The intense competition for executive talent in today’s market has exploited another facet of the executive hiring process – the treacherous time period between offer and start date. While losing a candidate to a last-minute competing offer was not previously unheard of, the frequency and aggressiveness of incidents happening in today’s market requires CEOs, Boards, and hiring teams to respond strategically in order to compete.
With more executive job openings than qualified candidates, the fight for top talent is at an all-time high. As a result, competing offers and counteroffers are the norm. When strong talent comes ‘in play’ – employers, investors, and CEOs are ready to employ whatever tactics necessary to prevail. This executive tug-of-war has become all too common, and typically initiates on or around the time of an offer, acceptance, or resignation.
Previously, the time between offer and acceptance may rightfully have been the time for CEOs to celebrate and focus on other strategic initiatives. In today’s market, this phase has become one of the most arduous and competitive parts of bringing top executive talent onto the team.
To best mitigate risk, CEOs and hiring teams must change their mindset. Know the fight is still looming, understand how risks may manifest themselves within the hiring process and deploy thoughtful, proactive tactics to meet the demands of today’s talent market.
In this article we identify key areas of risk and explore proactive tactics that can be utilized to mitigate risk and ensure a successful hiring process is completed.
Understanding Potential Risks & Vulnerabilities
To effectively combat risks, you must understand when and how vulnerabilities may appear during a talent transition process.
Former Employers, Bosses, and Private Equity Sponsors: A thorough hiring process almost always involves some form of communication with these entities. Making these entities aware that a talented executive is planning to make a move can also create an unfortunate competitive side effect. Once ‘in the know’ these parties may become rivals for that same individual. Hiring teams must be increasingly thoughtful about the timing and scope deployed in any pre-hiring reference due diligence.
Offer Shopping: In today’s market, candidates recognize they are in high demand. When developing an offer for a candidate, CEOs should operate with the belief that the offer terms will be made known to other parties – be it a current employer, former employer, or competing company. It’s critical that offers are compelling when compared with what the competition may propose.
‘Below Market’ Talent: Inflation is real in today’s market. An increasingly rare find is the qualified talent whose compensation expectations happen to fall below the overall market. Thoughtful CEOs will understand the vulnerabilities that are created when attempting to hire below market. Sturdy offers are always recommended and should be able to hold-up when compared to the market at large.
Pre-Start Communications: Any communication that signals to the outside world that a strong executive is either in-play or about to embark upon a change, poses a risk for a rival to swoop in. Broad public communications, such as updating statuses on social media, press releases, or company-wide email announcements, can have unintended consequences and lead to competing offers. Time invested developing a pre-start communication plan can serve to limit the likelihood of a surprise inquiry from a competing party.
Industry Superstars: Does your diligence tell you that you have rare, highly regarded talent in your pipeline? In today’s hyper competitive market, the stronger the talent the tougher battle you will likely have to prevail in getting them to make a change.
Reference Leaks: Checking references – both official references provided by candidates, as well backchannel references that are discretely obtained without the candidate’s involvement or knowledge – remains absolutely vital in the proper diligence process of a new hire. When it comes to the talent landscape, all references have the potential to turn into a competitor in some regard. In instances where a reference is also struggling to fill key roles within their own organizations, he/she may become opportunistic and try to entice the candidate to join them. Alternatively, reference can become a source of information in their network, notifying others of the potential availability of the candidate and inviting opportunistic rivals a chance to intercede.
Resignation Process: The resignation process will likely provoke a competitive conversation. CEOs should understand that the day a candidate resigns starts a new phase of the recruitment cycle, one for which their attention and involvement is as vital as any other phase in the process.
The time between offer and start date can be turbulent. By approaching the final leg of the hiring process with the same planfullness and intentionality as other phases of the hiring process, CEOs and hiring teams can prepare themselves to prevail in completing the hire amidst today’s fierce competitiveness. With counteroffers, additional opportunities, and legal battles abundant, deploying new tactics can help to mitigate risk. As the market continues to evolve, accessing, recruiting, and retaining top leaders will be pivotal in driving growth and creating long term value for your business. Interested in discussing strategies and best practices for mitigating risk during the hiring process?
Reach out to me and the JM Search team to guide you through the process.