Thursday, July 26, 2012

Shootings and Sanctions

Decided to take a break from writing the final installment of the “Thanks For Wasting My Time” series. The Colorado shootings and the latest from Happy Valley deserve some attention. There are old posts out there related to both subjects: “Happy Valley” (Nov 10, 2011) and “Why Are We Shocked” (Jan 15, 2011).

“Why Are We Shocked” was written after the Giffords/Tucson shootings. I closed with these words:

“Why are we shocked when a mentally ill person commits a violent crime? Why are we shocked when we find out that a violent act was committed by someone “under the influence”? Why are we shocked that someone did not do something sooner when all the signs were there? Why are we shocked? BECAUSE WE CANNOT FACE REALITY. We cannot face the reality of a problem that is so huge and so unmanageable, that we know it will happen again. So we pacify ourselves by agreeing to “tone down the rhetoric”, to engage in “more civil discourse”, to be nice and respectful, to not use violent metaphors as we compete in politics, sports and commerce. We agree to tip-toe through the crazies and pray that we are not their next target. Why are we shocked?”

Considering this latest incident, I can only say that WE MUST FACE REALITY. While a nutjob like this guy in Colorado might have hit the theater with homemade explosives had he not had guns, the REALITY IS that he did have guns…automatic weapons capable of firing a lot of rounds really fast. Thankfully, his assault rifle jammed or more people would likely have died. The REALITY is that we don’t need people owning these types of weapons. I have guns…revolvers, shotguns and bolt-action rifles. I usually hit what I’m aiming at and I don’t need extra firepower for sport or self-defense. It’s just too easy for any fool to purchase guns that are designed to spray massive amounts of lead in seconds. I know…Guns don’t kill people, people do. It’s just that some guns enable people to kill more than they might otherwise be able to do. Let’s at least address this issue. Will it completely stop crazy people from going on a rampage? No, but it will take some weapons out of their hands.

Then there is Penn State. Other than a few blindly loyal Penn State supporters, I may be the only person in America who thinks the NCAA sanctions were overkill and inappropriate. Here is the REALITY. A terrible and horrific crime has been committed. The guilty parties will be punished if not in criminal court, certainly in civil court. The saddest reality is that victims can never be made whole and their lives are forever ruined. Nothing can make up for that. But they will ultimately receive significant compensatory damages that will do a lot more for them and their families than any sanctions imposed by the NCAA. The reality is that the NCAA should have stayed out of it. But they caved in to public opinion and media pressure. If Penn State chooses to take down Joe Pa’s statue, it’s probably the right call and certainly theirs to make. Should the NCAA have taken away Penn State’s wins from 1998-2011? Taken away scholarships, no bowl games for four years? I’m not so sure. It has symbolic value and perhaps a victim somewhere feels better for it. But, in my opinion, it’s more about the NCAA trying to make the NCAA look good. And we can only hope that some judge or jury in a future civil litigation will not reduce a victim’s award because “poor Penn State has already paid so dearly.”

Penn State is suffering and will suffer for many years. I said back in November, that because Penn State chose to look the other way their “recovery will be long and painful and, perhaps never totally complete.” That certainly appears to be the case. But let’s hope it’s not just because their football team will be less competitive for a few years under the NCAA sanctions. I think Paterno, his coaching staff, the leadership at Penn State and countless others in the community including law enforcement officers were uncomfortable with Sandusky and his relationships with the boys in the Second Mile Foundation. But like a family protecting one of its own, they chose to believe the best about Sandusky and the worst about the boys and the parents who expressed fear and concern over Sandusky’s behavior. In the light of day and with all of the facts in the open, it’s clear that Sandusky was not just being given the benefit of doubt; but that the people around him were deliberately deaf, dumb and blind in not recognizing what he was up to. They should and will face the full measure of legal consequences for their failure to act. But when it comes to the sanctions, the NCAA should have punted.

Wednesday, July 18, 2012

Thanks For Wasting My Time (Part 3)

Last week we wrote about how often clients really aren’t sure what they want. Even if they have a job description it may not go beyond outlining broad areas of responsibility, basic qualifications and a compensation range. This week we’ll look at those clients who know what they want (or eventually figure it out), but aren’t willing to pay for it.

The Number One reason why clients are not willing to pay for what they want is that they cannot make it work within their existing compensation structure. Called “salary compression”, it boils down to this…it creates a lot of problems if a company brings in people from outside and pays them more than they pay their existing employees. Even if the company creates a new job level and title to justify the difference, employees soon figure out that the new hire is basically doing the same job they are doing and getting paid a lot more to do it. But isn’t compensation information confidential? How would they know? People talk. They will find out. They always find out.

So if the client cannot “afford” to hire the talent they really need without upsetting their current employees; what do they do? They call the “headhunter genie” who can surely find A+ talent for B- compensation. That’s why our fees are so outrageous, isn’t it?(No, actually our fees are what they are for a variety of reasons. Come to think of it, that’s a great subject...think I’ll write about it when I finish this series).

The reality is that there is no free lunch, there is no Santa Claus or Easter Bunny and Elvis is way dead. A headhunter may well find you A+ talent for something less than A+ compensation, but likely it won’t be much less and don’t expect more than one or two candidates. Compensation tends to find its competitive equilibrium. Unrealistic expectations with regard to compensation, whether the client’s or the candidate’s, is always a red flag for headhunters. When it is clear that the client is unwilling to step up to the required level of compensation, we only have two options: walk away from the search assignment or convince the client to lower their expectations.

The second reason that some clients are not willing to pay for what they want is that they are just cheap. Add patience along with tough negotiating skills and you are in for a long, painful search assignment. Some companies just operate that way, especially in the transportation and logistics markets. It’s a thin margin business where companies are fighting for fractions of pennies. A company cannot afford to overpay for anything and they are always shopping for the best deal. I get that and I’m ok with working under those conditions, up to a point. If the client is way too cheap and way too picky, it's just not worth it.

As noted above, our fees also play a factor. Most companies hate to use a search firm. They think our fees are too high and they should be able to find people without using us. So when they do resort to using us, they try to rationalize it by either going low on compensation or high on candidate requirements. Many times, after we’ve worked a search for weeks trying to find that perfect candidate at the right price, the client will hire someone on their own or promote from within. The person they end up hiring will meet few of the requirements we were given. But the client did not have to pay a fee.

Buying talent on the cheap is not a good long-term strategy. I understand the “salary compression” issue. Some of our clients are in low-cost markets or markets where there is a large supply of talent. They have been able to build a high-performing organization while maintaining a very conservative approach to compensation. If they have to go outside and hire, it’s tough. Usually we end up striking a balance between job requirements and compensation. Ultimately we may have to find a candidate who has other reasons for wanting to join that company in that location. It’s not always all about the money.

But if a company is consistently hiring on the cheap relative to their competition, watch out. These tend to be the ultimate time-wasters and search firms do neither themselves nor their candidates any favors by working with such companies.

Next time we’ll look at perhaps the mother of all time wasters…too many people involved in the hiring process.

Monday, July 9, 2012

Thanks For Wasting My Time (Part 2)

Now we get to the biggie when it comes to delays and indecision in the search process…The Client (aka The Employer, The Company, The Hiring Authority.) If you want to know where job searches go to die, just follow some companies through their interview and hiring process. What you will see are missed interviews, rescheduled interviews, changing job requirements, low-ball salary offers and poor communication within the organization and with the candidate/search firm. You will likely see a lot more, but when you boil it all down the problems are related to three major issues:

_The Client does not really know what they want.
_The Client is not willing to pay for what they want.
_The Client has too many people involved in the process.

Each of these issues has multiple “issues” of their own, but we see common themes across many different organizations.

So why would a Client not really know what they want? First it’s worth noting that many clients know exactly what they want and are consistent throughout the search process. Headhunters enjoy working for these clients and give them priority. But a significant number of clients either don’t know what they want or change their minds as the search progresses. Headhunters can be slow learners at times, but eventually they figure out who these clients are and work with them accordingly.

And then there are job descriptions. The client will say that if you are a capable search firm, their job description contains all you should need to know about the position. Unfortunately, most job descriptions are too general, too “HR-ish” and too “buzz-worded”. Best case they may provide a first level filter for sifting through candidates. When it gets down to interviewing and making critical decisions, the Client may still not really know what they need from the position. So they hire the candidate “everyone felt good about”. Which often means they end up hiring a great candidate but for the wrong job.

So for the search firm; dealing with a Client who does not know what they want becomes a process of Q&A, investigation and what-if’s. If we are fortunate enough to be dealing with the ultimate hiring authority and decision-maker, we may be successful. But if we are dealing with HR or a hiring authority that really doesn’t have much authority and is not THE decision-maker, the odds of success go down considerably. And the time investment necessarily goes up. We end up playing show and tell with a variety of candidates; and usually not the highest quality, under-the-radar candidates who tend to resist being “demo-ed” for poorly defined job opportunities. If we take on this type of search, we can only hope that we are not facing either of the other two hurdles.

Next week we’ll take on “The Client is not willing to pay for what they want”.