The Investigative Recruiter

The End of Men and What it Means for Retained Search's Patriarchy

This year, women become the majority in the workforce for the first time in American history. It is a critical milestone, one that we in executive search ought to pause to consider by reading an intriguing article in the Atlantic Monthly entitled "The End of Men".   The reason? 75% of the 8 million jobs lost in the recession were lost by men, as testosterone dominant blue collar and Wall Street jobs have gone the way of the dodo bird. At the same time men are having a tougher time getting by, women appear to be on the rise.  One reason may be that companies that employ woman leaders are simply more profitable. (Do I have your attention yet?)

A 2008 study attempted to quantify the effect of this more-feminine management style. Researchers at Columbia Business School and the University of Maryland analyzed data on the top 1,500 U.S. companies from 1992 to 2006 to determine the relationship between firm performance and female participation in senior management. Firms that had women in top positions performed better . . ."

At a time when excessive risk nearly drove our global economy to its knees, studies also suggests that men may be hormonally inclined to make reckless mistakes. Ironically, women's hormones -- the very chemicals held against us for so long -- appear to make us better decision-makers, especially in today's economy.

Researchers have started looking into the relationship between testosterone and excessive risk, and wondering if groups of men,in some basic hormonal way, spur each other to make reckless decisions. The picture emerging is amirror image of the traditional gender map: men and markets on the side of the irrational and overemotional, and women on the side of the cool and levelheaded.

In fact, women's recent majority win in the workforce may be just the beginning because women are graduating in higher numbers from college. "For every two men who will receive a B.A. this year, three women will do the same." The article goes on to explain the implications:

IF YOU REALLY want to see where the world is headed, of course, looking at the current workforce can get you only so far. To see the future—of the workforce, the economy, and the culture—you need to spend some time at America’s colleges and professional schools, where a quiet revolution is under way. More than ever, college is the gateway to economic success, a necessary precondition for moving into the upper-middle class—and increasingly even the middle class. It’s this broad, striving middle class that defines our society. And demographically, we can see with absolute clarity that in the coming decades the middle class will be dominated by women.

The domination is also being expressed in gender selection at fertility clinics. Based on anecdotal evidence, parents seeking assistance in getting pregnant are choosing girls over boys three-fourths of the time.  While that particular fact and the idea of women's collective rise to power may be shocking to some, it is yesterday's news to my teenage daughter and others her age raised on a steady diet of girl power videos from artists that include Beyonce who tours with an all-female band. In song after song (Irreplaceable, If I Were a Boy, and her earlier Destiny Child's Survivor), she conveys that rather than being worthless or worth less than men, we of the female persuasion are actually worth something -- at the very least, a ring. 

 Beyonce's Single Ladies (Put A Ring On It) begat a flash mob in Piccadilly Circus in London . . .

 . . . and morphed into a gay power subplot on the Fox show Glee . .  .

 . . . which begat SNL's rendition.

If Justin Timberlake feels secure enough in his manhood to don a leotard and high heels in a Single Ladies send-up, then perhaps we have, indeed, arrived. However, the major retained search firms yet to come to that realization when you examine the percentage of women they employ.  I actually stopped and counted the women listed at each of the U.S. offices. The unofficial tally is as follows:

• Korn Ferry: SeniorLeadership: 20% women - 3 of 15, U.S. Consultants: 24% women - 75 of 311
• Heidrick: Senior Leadership: 16% women - 1 of 6, U.S. Consultants: 25% women - 46 of 184
• SpencerStuart: Senior Leadership: 0% women - 0 in 7, U.S. Consultants: 38% women - 54 of 141
• Russell Reynolds Senior Leadership: 0% women - 0 of 1*, U.S. Consultants: 39% women - 41 of 108

Despite the paucity of women in top leadership roles, the retained search industry hates, hates, hates to discuss sexism as if closing its eyes to gender bias will make it all go away. It is the same kind of wishful thinking practiced by a toddler who thinks covering his eyes with his hands makes him invisible. The old boys that remain of the Old Boys' Network are Masters of Denial, an impulse rooted their privileged white male DNA.

The retained search industry emerged in the 1950s as firms spun off from professional services companies.  Gardner Heidrick and John Struggles were both veterans of the management consulting firm Booz Allen Hamilton. Spencer Stuart worked for them for a year before leaving to found his own search firm. Lester Korn and Richard Ferry met at accounting company Peat, Marwick, Mitchell.  Russell Reynolds worked for a time for William Clark, a firm that had been spun off from another accounting firm Price Waterhouse. Sid Boyden was ahead of all of them, founding his firm in 1946.  However, in the decades since their founding, not a single firm has chosen to name a woman as their CEO. That paticular glass ceiling has yet to shatter, mirroring the vast majority of the Fortune 500 firms that they serve.

Understandably, gender bias has long been topic that most people would rather not discuss. Most of us prefer to focus on the positive, because sexism, like any other kind of ism, is such a bummer. Besides, people get all squirmy and uncomfortable in much the same way people don't like to talk about race, which is why President Obama rarely goes there. However, the bias now appears to be getting turned on its head. Whatever was working against women now appears to be working for us as a gender. More important, it appears to be working for our society as a whole.  It isn't that women benefit: we all benefit. The End of Men article by Hanna Rosin goes on to point out:

Up to a point, the reasons behind this shift are obvious. As thinking and communicating have come to eclipse physical strength and stamina as the keys to economic success, those societies that take advantage of the talents of all their adults, not just half of them, have pulled away from the rest. .  With few exceptions, the greater the power of women, the greater the country's economic success.

In other words, countries where women are on the rise simply make more money. (Do I have your attention yet??) That capitalistic truth should be reason enough to pursue gender neutrality within our own ranks, and to inspire us to help our clients usher deserving, hardworking women up into middle and upper management where they have yet to enjoy their fair share.  The reason is as simple. To quote a campaign slogan of former Bill Clinton, "It's the economy, stupid." The End of Men, as a thesis, simply means that whenever a woman advances and gets more, it's not that she get a male colleague's slice of pie -- the pie actually grows. That fact alone ought to be enough to inspire even the most serious among us to break out in dance. Of course, Ms. B is going to help us do it in style. To learn the Single Ladies dance, simply study her dance routine below, slowed to half time.

Candidate Mapping: A Best Practice for Executive Search Due Diligence

Imagine that an executive search that you've been conducting hits the wall. The CEO or Hiring Executive calls you in for a full accounting. You walk into the office. He closed the door behind you. In that very moment, you become painfully aware that your job and your reputation are on the line.  He gives you the third degree. With each subsequent question, you get smaller, and smaller, and smaller until you completely disappear . . .

The CEO asks:

• Why don't we hasn't this position been filled?
• Have we run out of potential candidates or are there still more people we need to recruit?
• Do we need to change our search strategy? 
• What do we need to do to close this search?

If "I don't know" is the first answer that springs to mind in response to most of the above questions, then you and your searches are at risk. Quite simply, they lack due diligence. In fact, when I think the words "I don't know" in my head, I hear Bill Cosby's voice impersonating a young child as he lampoons his children's frequent use of the phrase.

You must be able to justify your recruiting work from a strategic perspective.  You cannot simply detail how busy you've been or how hard you've worked. You must think strategically about how you would answer the above questions and then manage your searches accordingly. You must "nail down" the facts as you know them.  To offer due diligence, you must aspire to map candidates at each of your primary target companies to determine how many you have identified and how many you have left to surface. 

I'm presenting training webinar on this topic this coming Wednesday July 14th Recruiting Smarter: Search as Investigation. (The training is free because Dice is sponsoring the virtual event with their friends at HR.com.) 

Selecting A Search Firm: The Greatest Myths

Retained search firms frequently provide guidance to prospective clients on how to select a search firm. But a number of their assertions have gone unchallenged, much to the detriment of employers that have been hoodwinked into paying far too much for too little in return. Well over half of all retained searches fail to complete and it is estimated that 40-50% the executives who are recruited don't make it past their first year.  Clearly, something needs to change.  I suggest we begin by exposing some of the myths regarding what an employer should look for in selecting a firm.

Myth #1: Find a search firm that specializes. 

On the face of it, specialization seems to make sense.  Clearly, you want a firm that understands your business and its players. But there are many ways to come by that wisdom.  Moreover, seeking industry specialization is like tying your feet together at the beginning of a foot race.  Industry specialization cripples your search efforts because it sets up client blockage: any search firm that specializes in your industry will be unable to recruit from all of your ideal target companies because a number of those companies will be clients of the firm.  Of course, the search firm will promise to tell you if there is a conflict, but why should you believe them? They have intentionally pursued a model that sets up a conflict of interest.  In other words, it doesn't bother them enough to do something different and do the right thing.Why don't they make a commitment to serve just one major client per industry?  Bain & Company did that to leave no doubt in their clients' minds that Bain was loyal.  It is a commitment that we have decided to make. Rather than specialization, buyers of search should seek loyalty instead and choose a firm that takes pro-active steps to prevent conflicts-of-interest.

Myth #2 - Choose a retained firm that charges 30% of first year total compensation plus expenses.

Retained search firms, on average, charge 30% of annual first year total compensation of the candidate they place plus expenses. While it isn't technically price fixing, it is sure seems as if the search firms got together and colluded. In fact, if you actually stop to think about it, retained search firms have significant motivation to enforce their exorbitant fees.  For executives whose total compensation exceeds $300-thousand, search fees top $100-thousand and beyond.  Retained firms get paid that whopping sum whether the search lasts a week, a month, or a year.  In other words, the fee is completely disconnected from the actual work that they do.  Certainly, it is time for some other pricing options, such as a pay-as-you-go monthly retainer for as long as you need. No more, no less.

Myth #3 - Find a search partner that claims to have extensive network to tap for candidates.

A good search partners works their sources the way a reporter does. (As a former award-winning investigative reporter,  I know a great deal about the care and feeding of sources.)  But do not assume that a search partner will be able to recruit a candidate simply based on a preexisting golfing or country club relationship.  Conversely. do not assume that a candidate will refuse to engage just because they're hearing from a recruiter for the first time. Either the timing and the opportunity are right or they're not.  Executives do their due diligence.  In light of the many ways we can reach out and touch a candidate, what seems to matter more is the ability to uncover all viable candidates.  You usually don't do that from the 9th hole.

More on the myths in future posts.