Executive Recruiter Gary Kaplan On Shortage Of Executive Talent
By Ed Carson© Investor's Business Daily. Thursday, May 13, 1999.
Filling any job opening these days is hard. Finding someone to step into the executive suite is even harder.
Q&A
Gary Kaplan
- Founder and president of Gary Kaplan & Associates
- B.A., political science, Penn State University
Quality management has never been as critical to a company's game plan as it is now. Intense global competition is forcing companies to move on a dime while watching the bottom line, and everything is at stake every day.
But tight labor markets are at their tightest in decades. And it's just going to get worse as the baby boomers age.
Many companies are resorting to stock options and major perks to attract the right candidates. But that raises a host of other issues.
Gary Kaplan, founder and president of Gary Kaplan & Associates, a Pasadena, Calif.-based executive recruiting firm, has worked in corporate recruiting for more than 30 years. He recently spoke to IBD about the difficulty in finding and holding on to top executives.
IBD: How hard is it to find top talent?
Kaplan: It's as tight as it's ever been, and I've been in management recruiting or human resources since the mid-60s. The good news is recruiting firms have been extremely busy for the past four years. The bad news is it's difficult to find qualified candidates.
IBD: What industries, positions or regions are you finding hardest to fill?
Kaplan: Technology positions, particularly positions that relate to the Internet. They have the ability to write their own tickets.
A lot of companies have been getting involved in doing IPOs, and there's a demand for financial execs with that type of experience. We just did a search for a billion-dollar-plus pharmaceutical company, which offered base compensation in excess of $300,000 and had a very difficult time with that.
IBD: Wage gains are slowing for most workers. What are you seeing?
Kaplan: Organizations are willing to be more creative than they've ever been in attracting people. Many companies are offering sign-on bonuses for middle management on up. In many cases, there's a form of guaranteed bonus.
And more and more people have gotten stock options. Companies have done a tremendous job in recent years of locking their top financial talent with lucrative stock options packages.
IBD: Is corporate-worker loyalty dead?
Kaplan: What we have now is sort of a mercenary, soldier-of-fortune mentality. And it really began with the early mergers of the 80s and then the periods of recession that we went through, rightsizing, re-engineering, continued accelerated merger activity.
As a result, it's had a dramatic impact on the whole concept of a sense of belonging to corporate organizations.
Years ago, we took great pride in who we were associated with. I remember being with Bell Labs now Lucent Technologies and taking huge pride in belonging to that organization. We don't see that very much any more.
IBD: How do companies attract and retain the next generation of managers?
Kaplan: If you want to keep your best and your brightest, they've got to have a sense of progression within the organization. It's not all about money. What's important is job satisfaction especially for younger workers.
IBD: How do Gen Xers differ from previous generations?
Kaplan: They need a more collaborative, collegial environment. Gen Xers don't mind paying their dues early on, but they need a sense that they're going to be moving forward. They feel they bring a lot to the table and they want to have a say in what transpires.
Years ago, young executives were obedient almost in the military sense. The more current generations believe that just because you have the chevrons doesn't necessarily mean they have to respect you.
IBD: Is the shortage of CEOs, CFOs and other top talent hurting companies' expansion?
Kaplan: I don't think it's happening yet, but I think it's something that we should be concerned about in the foreseeable future.
IBD: Have labor shortages intensified over the last year?
Kaplan: Last year was the worst I've ever experienced. Our business was up 40% to 45% from 97.
But I dealt with more rejections and bizarre situations than I've ever encountered. We had people accept positions and a week before withdraw their acceptance. We even had a situation where a person started the job for a couple of days, and then turned around and accepted a better opportunity.
IBD: What happens when new hires get paid a lot more than current employees?
Kaplan: Corporations aren't doing themselves any favors if they offer someone substantially more than comparable employees in their companies. Because what you're going to do is bring one in the front door and you're going to have several go out the back.
We have one client, a major company, that had been extremely tightfisted. Because of who they were, we were able to get people to move for the same or even less pay.
And then they turn around in the same area and hire another executive at a dramatic increase over what the others had been hired at. The word got out, as it always does. And these people are demoralized. o
