It’s all about jobs these days. President-elect Barack Obama says he wants to revive the economy through a job-creating public works plan on a scale unseen since the building program of the interstate highway system in the 1950s. His ideas were outlined in the weekly radio address following the Labor Department’s announcement that employers cut 533,000 jobs in November - the most in more than three decades.
Change at the Top
Now, facing a slowing economy, a growing number of companies will be navigating the downturn under new leadership. Whether it’s a company choosing new leadership to guide it through the turmoil or a CEO finding a more secure position, the current recession is contributing to higher CEO turnover. In fact, recent data from Liberum, a research firm focusing principally on management intelligence, issued a statement saying it expects executive turnover numbers to increase as we head into winter. The firm also notes the Obama administration may also portend for more change at the top of many corporations that continue to fail to perform.
CFO turnover is also on the rise. CFO departures, jumped to 17% last year – up from just 11% the year before, according to Mercer Research. Translation: more than 25% of companies hired a new CFO last year, sometimes more than once. Experts agree, higher turnover will likely continue along with greater CFO accountability. In short, amid the recession high turnover in the C-suite is likely to persist.
Executive search firm, A.E. Feldman, says CFO jobs are opening up. Demand is already mounting for CFOs who can manage a balance sheet and get funding for growth opportunities, CFOs who know the debt markets and Chief Financial Execs who are strong on valuing assets. Flexibility and the ability to adapt to the dynamics of the market as the crisis unfolds are also critical. In short, capital markets experience is weighing more heavily in CFO recruiting. A.E. Feldman also reports demand for CEOs is on the rise. The firm notes that among the CEO jobs opening up are opportunities for Chief Executives with proven records of running infrastructure companies, particularly water, waste water, alternative energy and green technology.
Advantage of Contingency Search Firms
Right now, contingency search firms may be an executive’s best option for a high-level job search. Carol Schwam, CEO of A.E. Feldman, says, “Currently many companies are opening up high level positions to contingency firms to save the money spent on retainers. The old expression ‘when times get tough, the tough get going’ is true. We happen to love what we do and are always driven to win. Clients now have nothing to lose and everything to gain from going contingent.”
In a retained search, the client enlists the help of one recruiting firm to conduct the search on an exclusive basis. The firm is paid throughout the search process. That means when a company retains an executive search firm to fill a particular job, it is paying for the process of conducting a search. On the other hand, contingent searches are hired on a non-exclusive basis. Payment is made when the firm’s candidate is hired. Since fees are not collected in advance, a contingency recruiter has no assurance of being paid unless a successful placement is made.
Contingency recruiters compete with retained firms to locate the best person for the job. The firm that finds the talent first wins. It’s that simple. This is true even for high-level searches. Schwam says the belief that contingency firms do not make high-level placements is simply not true. “This is purely a myth. If you can access or locate talent, are bold enough to introduce talent to corporations, and have excellent client relationships, you can make those high level placements. If the client trusts you, the client can save a great deal of money in retained fees.”
Mitch Feldman, President of A.E. Feldman, adds, “Contingency recruiters have the mandate to work harder to headhunt for their client,” he adds, “They have a fearless instinct that retained recruiters may not understand.”
Thinking Out of the Box
Challenging economic times call for ingenuity when it comes to the job market. And a contingency firm may be able to offer senior level candidates something that other search firms can’t. “These times call for being open to new ways of thinking. Smart executives must be open to being more creative” says Schwam. She adds that, “Good recruiters are proactive and constantly seek out talented executives and companies where they can make vital contributions…but great recruiters are always thinking outside of the box. Contingency firms provide an environment where creative thinkers and entrepreneurs can thrive.”