Last year, many executives opted for early retirement when COVID-19 hit. Others were let go by their companies due to perceived redundancy in roles or the need for financial cutbacks.
More than a year later, the economy is bouncing back and companies (both new and old) are trying to recruit quality leaders. And they’re discovering that hiring the right executive is more challenging than ever. But now is the time to invest in visionary, long-term leaders who can help your company adapt to the new future of work.
The consequences of the wrong executive hire
The consequences of making a bad hire at the executive level can be felt across the entire organization. The wrong leader — especially in the C-suite — can have lasting repercussions that continue long after they’ve left your company. Here are just a few potential outcomes:
- Lost productivity: A bad executive may lead their team down the wrong path in pursuit of goals not aligned with the company as a whole. Bad leadership and the wrong attitude can also bring down an entire team’s morale and productivity. In addition, all the time and money spent recruiting, onboarding, and training an executive hire will have to be reinvested — potentially costing your organization six to nine months of the desired position’s salary.
- Tarnished reputation: In the digital age, a bad hire can quickly tarnish your company’s reputation. They, or their dissatisfied former direct reports, can drop negative reviews on job review websites which can affect your ability to recruit top candidates, regardless of level. Turnover at the executive level also sows seeds of discontent and dissatisfaction into your workforce. Employees may question your company’s stability, and even worse, look for a job elsewhere.
- Decreased valuation: Effective leaders determine company success and shareholders often react negatively to executive turnover, especially if it’s unexpected. According to PwC, CEO turnover reduces median total shareholder return to -3.5% and a forced turnover can cost $1.8 billion more than a planned succession. If your business is service-based or project-based, a bad executive hire and changes in leadership could also impact customer satisfaction and retention.
5 ways to recruit the right leadership
Strong executives are vital to any business. They bring innovative ideas and energy that help your organization evolve. So, even though today’s hiring landscape is extremely competitive, you can’t afford to hire the wrong executive. The following tips can help you recruit, close, and retain the right leaders in the current environment:
- Know your company: Before you start the hiring process, make sure you understand your company’s culture, values, workflows, and weaknesses. Then, practice how you communicate it. Hiring a good fit means they need to want to work at your company. This requires setting accurate expectations during the interview and hiring process.
- Know your goals and challenges: Similar to knowing your business, you should know where it’s headed. Identify your company’s goals. Then, consider the challenges your organization, industry, and sector will face in the next five years. This will help you determine the ideal experience and expertise of the type of executive hire who can get your company to the place it needs to be.
- Be clear about your remote work policy: According to a recent survey, 55% of the workforce wants to be remote at least three days a week. A company’s remote work policy is now a key consideration for candidates, so determining how often you need your executives to be in office (and whether it is negotiable) will help set expectations and ensure long-term success.
- Maintain momentum: Once you’re in the hiring process, make sure it doesn’t drag on. A slow process can frustrate candidates and cause you to miss out on a good hire. When you find the right person, be decisive and clearly identify the next steps. In this way, recruiting is like sales: Time kills all deals.
- Lean on networks and partners: The best hires aren’t always those looking for a new job — the right person for the job may be an internal candidate, a referral from an employee’s network, or a product of outbound recruitment. A talent partner who has the experience, expertise, and existing relationships can help you uncover the perfect candidate, even if it’s someone who isn’t raising their hand.
Good people power success
We’re at the precipice of a new era of work. The pandemic continues to change the hiring landscape, accelerating digital transformation and popularizing remote work. Companies need strong leaders to ensure they not only evolve but stay ahead of the competition. With the proper practices and partners in place, you can make the right executive hire to help propel your business forward.
By Phil Gaddis, President of Executive Search, Addison Group.