The current senior managerial landscape presents a unique picture, unlike anything we have seen before. In-demand CEOs and other senior executives are hard to come by, let alone retain. Organizations must work to keep their present talent happy--and prepare for new skill requirements to emerge. Where have all the talented managers gone?
"The simple answer is they are fully employed--at someone else's company, being kept close to the vest with stock options, guaranteed bonuses, and compelling perks," reports Gary Kaplan, founder of Gary Kaplan & Associates, a Pasadena-based executive search firm. "Or these senior managers are out starting or co-founding their own companies."
According to Kaplan, smart companies are growing the talent in-house. A healthy organization promotes from within first, which includes investing the effort and expense in executive education, expanding skills and responsibilities, and providing ownership. In addition, internal promotions help employees see a future within the company and keep them from seeking fortunes elsewhere. "If you neglect to nurture internal human resources," Kaplan says, "then the ship gets deserted, or raided, mighty fast."
Richard Fitch is a partner at Shaffer Consulting Group, an executive search firm based in Ventura, CA. He agrees with this assessment of the situation. "In today's business world," Fitch says, "companies that develop people appropriately for senior level jobs will tend to be in a better position than those that are limited to only recruiting top-level executives from the outside. However, many corporations do not invest the time and money to groom managers for senior positions--and find that they have to go outside for help. In the long run, these firms could end up spending more money to seek out their CIOs and CEOs.
"For the last several years," Fitch continues, "it has become increasingly more difficult for companies to find quality executives who are willing to change jobs, as senior people look to get vested in stock options and pension plans and don't want to leave."
New Skills Required Victor Milin, vice president of human resources at Datek Online, a financial services company, sees new job requirements emerging in his industry that require a fresh talent pool. "In terms of promoting from within versus seeking outside talent," Milin says, "when Datek can tap from within for senior level spots, we will. However, some of the positions that became available in recent months at our firm had not existed before [VP Syndicates, for example, or VP Quality Assurance]. These required a completely new skill set in comparison to what was available in-house.
"We also find that, in some cases, refilling Datek positions requires us to look outside," Milin confides. "Case in point: we were able to promote the CFO to the COO and President's role last year. However, for the CFO position we had vacant, we needed to look outside because some of the new skills the position required were not available within the firm. Basically, the demands on our finance and accounting departments had changed dramatically since we last filled the CFO position. We had to adjust accordingly.
"Two years ago, Datek had 300 employees; we are now up to around 1,800. Conversely, we found that our people working within the existing paradigm did not have the experience to add these new competencies to the department," Milin told me.
What resources did Datek tap to find senior executives? "When we search for top executives outside, we tend to find a lot of candidates by networking," Milin reports. "We are recommended to many people via business partners [accounting or banking firms with whom Datek partners, for example], and are able to leverage off those relationships."
In Milin's opinion, the national job market is in robust shape. "Datek strives to keep all of our employees happy. We know we must provide a great place for them to work, otherwise they can easily secure other employment. In light of today's job climate, Datek has highly skilled, highly competent, highly desired workers--from our customer support reps through our CEO. We know that if our people choose to leave, they could find competitive work very easily."
Fitch agrees that the market is ripe with new opportunities. "In general, I'd have to say that there is a lack of quality jobseekers out there. This differs from industry to industry, of course, but where company performance and stock prices have remained strong, the availability of qualified senior managers is low--while, at the same time, demand for those same people is the greatest.
"With the possibility of a recession in early 2001, senior and mid-level managers will also be paying closer attention to prospective companies' near term prospects, weighing the possibility of layoffs and downsizing to adjust to weakened demand," Fitch adds.
Today's executive leaders should keep a steady eye on the current and emerging talent and be prepared to deal with career path issues--either from hires within or in a search outside the organization. Dealing with today's crunch in executive talent is, as Kaplan says, a vision test of the organization as it looks at the road ahead.
Erin Flynn is a freelance writer and managing editor of Stephan Schiffman's Executive Sales Briefing, a newsletter for sales professionals in every industry. She has interviewed successful authors, business consultants, and sales experts.