Saturday, 21 February 2009

The New Depression - What Does it Mean for Executive Recruitment?

Like me, you may have parents and/or grandparents who remember ‘The Depression’, or at least remember its consequences. When I was a young girl I went with my grandmother to ‘the bank’. Going to the bank was an all day affair – she had bank accounts all over town – each with a modest balance. Her family had lost a lot of money in the crash of 1929 and 40 years later was still cautious about the banking system.

Little did I know that I would end up doing exactly the same – spreading my risk 70 years after the famous crash – unable to decipher who would be the winners and losers. And I have to keep a chart to hand of who owns whom to ensure I don’t put too many eggs in one basket.

Of course, inevitably the discussion comes around to jobs and recruitment. Headlines like ‘3 million unemployed’, ‘7% unemployment’, ‘British jobs for British workers’ are spreading gloom and doom throughout the global employment scene.

I have written many articles about how to put your best self forward to find the right role. And I have recently also written about finding a job in a downturn. (see my blog entry for 9 December 2008)

Roland Gribben, writing in the Daily Telegraph on 12 February, says ‘More companies are lining up to freeze pay or delay settlements as management prepares for the survival game. They are playing safety first in anticipation that the fast deteriorating business outlook means they will be either unable to afford an increase or be forced into making staff redundant.’

Companies and employees are scrambling to find survival strategies that enable them to not only continue trading for the short run but not strangle their future prospects at the same time.

The reality is that all companies need senior management to run the enterprise. So while there is not a standstill in executive recruitment, there is a serious slowdown as employees stick to their seat and only move for extraordinary opportunities. But companies are also looking at the talent sitting at the board table and asking the question – are these people fit for the purpose which faces us today?

A good example is the appointment of Ian Smith to Reed Elsevier. The Financial Times reports, ‘The appointment of Ian Smith to head Reed Elsevier has echoes of how the outgoing chief executive was selected almost a decade ago. Back in 1999, Sir Crispin Davis was seen as “a little untried and untested”, according to one analyst at the time, by virtue of an esoteric career that encompassed consumer goods and distilling. With his career spanning the oil, consultancy, healthcare and construction sectors, the hiring of Mr Smith, who lacks media experience, surprised some commentators. But his record as a dealmaker - he merged Taylor Woodrow with rival George Wimpey and sold General Healthcare to South Africa's Netcare in 2006 - has fuelled talk that he may forge ahead with the long-rumoured merger between Reed and Dutch rival Wolters Kluwer.’

A non-traditional candidate brought in to do different things.

Another point to consider is your own financial health. Back in the early 1990s when the economy was in dire straights I was interviewing in the UK in the management consultancy industry after 10 years with Price Waterhouse in the US. In almost every interview there was subtle questioning about my personal financial position – the firms only wanted to hire people who were not at risk of a) going bankrupt; b) causing embarrassment to the firm through expense misuse; or c) having difficulties in their work performance because of financial issues. Ensuring that your financial position is reasonably sound also demonstrates good judgement that will enhance your professional position in any case.

Finding an excellent executive role today is not easy. Think of yourself as a ‘non-traditional’ candidate. Where would your skills be of particular use? What industries could learn from what you know? How can you demonstrate your value?

Good questions to be asking as you spread your net wider.

© Betty Thayer, 2009