Lauder Beaumont Associates

Here’s the scenario: you spend the best part of four months working with your preferred headhunter to find the ideal person for that strategically important role.  Finally, everything falls into place, the candidate accepts your offer and all that remains now is for them to resign at the end of the month, serve out their notice and join you. 

Then apparent disaster strikes: the department head who was a key influencer in getting this person on board resigns. They’ve been headhunted themselves; this is the real world, it happens!  Now what?  How do you break the news to the top performer who is about to join you?  Will this give them the jitters to such an extent that they will walk away from the opportunity?  Are you going to have to start all over and kick off a fresh search? 

This is something that I have had to deal with more than once in my time as a headhunter and it provides valuable lessons about how to approach an executive search assignment.  Headhunting assignments should be thought of and managed as mini-projects.  Any project manager will tell you that a key factor in successfully delivering projects is risk identification and mitigation.

So this is just another risk that needs to be managed but surely this is impossible to mitigate?

It really depends how the job has been sold to the candidate or put another way, what the candidate bought.  There is always a combination of factors that influence a candidate to accept a position and understanding these is key to mitigating the risk of a change in circumstances changing their mind.  There are some that are more difficult to mitigate than others, e.g. if you were to reduce the salary offered by 20% there may well be no way back.  The head of department leaving will more than likely scupper the deal if this was a key influencing factor for the candidate.

This is why it is so important that you or your preferred headhunter sells the job, the key challenges to be overcome and what success looks like (above everything else).  Top performing talent is motivated primarily by what they can achieve in a role and the future opportunities that this could present.  Yes, of course factors such as money are important but they should never be the key driver when selling a role (to attract the best you must pay accordingly but this must not be the key motivating factor for someone to join you).  Department heads and members of the leadership team could change at any given time so is it sensible to sell a role on the basis of who heads up the department currently? 

Top performing talent knows such things are variable and they are unlikely to ‘buy’ on that basis. The key is to make sure that the key objectives for a role are linked to departmental and organisational goals.  The objectives and challenges in a given role remain unchanged whoever is at the helm.  In most cases, a meeting with the new department head and reconfirmation of the key challenges and objectives of the role are all that will be required to get the deal back on track.

So to avoid last-minute disasters, make sure your candidate is accepting the offer for the most important reason – to take on the challenges of the role - not because they “bought into the boss”.

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When I go and meet a client to take a new brief for a role it’s not unusual for them to say, “I would like to see a range of candidates; that will help me shape my thinking and identify the right person for the role.”

This may sound like a reasonable way forward, particularly for a new role.  Hiring managers often tell me that they will shape or design a role for a great candidate.  For me however, it sets alarm bells ringing…but why?

A company should only ever hire anyone to improve their business results.  If you can’t define the improved business results that you want to achieve by making the hire, I would seriously question why the hire is being made at all.  This may seem obvious but sometimes hiring managers hire because they have allocated headcount or because they are replacing someone who has left the business.  It may be perfectly valid to hire but you really must look at what you want to achieve before you reach out to the market or start interviewing candidates.

When you understand what business results you want to achieve, you can then start shaping the role. This should form the basis of your job specification.  Too many job specifications quickly get into a list of ‘wants’ that the candidate should posses when the first step should be defining what success in the role looks like, the key objectives for the role and the key challenges to be overcome to achieve success in the role.  Also, it is vital that the objectives for a role are linked to departmental and company objectives, otherwise achievement of the objectives will count for nothing, i.e. they won’t actually contribute to the overall success of the department or company.

I find when I take my clients through a process of looking at the improved business results they want by making the hire, the penny often drops.  The shape and design of the role becomes much more obvious and as a result it becomes far easier to identify the type of candidates that are capable of achieving the key objectives.   The LBA Hiring Management System™ provides templates for sourcing profiles, actually looking at a number of scenarios of where the person might be working now and what they may have accomplished to date in their career.  The point is to understand and get very specific about a limited number of people who could achieve success in the role and then consider why the role would be attractive to them.

Top performers don’t go along for interviews for the experience, only job hunters do that and it’s  waste of time for everyone.  To get top performers to the table, you must excite them about the challenges of the role, clearly lay out what success in the role looks like and outline the opportunities that being successful in the role could open up.

My advice to hiring managers is: don’t spend time interviewing candidates to help shape your thinking about a role.  Invest time in what you want to achieve by making the hire and this will help you get very specific about the people you should be interviewing.  The interview should be used to assess the propensity of the candidate to achieve the key objectives of the role and be successful, not to shape or design the role.

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No is the simple answer.  The problem about countering a counter offer is that you immediately make the appointment all about the money.  As I’ve said many, many times before, if the motivation for anyone coming your way to fill your role is purely about the money, you should run as fast as you can in the other direction.

This point comes up time and time again and it does lead to a fair amount of confusion. To clarify; I’m not saying that you won’t have to improve pay and rations if you want to attract top performers.  They understand their value in the market and won’t take you seriously if you are not prepared to pay the going rate; in fact, you will need to offer a package at the top end of the range for the role.  What I am saying is that it has to be about more than just the money.  What I’m actually looking for is positive reasons why the candidate wants the role, something that excites them.  I’m less keen if the role removes negatives in their current position, e.g. “My current commute is getting me down” or “I don’t see eye to eye with the new head of department.” Both are valid but I’m looking for more.

The skilled headhunter doesn’t discard the negatives in the candidate’s current role, they might come in useful later but there needs to be more if  a candidate is to be taken forward with any confidence. e.g. “Challenge ‘X’ really excites me” or “I’m fascinated about aspect Y or Z in this role, it’s something that I’ve been looking to get into for a while now”.

Why are these positive aspects so important?  Because these are things that counter offers find it difficult to counter.  Not impossible to counter;  I have known companies desperate to keep hold of their top performers redesign a role to include key aspects that attracted them to a new role.  However, this is rare, each company is different and there are different challenges to overcome and this makes real challenges that excite the candidate difficult to replicate.

Most counter offers are about money.  I read quite a lot about stories of unscrupulous behaviour within the recruitment industry and I would agree that there are a few out there who unfortunately tarnish the reputation of the industry.  However, I have also encountered some unscrupulous candidates who go job hunting or become receptive to calls from headhunters purely to get some leverage for a hike in salary.  Some people really do go to the lengths of interviewing for and securing an offer for a new role with no intention of leaving their current employer – they are actively seeking a counter offer.  A dangerous game in my view but that’s a whole different topic.

Fortunately, it’s far more common for a candidate to hand in their notice with the intention of moving on and for their employer to come back with a matching or even better offer than the new role.  I prepare my candidates to expect a counter offer and remind them of the reasons that they were motivated by the new role (the other things apart from the improved package) in the first place.  We may also talk about some of the negative aspects of their current role but these tend to be more easily ignored when the prospect of an improved package is in play, they are seldom powerful motivations for a candidate to ignore the counter offer.

Occasionally, a candidate will come back to me and ask me to inform my client that they have received a counter offer from their current employer and to seek improved terms.  I have an obligation to my client to discuss this with them but I don’t recommend that they counter the counter.   The time to negotiate regarding the offer has passed, and all parties agreed and were comfortable at the time the offer was accepted.  What is to stop the exiting employer countering your counter?  This is not the time to get into a bidding war.  The candidate should be reminded of the reasons you want them on board and the opportunity the role presents.  You should state that you believe that the original offer was a good one.  If the candidate takes the counter offer now, breathe a sigh of relief, you had a narrow escape.  This candidate wasn’t who you thought they were and you would probably loose them anyway when the next highest bidder came along.  If you have managed the hiring process effectively, see the LBA Hiring Management System™ http://www.lauder-beaumont.com/our-approach   , the candidate will more often than not accept your offer and turn down the counter.

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I was fortunate enough to be taken out by the HR Manager of one of my clients this week who wanted to show his appreciation for the work we had done to help him secure the services of a top performer.  After dinner, he explained to me how he had put his neck on the line by insisting that the best way to get the person they needed was to use our services.  We had not worked together before and I could see from his perspective that although he had done his research, checked our credentials etc., there was still a feeling that he was taking a bit of a leap of faith. 

The issue for my HR Manager wasn’t the 25% fee that we charge (his company had paid more to other agencies).  The retention fee was linked to the main issue – the risk that we just didn’t deliver.  He had been told in no uncertain terms that his responsibility was to get ‘the right person’ but there was no support from the leadership team for putting all their eggs in one basket and retain the services of a headhunter that they had not used before.  The fact that they would have to pay an up-front fee before we even started the assignment just heaped the pressure on the HR Manager – he had better have made the right decision!

In the face of such pressure and lack of support for his approach from the top, it would have been easy for the HR Manager to go against his better judgement and get a number of agencies to work on the assignment on a non-exclusive basis.  However, the HR Manager confided in me, he had already been down this road but they had not found anyone who was remotely close to being right for the role.  He was stuck between a rock and a hard place, it was his problem to fix but he could gain no support within the organisation for retaining the services of a headhunter. 

You could say the HR Manager was backed into a corner so he came out fighting.  I had already held a meeting with him and his boss and explained how we would approach the assignment.  I had stated that the search wouldn’t be easy but that I felt confident that the assignment was achievable but they needed to be realistic about timescales.  Yet more heat for the HR Manager, he was under pressure to get someone on-board quickly but again he was brave enough to stick to his guns and presented the project plan that I had produced for him which showed an elapsed time not quite in keeping with the leadership’s timescales. 

Luckily for my HR Manager and, less importantly, Lauder Beaumont’s reputation, the story does have a happy ending for the HR Manager.  He is now enjoying the pat on the back he deserves for choosing an approach that I am delighted to say delivered the desired outcome.

But what I discovered when talking further with the HR Manager was his real fear.  Not that we wouldn’t find someone (as they had failed to do previously) but that the person they did find and hire would turn out not to be the ‘right one’.  He was smart enough to realise that the congratulatory pats on the back would soon turn to awkward glances if the chap they hired turned out not to be the right person.

This was my first chance to provide any real comfort.  I told him that if I had any concern it was that we would be able to attract the right individual for the role.  I knew we could identify top performers capable of doing the job but attracting them is always a challenge.  What I was confident of was that the person we had identified would be fantastic in the job.  The reason I could be so sure is because they followed the LBA Hiring Management System™  http://www.lauder-beaumont.com/our-approach/overview/            almost to the letter and the statistics prove that the chances of getting the right person for a role are dramatically increased if the system is utilised.  I explained that this led me to have little fear about the competency and fit of the person for the role.  I also explained that I felt so confident that I was prepared to offer a 12-month, 100% guarantee – Should a candidate be terminated within 12 months following commencement of employment for any reason that reflects on their competency or suitability for the role, we will immediately begin a search to find another suitable candidate for no additional fee.

I believe this guarantee is unrivalled in the industry.  To provide further comfort, Lauder Beaumont now only charges 25% of the total estimated fee as a retainer and the remainder on accepted offer. 

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As a responsible hiring manager, you naturally protect the commercial interests of your company. Most companies have a limited recruitment budget and before you engage a headhunter, it’s a good idea to evaluate the recruitment options and explore the most cost and time effective way to secure the hire you need.  That’s why headhunters are typically only used to fill high-level and hard to fill positions.

But let’s assume that that you have assessed the options and decided that you need to retain the services of a headhunter.  Terms are agreed and the search is kicked off.  Three weeks elapse and it proves to be a challenging search: the headhunter informs you that it is going to take a few weeks of in-depth search to identify and attract suitable candidates.  Then a minor miracle happens, a CV from someone who appears to be ideal for the role lands on your desk. Everything looks right, you can’t believe your luck and you sense that right there in front of you is the CV of your new hire. 

Now here’s the dilemma: you’ve already retained the headhunter and paid a third of the fee.  You have been receiving weekly reports and you know that the search has been in-depth.  You are tempted to pick up the phone to your headhunter and call off the search.  I recommend that you resist this temptation.

Firstly, all you have seen so far is a CV.  There is no guarantee that the person will live up to the CV or that it provides an accurate reflection of the person’s achievements.  According to research 65% of people lie on their CV.

Secondly, it’s unlikely to save you any money.  Check the terms and conditions: if you’ve retained the services of a headhunter and you fill that position by any means (usually within a certain time period) you are due to pay the whole fee anyway.

Thirdly, a headhunter that is worthy of the name is doing far more than collecting CVs and evaluating candidates on that basis.  It’s possible that they have already seen the CV of this individual and perhaps even rejected them.  In some cases, a candidate will be alerted to the opportunity by the headhunter and when rejected, decide to send the CV direct to the company and hiring manager.  Whilst rare, it does happen.

If you receive a CV directly from a candidate that looks like a potential fit for the role and you have already instructed a headhunter, the only course of action you can take is to pass the CV to the retained headhunter for consideration. 

This may not sit easy for some; it doesn’t seem right that the headhunter could fill the position with someone you found rather than them.  However, the truth is you didn’t find the candidate, they came to you.  When considering the options of how to recruit for the position, how much time did you spend thinking that if you did nothing, perhaps the ideal CV would land on your desk?  Obtaining a CV or identifying a candidate is only 20% of the job anyway if the headhunter does the job properly.  Hand the CV over and let the headhunter do the job that you hired them to do.

A word of warning.  If the source of the CV is a recruitment agent, you should send it back immediately and state that you do not accept the CV from this source and that you have retained a headhunter who are the only ones authorised by you to introduce this or any other candidate.  In the unlikely event that you do end up hiring this individual you will avoid any claim from the recruitment agent for a fee in addition the one you are paying the headhunter.  Do not, in these circumstances, forward the CV to your retained headhunter.

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The most popular type of interview in use today for executive level hires is the behavioural or competency based interview.  This type of interview assesses how a candidate behaved in the past as an indicator of how they will approach situations in the future.  This in turn is used for predicting performance and future success in a given role. But is past performance really a reliable indicator of success in a new role?

Logically, this seems like a good approach but is it really reliable?  The alarming rate of executive hire failure suggests that this approach is either not being applied effectively or that it doesn’t work.  So what are some of the pitfalls?  Where does this approach fall down?

Firstly, people are not robots.  Just because they behaved in a particular way in the past does not necessarily mean they will do it the same way again in the future, whether their approach was successful or not.   If people recognise their past behaviour didn’t achieve the results they hoped for, there’s every chance they will change their behaviour.  Is the candidate marked down because their behaviour didn’t get the result they were looking for or marked up because they recognised changes need to be made?–i.e. they learnt from past mistakes in order to improve (a valuable skill).

Are any two situations ever the same?  Does repeating behaviour in one situation mean that you will get the same successful outcome in another?   

I’ve seen many organisations looking enviously at competitor wins and decide that if they can poach their competitor’s sales superstar that it will transform their business.  Sometimes it does but just as many times the superstar sales performer headhunted from the competition fails as spectacularly as they succeeded in the past.  Did the sales person start behaving differently when he arrived at the new company?  No, there were just a different set of variables at the new company and the way the sales person behaved in the past just didn’t achieve the same result in the new company with a different set of circumstances.    

I think the biggest issue with the behavioural interview approach is that if the candidate is reasonably smart, the questions are easy to prepare for.  They know what’s coming.  Just think ‘STAR’ and apply it to every answer, candidates are coached. Situation, Task, Action, Result.  The approach is more likely to bag you an excellent interviewer rather than a top performer.

So is there a better way?  If we can’t rely on past behaviour and performance for future success, what can we do?  The answer is simple: stop looking to the past and look at the present.  Why not take real, present day problems and challenges and get the candidate to tell you how they would address these.  Give them real not theoretical situations. This will flush out candidates with smart answers and no substance.  It will stop you having to make tenuous links to situations your candidates have encountered in the past to your own situation.  It will significantly increase your chances of making a successful hire.

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First thing first: does the process need improving?  Take a look at the stats below from a variety of sources and decide for yourself.

• 70% dissatisfied — 70% of the external customers (applicants) and 28% of the internal customers (hiring managers) indicate they are dissatisfied with the hiring process (Source: Staffing.org).
• 50% customer regret — 50% of the processes users (both managers and new hires) later regret their “buying” decision (Source: The Recruiting Roundtable). In addition, 25% of new hires later regret taking their new job within one year (Source: Challenger, Gray)
• 46% turnover — 46% of new hires leave their jobs within the first year (Source: eBullpen, LLC) and 50% of current employees are actively seeking or are planning to seek a new job (Source: Deloitte).
• 46% failure rate — 46% of new hires must be classified as failures within their first 18 months (fired, pressured to quit, required disciplinary action, etc.) (Source: Leadership IQ). In addition, 58% of the highest-priority hires, new executives hired from the outside, fail in their new position within 18 months (Source: Michael Watkins).
• Only a 19% success rate — only one out of five of the process output can be classified as unequivocal successes (Source: Leadership IQ).

I think the evidence is compelling: the hiring process needs some work! 

Before you start improving anything, get an accurate picture of the current situation. When I ask heads of recruitment about how effective their hiring process is, I’m bombarded with statistics about cost per hire, interview to offer ratios and offer to acceptance statistics. Cost per hire is a particularly meaningless number in my view; surely the quality of hire is of some relevance here rather than how cheap it was to acquire them? 

The point is none of this helps an employer measure how successful that particular hire is.  You need to define some parameters for what constitutes success. A place to start is to measure whether the hire is still with the organisation 18 months on.  However, in my experience, very few organisations record or analyse this, therefore they don’t know what their failure rate is and don’t know how any change to the hiring process impacts results.  Part of the problem is that 18 months is a long time to wait to find out if the hiring processes delivered a successful outcome.  Interim measurement at 3, 6, 9 and 12 months will provide more immediate indications and it should not be too difficult to gather retrospective data, e.g. looking at the hires made 18-24 months ago and what number are still with the company.

Does that mean once you have some useful data about how successful or unsuccessful your hiring process is, you can start looking at the process and find ways to improve it?  Well in theory yes but in practice…, mostly no.  Why..? because often the process is not standard, particularly for executive and senior hires.   Hiring managers have very often been doing their own thing, and there is no systematic approach to hiring.  It now becomes pretty much impossible to make any correlation between successful hires and the process employed to get them on board.  You might find out that one hiring manager has a better track record than another but perhaps his ‘gut instinct’ about people is just better than others or more likely he just got lucky!

The single biggest reason for hiring failure is the lack of a systematic approach, a standard, repeatable process or set of processes that are applied for each and every hire.  At LBA we have developed the LBA Hiring Management System™ which is proven to deliver substantially better results.  The system is not perfect (86% success when last measured) but it delivers results well above the average and it is something that we can improve upon.  We can take a business process management approach to improving the system. 

I would be fascinated to know what a business process management or six sigma consultant would make or the typical hiring process.  Perhaps it’s time to find out or alternatively you could talk to us about implement the LBA Hiring Management System™ – we would be glad to help. 

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Most hiring managers get so hooked up on their wants and needs when they are making a new hire that they forget that top performing talent isn’t actually forming a queue outside their door waiting to get in.  Sure, there are always people knocking but the most sought after candidates, i.e. the top performers, are unlikely to be amongst their number.

Usually, when I go to see a hiring manager about a new assignment, they quickly warm to the task of telling me what they want and usually throw in a dose of what they definitely don’t want for good measure.  It’s great that a hiring manager has definite opinions about what he needs but what about the needs of the top performing talent that they are looking to acquire?  I’ve often finished my first cup of coffee and a refill before I get a chance to say, ”thanks for that insight; I’m going to need a lot more information about the role, key challenges and the potential profiles of suitable candidates in due course but before we discuss that, can you tell me why a top performer in your industry would want this role?”

I actually remember the first time I asked this question back in 2004 and the UK Sales & Marketing Director of this particular company looked quite taken aback, as did my young but brilliant colleague who thought that I had overstepped the mark in terms of acceptable questions to ask a hiring manager when taking a brief.  I did get an answer of sorts from my client which was quite impressive considering he had clearly given the matter little thought previously.

The point is that hiring managers get so focussed on who and what they need in a position, that they forget that to attract the best talent (I have yet to be asked to find a middle of the road performer) you have to focus just as hard on selling the opportunity to the potential candidate.  Despite these tough economic times, the vast majority of top performing talent is very much employed.  In fact, effectively selling the opportunity is more crucial than ever because people are less likely to move jobs when economic conditions are tough and unemployment is high; taking a new role always represents a risk and when the job market tightens up people become more risk adverse.

When selling an opportunity there are two key aspects that are of prime importance to the potential candidate: the company and the opportunity.  If the candidate perceives that it’s a great company, you may not need to sell the opportunity quite so hard although the opportunity has to be real and ‘right’ for a successful marriage between employer and candidate.  The opportunity is of greatest importance.  Top performing talent seeks opportunities to grow, develop, expand, take on new challenges, gain new skills, work with other top performers, etc, etc.  (A word of warning, steer clear of providing an opportunity just to earn more money.  The package will almost certainly need to be an improvement but on its own, an opportunity to earn more money isn’t enough).

So next time you are looking to hire top performing talent, don’t purely focus on what you need.  Remember that your potential new hire has needs too!

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The honest answer is that the headhunter will either be all over you like a cheap suit or will more than likely never get back to you.  The headhunter will chase you hard if he/she (to keep it simple will use he/his from now on)  thinks you are the answer to his current challenge, i.e. helping him fill the client vacancy he is working on, either as a candidate or as a source for finding the right candidate.  Either way, you won’t need to ask this question because the headhunter will chase you hard.

If you need to ask the question, the answer will probably be never!

Headhunters work for clients not candidates and unless you are the answer to his current challenge, you won’t get a call back.  That’s why I tell people if you want to get on the radar of headhunters, be a source of candidates if the role isn’t right for you or you are not right for the role.  Headhunters are far more likely to build a relationship with you if you can help them by being a source to find others.  If not, you’re unlikely to get their attention for very long because the chances of you being a great match for their next assignment is so slim that it makes no sense for them to build a relationship with you. This may sound harsh but when good headhunters or their researchers are searching for an open position, they may make 70+ contacts per day and it would be impossible for them to build relationships with all of those people.  In fact, they are trying to qualify very quickly if you are a possible candidate and if not, they need to move on (unless you can help them find someone else who is suitable of course).   The exception is when a headhunter works in a niche market and is likely to have several more assignments in the same sector, so even if you are not right then, he may keep dialogue open and park you for future assignments.  In this case, the next time you hear from the headhunter will probably be if he thinks you are a possible match for his next assignment or that you might know someone who is.

The confusion comes because people think headhunters work like recruitment agents.  True headhunters do not, they only work for clients.  Agents rely on a stream of vacancies from employers (usually not exclusive to the agent) and a steady stream of candidates to fill vacancies.  They need a steady stream of both to match and make placements so agents are more likely to get back to you.  You might be a match for several of their current vacancies or they can see you being a match for future vacancies, e.g. a company they know that takes people on with your type of skills.  The headhunter has a completely different focus: finding the exact match for the vacancy that his client has assigned to him.

So if you are waiting to hear back from a headhunter, don’t hold your breath!

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