EXECUTIVE RECRUITMENT : Head hunting – Driftnet or spear fishing?

Finding good senior executives is hard enough these days, but having employees who have been primed for top jobs poached to work in competitor’s organisation is nightmare for some companies.
Of course, it’s every senior executive’s dream to get that phone call offering an incredible new opportunity, but not an easy decision to make the change.
The employee may not have been considering move but suddenly they realise they could be fast-forwarded to the top role sooner than anticipated. They’re flattered but still have mixed feelings, torn between loyalty to their current employer, who they may have been with for many years, and excitement about new possibilities.
Meanwhile, the company is blissfully unaware, assuming that all the training and coaching their valued employee has received is enough to keep them waiting in the wings to step up when the incumbent moves on or retires. It’s often not until the employee has made decision that the senior management or board discovers what is happening. By then, it’s too late.
Employers beware, specific search methods of recruitment are on the rise. And chances are, some of your staff are on the hit list.
Signium Executive Search International managing director Maurice Ellett believes traditional recruitment techniques – such as advertising in newspapers and even on the internet – are becoming less effective. He likens them to fishing with net.
“If I run an advertisement, I might get number of fish but the chances of getting the right fish are pretty random. If I put the right bait on the right hook and put it over the right fish, I have better chance,” Ellett says. “It is identifying where these people are based on knowledge and experience, going out and grabbing them and saying ‘here is an opportunity’.”
Even if using specific search, the pool of good candidates is small. The more inflexible company is in its expectations about the type of person it wants, the harder it is to fill the vacancy. But not impossible, says Ellett.
“If I am going out to the market looking for particular individual, it is like spear fishing. I identify where those fish are likely to be, then grab my mask, snorkel, flippers and speargun and go hunting.”
Keeping to his fishing analogy, Ellett says his research (undertaken prior to approaching the target) may also include how the fish will respond and whether or not it has teeth.
“A lot depends on how long it is since they last had meal,” he says.
Swann Group director Don Jaine agrees that advertising is not working and has never been very effective when targeting senior executives. He says they are too busy to read the newspapers and do not put their names on the internet job search sites.
“They don’t want it to be discovered that they are looking,” he says. “They expect to be approached by search firms.”
Jaine says search as means of securing the right candidate has been around since the early 1980s and about three quarters of the roles he fills are candidates he has specifically searched. He rarely gets bad response, unless someone he calls is having bad day.
Sheffield search principal Peter Ross also believes the response from traditional advertising is getting worse.
“There are less viable candidates applying in senior level roles. If you advertise and identify the industry, no matter what it is, some people will say ‘that is not my industry so I won’t apply’,” he says.
“People have to be talked into things. You have to ring people up and say ‘have you considered this job?’”
Ross says the first step in search is gathering information on people who may be suitable for the role. Once potential candidates have been discovered, he calls for chat. “It is call everybody likes to get,” he says.
Ross says recruitment agencies are tending towards search techniques and turning to their databases to uncover potential candidates who have not responded to advertisements.
“But that is pretty blunt instrument,” he believes.
However, Drake executive team leader Stephen Smith says database search and networking do work and disagrees that advertising is becoming less effective.
“I have had massive responses from advertising in the paper in key appointments,” he says.
Many clients he works with dislike the specific search technique.
“I have been approached by clients looking for (specific) people and I have made it clear that is not what I am doing at the moment,” he says.
Smith believes jointly branded advertisements, which name the company seeking an executive and the recruitment agency, make difference.
Smith’s colleague Vicki Kelly, who deals with executive contracting, says companies need to be smart about advertising and use every possible avenue.
“Even casting the net, you get people from left field, somebody you hadn’t thought about,” she says.
The acting general manager for Hudson Recruitment’s Wellington agency, Campbell Hepburn, also says advertising still plays role. High-calibre candidates may respond to an advertisement but overall there are not enough of them.
“Search, in this present market, is without doubt requirement, but there is an ethical dilemma about how you go about the process,” he says.
“Is it appropriate to take [candidates] from client who is giving you roles?”
Ellett says the Association of Executive Search Consultants, to which most in the industry belong, has its own ethical standards. They clearly state that search agents are prevented from facilitating the movement of staff out of their clients’ companies for two years.
“It doesn’t matter whether the individual comes to us or we go to the individual, if they are currently employed by client and if we don’t have the client’s permission, we don’t facilitate the movement,” he says. “How can we recruit for the company and take away resources in the same breath?”
Employment law specialist and partner at Kensington Swan, Susan Hornsby-
Geluk says there is nothing to prevent any company working with any recruitment agency to approach an employee of another company to come and work for them. However, she warns, ‘restraint of trade’ risks could be lurking like sharks.
Restraint of trade is clause in an employee’s contract which prevents them working for competitor organisation for period after terminating employment. In order to be enforceable, the employer needs to prove it is reasonable and necessary to protect legitimate interest that employer has. This might include confidential competitor information, special client relationships or knowledge the employee has which would make it unfair for that employee to go to competitor. Typically, restraint of trade clauses last three to six months.
Hornsby-Geluk says the key for employers headhunting an employee from competitors is to be ignorant of the individual’s restraint of trade.
“If an employer is headhunting an employee and knows they have restraint of trade, yet actively encourages them to breach that restraint of trade, they could be sued for inducing them to do so,” Hornsby-Geluk says.
An added complication to the recruitment process is that those who respond to executive job advertisements may be doing so for different reasons: they may not necessarily be wanting change, instead looking to leverage their current employment situation – or they may have few offers they are considering – meaning she/he who hesitates may lose as the candidate is snapped up by another employer.
One often mentioned solution to the labour shortage – recruiting executives from overseas – remains difficult with recruitment agencies saying New Zealand has to seriously consider ways to become more competitive in the global market.
Hepburn says the problem lies mainly at mid to senior level – positions offering salaries under $100,000. Where previously executives would go overseas for 18 months then come back, they are now staying away longer or not coming back at all. Recruitment agencies need to work more strategically with government to look at the i