Reflections of an Executive Headhunter
By Gary Kaplan© Pasadena Star-News, February 14, 2010
As I walked into my office this morning, turned on the computer, and listened to my voicemail, I marveled at how different the business of executive recruitment has changed in the 25 years since Gary Kaplan & Associates opened its doors. Thinking back to 1984, my day would begin with a stack of slips with calls to be returned, letters to be dictated and posted via regular mail, and newspapers to be read as my primary source of news and business trends.
Looking back on the occasion of our silver anniversary in business, I am still optimistic about the future, despite the many obstacles. We have endured three major and lengthy recessions, witnessed the desperate lows, and enjoyed the dramatic rebounds that have ensued. The impact on people and organizations has been enormous, but we remain resolute now, as we have over 25 years, to have a positive impact on the people we serve.
The road to the executive suite and the characteristics of the executives who get there have changed significantly over the last 25 years.
Today's executives are younger, more likely to be female, and less likely to have Ivy League educations. They make their way to the executive level faster than ever before (about four years faster than their counterparts in 1980), and they hold fewer jobs along the way. They spend about five years less in their current organization before being promoted, and are more likely to be hired from the outside.
The lifelong corporate employee who worked his way faithfully and slowly up the executive ladder, appears to be headed out the door - increasingly nudged, apparently, by women. In 2009, women held 13.5 percent of executive officer positions at Fortune 500 companies, including 12 CEOs. Compared to men, women executives are younger (47 versus 52); move into executive positions faster (21 years versus 25 years); and are less likely to be lifetime employees (32 percent versus 47 percent).
The dominant notion in the early years of our firm's history was that a business career ran its course inside a corporation. Quite simply, employer/ employee loyalty has changed, and those days are long gone. In today's more "mercenary" work environment, with a challenging economy and global competition, different skills are being rewarded, and the new type of executive benefits from this trend.
Over the coming years, the work force is set to become even more diverse, reflecting trends towards an ageing population, greater ethnic diversity, increases in immigration, and women continuing to be a major factor in occupying key management positions.
Compensation has changed dramatically over the past 25 years as well. In 1989, U.S. CEOs in major companies earned 71 times more than an average worker; this ratio surged to 300 at the end of the recovery in 2000. A study by the Economic Policy Institute found that between 1989 and 2007, average CEO pay rose by 163 percent, while the wages of the average worker in the United States rose by only 10 percent. Today, that gap has widened even further, topping 400 times the pay of the average U.S. worker.
The recruitment communication landscape has also shifted remarkably over the past decade, with the advent of innovation, technology, and flexibility increasingly setting the pace in the challenge to identify and attract talent at a senior level. Executives are no longer content to sit and wait by the phone for their favorite consultant to call with their next opportunity. Increasingly executives are highly pro-active in directing and advancing their own careers. The digital age has heralded a new approach and made this process immediate and effective.
Whereas in the "old days" the telephone, travel, and "snail mail" were relied upon to communicate, today the Internet allows easy communication and information that has the most impact. Knowledge, available at the click of a mouse, is a valuable way for executives to review market trends and keep track of employment opportunities. Inexpensive, accurate, easily available, technology is fueling the change in executive recruitment as well.
Having a sound grasp of emerging interactive or online recruiting channels such as LinkedIn, Twitter, and others, can enhance the traditional methods that organizations employ. Standing still in today's market is simply not an option.
However, there are potential dangers that can be caused by this culture clash between high levels of openness on Web sites like YouTube and Facebook, and the relatively closed organizational cultures of the corporate world. Job seekers must be very conscious of their public persona and maintain high personal standards. They cannot risk being "disqualified by Google" for inappropriate postings, personal ramblings, or photos that should be shared with family and friends, not the world.
Relying on online recruitment exclusively can backfire on employers as well. The online process can limit the applicant audience, as the Internet is not the first choice for all job seekers; it can increase the number of unsuitable or inappropriate applicants that internal staff are not equipped to deal with or are inundated and overwhelmed by the responses; and it can act as a barrier for recruiting older workers or certain disabled groups. Executive recruiters often serve as effective facilitators, offering a successful partnership approach to managing the process and integrating all recruitment methods to work in harmony.
As we look forward to our next 25 years, the current job market does not paint a rosy picture. National unemployment is now over 9 percent ... we think. California's unemployment is now topping 12 percent. At least 15 million Americans are presently out of work, and we continue to lose jobs every month, admittedly, at a substantially lower rate.
According to an article entitled "The Disposable Worker" in the January 18 issue of Business Week, over 9.2 million Americans are working only part-time, with over 26 percent of the US workforce employed in non-standard jobs - contractors, temps, part-timers, and freelancers.
The same aforementioned article concluded the reality is that companies that seized on the recession as an opportunity to make drastic organizational changes for greater efficiency and flexibility aren't likely to reverse those changes once the economy begins growing again. And the increasing use of bonuses tied to short-term profit performance gives managers an incentive to slash labor costs.
Although the job market rebounded quickly during the past two recessions, current indications are we're in for a long haul this time. However, there is light at the end of the tunnel. Two key factors can create a substantial difference in making the job market robust once again: a major technological breakthrough in the fields of energy, healthcare, or environmental sustainability, comparable to the Internet in the past; and, the impending departure of the all-important Boomers - those 76 million Americans born between 1946 and 1964 that make up fully one-third of the nation's work force. Corporations will have little choice but to employ new talent to fill the voids as Boomers retire within the next 5-10 years.
Bottom line, I love the work I do. Matching talented individuals with appropriate and ultimately rewarding positions - no matter how few and far between those positions may seem at times - requires more than simply pairing skills with vacancies. We do not just fill positions; we form long-term relationships between candidates, clients, and ourselves. I feel making a positive difference in people's lives, helping them direct their futures, and positively affecting their success has proven to be incredibly gratifying.
Gary Kaplan is founder and president of Gary Kaplan & Associates, a Pasadena-based executive search firm. Visit www.gkasearch.com.
