Hiring can be challenging at any level, but it’s particularly difficult to recruit and hire the right people to propel your business to success. A CEO, VP, board director, or C-suite executive can make or break your company. That’s why so many companies retain an executive search firm to find the right talent for these critical leadership roles.
Here is a look at some of the major challenges involved in recruiting and hiring at the C-suite level.
Executives are in high demand
Put simply, the supply of C-suite talent isn’t enough to fulfill the demand. This means that C-suite executives have the luxury of being able to choose where they wish to work. In addition, fewer people today expect to spend decades of their career at the same company. They will go where they find the most interesting, meaningful work and where their talents are most appreciated. This trend has created more flexibility and movement in the executive talent market than ever before.
That’s not to say that top-tier executives are sitting around, scrolling LinkedIn for the perfect job. They are already working, but can be lured away by the right company with the right offer. That’s one reason why businesses retain executive search firms—they leverage their relationships to tap into the pool of passive candidates who aren’t actively looking for a new job, but who are open to the right opportunity.
Executives know they are in demand and hold great power during hiring negotiations; the ball is usually in their court. Companies seeking to secure top level talent need to know not only what salary is reasonable to offer, but also have a grasp of the other benefits C-suite talent expect in return for their experience and expertise.
Beyond base pay and standard benefits, a compensation package might include a signing bonus, short- and long-term incentives, stock options, “golden parachute” provisions, deferred compensation plans, restricted stock, termination provisions, club memberships, and a range of perquisites like the use of a company plane. Compensation packages can be complicated, and negotiating favorable terms for both the company and the newly hired executive takes skill.
Culture also matters to C-suite executives, too, just as it does to rank-and-file employees. No one wants to work in a toxic environment, especially if you’re an executive in a leadership role. Some people enjoy a challenge, but the most talented executives do not want to join a company where a dysfunctional culture will limit their ability to effect change.
Generational shifts create leadership shortages
A steady flow of baby boomers are leaving the labor force, and with them go their executive management skills honed over a lifetime at work. Many companies simply do not have enough Gen X and millennial managers ready to advance to the C-suite.
It is not merely a numbers game, but all about leadership skills. Younger candidates may lack the experience necessary to excel in these executive positions. Working with an executive search firm is one strategy that can help companies tap into younger C-suite talent pools when promoting from within is impossible.
Speed is imperative
Time is of the essence in an executive job market where C-Suite talent is in high demand. If executives can pick and choose among offers, it’s more important than ever for companies to strike quickly when they find the right person. Lengthy recruiting processes that drag on will send talent running, potentially to your competitors. At the same time, identifying talent, contacting them, building a relationship, interviewing, vetting, and assembling a competitive compensation package takes time—time that many companies may simply not have on top of normal business operations. Leaving important C-suite roles unfilled for months on end can be costly, create workflow bottlenecks, and burden other staff as well.
This is where executive search firms come in. Their relationships with talented executives are already established, and they are able to act nimbly to complete executive placements in a fraction of the time it would take a company acting on their own.
DEI is more important than ever before
DEI (diversity, equity, and inclusion) is not a challenge—it’s an opportunity. Still, recruiting and hiring diverse leadership teams requires special considerations and an active commitment to DEI. Many companies do not have the connections to diverse candidate pools that they’d need to recruit and hire on their own. In addition, the legacy of racism in our country is such that there are fewer BIPOC executives overall.
The value of diversity for companies is well documented. It’s important to have a leadership team that reflects your customer base and the world at large—this is something your customers, shareholders, employees, and job candidates want. In addition, studies suggest that diverse leadership teams perform better. For example, companies with more women in senior positions tend to be more profitable and enjoy other benefits, while diverse teams may even be smarter all around. Diversity is also increasingly a matter of regulatory compliance: many states have enacted board diversity laws.
Most companies understand the importance of diverse leadership, but there are still large diversity gaps at the C-suite level in corporate America. For those companies that truly wish to change, executive search firms—especially those with an explicit commitment to diversity—can help close these gaps.
The value of an executive search firm
Although C-suite recruitment presents considerable challenges, finding the right people to lead your company is essential to its success. An executive search firm is the best solution to many of the challenges involved in recruiting and hiring at the executive level. Their high-quality network of talent gives your company quick access to a wider talent pool, helps you fill knowledge and experience gaps, and allows you to build diverse leadership teams.