RecruitSmart Today
A bi-weekly source of market intelligence and insight that executive-level recruiters in the corporate and search firm environments leverage to advance best practices in executive talent management.
Shaped by the voice and perspective of our widely respected industry analyst, Joseph Daniel McCool, RecruitSmart Today delivers trend and data analysis that you can use to benchmark best practices in executive-level recruiting, retention, compensation, and other key human capital functions.
We're confident that once you realize the value of RecruitSmart Today, you'll find reason to leverage the exclusive, members-only ExecuNet resources that other executive-level recruiters are leveraging to boost their human capital advantage. Whether it's our exclusive job posting, candidate search, and networking resources, or the periodic RecruitSmart Insider intelligence briefings available only to our members, you'll soon discover how ExecuNet members are keeping pace with the issues, trends and data that are driving executive talent management.
"Getting good players is easy. Getting 'em to play together is the hard part."
— Casey Stengel(1890-1975) Baseball Hall of Fame inductee, N.Y. Yankees manager
ExecuNet Exclusive: Job Creation Moves At Slower Pace
Executive-level hiring forecast by U.S. recruiters eased in July but extended a positive trend line to a seventh consecutive month, with companies expected to add more management jobs than they plan to eliminate in the next six months, according to ExecuNet's Executive Job Creation Index (EJCI). ExecuNet's EJCI is based on a monthly survey of executive search firms and reflects responding executive recruiters' expectations of how companies will leverage the economy from a management talent point of view. The Index compares the number of companies expected to add executive positions over the next six months versus those planning to downsize their management teams. The July EJCI data, based on an ExecuNet survey of 163 executive recruiters, reveals that more companies were expected to add executive talent than shed executive jobs through the next six months, with expanding companies outpacing those aiming to eliminate management roles by 12 points.
Source: ExecuNet.com
Most Employers Plan To Raise Pay In 2011
Employers plan to adjust their compensation practices for next year in response to concern over losing top talent after the past year of pay freezes and, for some, signs of economic recovery.
A recent Mercer study of more than 1,100 mid-sized and large U.S. employers finds 98 percent of them plan to award base pay increases in 2011, with only 2 percent planning across-the-board salary freezes next year. That compares to the 31 percent of employers that instituted pay freezes in 2009 and the 13 percent of companies that did for this year.
Of the employers projecting base pay increases, the average increase is expected to be 2.9 percent in 2011, up from an actual 2.7 percent in 2010, but still down from 3.2 percent in 2009. Unlike past years, expected salary increase levels for 2011 are even across most employee groups, however more employers are taking a segmented approach to salary increase allocations and continuing to focus on high-performing talent.
"It looks like salary raises are back and for good reason," says Catherine Hartmann, a principal with Mercer's rewards consulting business. "The risk of losing key employees is top of mind as the economy recovers and certain labor markets improve. And while non-monetary awards such as career development and training are effective in retaining employees, employers realize that top-performing employees are loathe to going another year without an increase in pay. Investments in both cash and non-cash solutions will have a significant impact on avoiding post-recessionary flight."
The survey also finds the gap between high-performing employees and those in the lower performing categories is widening significantly. "In the tug of war between limited resources and the need to retain critical employees, recognizing top performance is still clearly a driving factor," Hartmann adds. "Differentiating salary increases among employee groups is a necessity, allowing employers to make their investments on those employees who will advance the organization in the new economy."
Employment Gains Confirm Sluggish Economy
The modest gain in private sector jobs confirmed recently by the United States Department of Labor signals that the American economy remains on a slow growth path, and it's going to be a long haul to wind up the jobs machine.
Bart van Ark, chief economist of The Conference Board, says the current pace of employment is too slow to replace the more than eight million jobs lost in the recession — not in the next year or two, perhaps even not in the next five years.
ExecuNet recently reported that executive-level hiring, while more positive than in the broader employment market, is also following a slow and steady pace as the economy continues its recovery.
According to van Ark, service industries are picking up very slowly and it's unlikely that industries such as construction and manufacturing will ever return to pre-recession employment levels.
The Conference Board reports that some employers are reluctant to hire, which would add to their cost structure, primarily because they don't see the return on human capital investment in a weak economic environment.
What It Really Takes To Drive Change
In today's business climate, everyone has a change agenda. Whether it's improving HR processes or completely transforming ineffective or wasteful talent management practices, the pressure is on and the siren's call of innovation can be heard in nearly every part of today's business enterprise.
So where to begin? Chip Heath, Stanford University professor and the co-author of Switch: How To Change Things When Change Is Hard, offered somewhat counter-intuitive advice on innovating at the World Innovation Forum.
That was, don't just analyze and build data to support your business case for driving change. Lots of apparently innovative projects backed by loads of Excel spreadsheets have failed to move the needle and move target audiences to embrace new behaviors.
Heath contends that driving change in any organization is a process that should begin with a deep understanding of the emotional stimulus required to actually trigger new activities, new risk-taking and new views of what may be longstanding problems.
Innovating, Heath said, is all about making your target audience "feel something that makes them want to change." If you can get colleagues, customers or any other target group to commit to changing the way they interact with your organization, you'll eventually get them to embrace change, perhaps via a different route than they might have if you tried to dictate an exclusive way forward.
Join a gathering of peers from global Retained Executive Search consulting firms, executive talent acquisition leaders from corporations, and noted authors and consultants at The 2010 Executive Search Consulting conference taking place on September 15 in Rosemont, Chicago, IL.
Hear Joe McCool and ExecuNet President Mark Anderson, as well as many other Industry Experts, deliver insights and actionable advice specifically designed to meet the needs of the Retained Executive Search audience.
Network with several hundred Corporate Recruiting Professionals during breaks and our cocktail reception (the conference is co-located with the Onrec Expo 2010),
BONUS: Receive an ExecuNet exclusive 20% discount off the conference fee. Register now and enter promotional code EXECUNET20. Optional workshops are also available on September 14 and 16.
CEO Role Being Reshaped By New Pressures
CEOs are being asked to deliver results faster, and in the case of an outgoing CEO-turned-chairman, they're also increasingly being asked to apprentice into the full responsibilities of the job.
That's according to a recent Booz & Company survey of the world's 2,500 largest companies (based on market capitalization), which finds a simultaneous wave of compression reshaping and refocusing the CEO role. It finds:
CEOs must do more, and faster. In just the past decade, boards have shaved nearly two years off the average CEO's tenure, from 8.1 years to 6.3 years. And while they are leaving office at about the same age as they have historically, today's departing CEOs were older when they entered office: 53.2 years for those who exited in 2009 versus 50.2 for those who exited in 2000.
More chiefs are "apprentices." Having split the roles of chairman and CEO, some North American and European companies are increasingly appointing the outgoing CEO as chairman to apprentice the incoming leader. However, the "apprenticeship" model does not produce consistently superior returns. In fact, on average, apprenticed CEOs underperformed non-apprenticed CEOs by 1.3% per year.
No excuses for poor performance. CEOs forced from office significantly underperformed those leaving on their own terms. Never was this more dramatic in the past decade than 2009, when chiefs departing on a planned basis delivered median market-adjusted shareholder returns of 6.0% compared with -3.5% for terminated CEOs.
Key Takeaway: Slowly but surely, it seems more companies are recognizing the merit of splitting the chairman and CEO roles. From a succession perspective, separating those responsibilities is clearly the best approach to balancing management with effective governance oversight.
2010 Executive Job Market Intelligence
Our 18th Annual Executive Job Market Intelligence Report captures the latest trends and developments in senior-level hiring, compensation and executive search.
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