will get the job. (It actually might be offered to two candidates.) Because this is such a strong group, opinions can be divided as to which candidate should be hired. Usually the differences are about how the job should be approached and which finalist would tackle it in the desired fashion. These are honest differences of opinion. I’ve witnessed serious and thoughtful discussions before a conclusion was finally reached. It can also simply be who was the most impressive.

At this stage, finalists have all invested an enormous amount of psychic energy in the process. If handled properly, s/he knows about the competition. His ego has been flattered but he knows there are other equally strong candidates in the pool. Nevertheless, the news that s/he is not the "one" is a big disappointment. The recruiter must be prepared to spend time discussing the outcome and providing as much feedback as possible. But, what can he say? If the finalist didn’t handle himself as well as the others in the interview and the President (or senior manager) just wasn’t as impressed, that is confidential. The recruiter has been privy to highly sensitive information and he would be violating a trust if specific details of those meetings were shared.

What Can the Recruiter Say?

If there truly were qualitative, stylistic differences that could not be construed as negatives -- that could be mentioned. Ultimately, however, the debriefing is more for

support than substance. The standard answer at this level is, "the cultural fit was simply better with one of the other finalists." In truth, the same sorts of personal characteristics that were important in the prior round could also be important here. It’s just that the bar has been raised and the differences are more subtle between excellent candidates.

As I think about why candidates press for feedback, I believe it is for psychological more than factual reasons. There is a real need for closure. They have invested so much of themselves in the process that it is a great disappointment not to be selected. Yes, there are specific interviewing tips or other tactical advice that can be helpful, but ultimately an interview is about who you are (as I said before).

My advice to a job seeker is to listen to the explanation given and accept the outcome graciously. The recruiter will feel you are a mature professional that s/he will want to work with again. It makes no sense to argue with a decision that is irreversible. In fact that is one reason the recruiter is as vague as possible -- to avoid a pointless discussion. (Save the debriefing for home.) Your turn will come next time.

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