Penny Wise and Pound Foolish: A Key Characteristic of Successful Hiring Managers
When recently retained to conduct a Senior Executive search for a very successful oil and gas services company ($150M rev; 23% annual rev. growth), I was reminded once again of why some hiring managers are so successful and seem to “get it” when it comes to the often thorny issue of executive compensation. As a market dominant player in the northeast region of the US, this privately held company was looking for a succession candidate to their current President whose planned retirement window was approaching quickly. At any rate, when a highly capable and qualified candidate was found, an offer was put together in consultation with CSI’s senior recruiting team utilizing in-house proprietary benchmarking data.
As is true of many initial draft offers, it was solid considering the nature of the role and when measured against other comparison benchmark metrics for similar positions in the same industry. I should add that the key hiring manager was very receptive to CSI’s initial feedback on the initial draft offer that both the salary and the equity components should be increased. His attitude reflected the collaborative kind of spirit that we have witnessed with other successful companies and their key decision makers.
At any rate, the ultimate initial offer represented a significant increase over the candidate’s current base salary plus it offered other lucrative short- and long-term incentive compensation pieces to the mix. However, it was what happened following submission of the initial offer to the candidate that was most revealing in terms of why we believe this company and the hiring manager in particular have been so successful in navigating key hires for their company over the years.
When the candidate received the offer, he was most appropriate and appreciative. However, after again discussing his long-term career aspirations and outlining in even more detail his justifications for additional compensation, the client was informed of the additional information gathered and asked to consider reformulating the offer. Normally at this point there is at least a little ambivalence on the part of a hiring executive if significant changes to the offer are requested. But not in this case nor in others like it that we have witnessed over the years. Almost immediately, the client upped the base salary to the requested amount and the equity piece of the offer was also readdressed.
Was the candidate worth it? It remains to be seen, of course, but for anyone with knowledge of the candidate’s previous role at a competing company, the candidate’s stellar employment history, his industry experience and insider relationships, and a multitude of other personal qualities that he brought to the table, I would argue that our client got a deal. Evidently they agreed.
Now, are all candidates worth this type of “whatever it takes” kind of approach to compensation? Of course not. But successful hiring managers know that pinching pennies on potential high impact hires is not a formula for long-term business success. We have witnessed this “pay your high impact players well” kind of attitude time and time again over the years among successful people and companies with whom we’ve partnered. The results have typically been a “win / win” for both sides.