Recruiting the Best Executive Hires: A Step-By-Step Guide for Business Leaders
Hiring Top Executive Talent in a Hyper-Competitive Market
Co-authored by Debra Kabalkin, Practice Leader, Talent Acquisition and Kyle Robertson, Senior Recruiting Consultant
It’s no exaggeration to say that an executive hire can make or break a company. When you bring a new face into the C-Suite, you’re not just getting a replacement for the outgoing executive. You’re introducing a fresh voice that will shape your strategy, influence your culture, and hopefully help you navigate towards a successful future.
- Chief Executive Officer (CEO): 6.9 years
- Chief Financial Officer (CFO): 4.7 years
- Chief Information Officer (CIO): 4.6 years
- Chief Marketing Officer (CMO): 3.5 years
- Chief Human Resource Officer (CHRO): 3.7 years
In many companies, the C-suite is expanding as companies identify modalities that require executive-level attention. Companies around the country are trying to fill positions like:
- Chief Diversity Officer
- Chief Data or Digital Officer
- Director of Remote Working
- Chief Freelance Relationship Officer
- Chief Systems Security Officer
- Chief Sustainability Officer
All in all, companies face a growing amount of churn at the highest level, and each change can have an outsized impact on the company’s future.
Large, stable companies will try to fill most of these positions from within. However, that’s not an option for smaller businesses going through an expansion phase, or those who don’t have an adequate talent pipeline in place. In situations like these, you’ll have to look to the recruitment marketplace to find the best leadership talent for your business.
It’s a big decision. In this guide, we’ll walk you through the process of appointing a new senior leader in your business, whether that’s a department head or a new CEO. We’ll also talk about how a Retained Search Specialist can make the process easier.
It all starts with a simple question: what do you need from your leader?
1. What do you need from your leader?
Strategic goals are the driving forces behind any kind of recruitment. Whether you’re hiring a customer service rep, a software developer, or a mid-tier manager, you know what you need that person to deliver for your business. That makes it relatively straightforward to write a job description and search for applicants.
But things are slightly different when you’re hiring a senior leader because that person will go on to play an essential part in developing your strategy. They’ll help address weaknesses, identify opportunities, and determine whether you’re on track to meet your long-term goals.
All of which means that you need to revisit your goals before you start looking at leadership candidates. For example, imagine this hypothetical. You’re on the board of a company going through a growth phase driven by mergers and acquisitions. What kind of executives do you need?
- CEO: Primarily, you’ll need a CEO who’s an expert negotiator. They’ll need an intense knowledge of both your company and the industries in which you’re conducting M&As.
- CFO: The finance officer will need to be both strategic and creative so that your company can find ways to bankroll any deals. They’ll also need to know how to steer through the complex regulatory issues involved in M&A.
- CHRO: Senior HR leaders will need to have a great ability for communicating standards and cultural values across disparate teams. They’ll lead initiatives to align all employees and unify the business.
That’s just one scenario among many. If the business is bracing for a difficult time, you’ll need leaders who are skilled at streamlining and optimization. If you’re pivoting to a new market, you’ll need visionary leaders who can blaze a trail. Even if the plan is just to stay the course, you’ll need people with cool heads and a steady hand.
How to define a leadership role
The first step is to assemble a panel of primary stakeholders who have a voice in the decision process. This group may include members of the C-Suite and senior leaders from the relevant business function (for example, finance directors should have a say in choosing a new CFO). If the outgoing leader is available, they can play an important part in choosing and preparing their successor.
When this team is together, you’ll need to ask some deep questions about your current position. Important topics to discuss are:
- Organizational cycle
Most companies develop in cycles, with bursts of growth followed by periods of consolidation. Before you hire new leaders, you need to understand where you are within your current cycle. If you’re heading into a growth spell, then you’ll need growth-minded leaders. Otherwise, you may need people who focus on securing the fundamentals.
- Long-term strategic goals
Every senior leader will play a part in delivering your long-term strategic goals. So, what are those goals? Are you on course to achieving them? An honest conversation about your plans may reveal that you need to revisit your overall strategy. If so, it may be time to bring in some visionary leaders who can help you see the path ahead.
- External challenges
Businesses don’t exist in a vacuum. An event like the global pandemic is just one example of the kind of challenge that can spring from nowhere and disrupt your carefully laid out plans. Market conditions, changing consumer behaviors, and regulatory challenges could also force you to rethink your organization’s plans. What kind of challenges will your new leader help to neutralize? For example, if you’re worried about international competition, you may need leaders who have experience in the global market.
- Scope of the role
Hiring a new leader is a chance to rethink that particular leadership role. For instance, in recent years, the CFO role has involved more strategic thinking and a greater reliance on data analytics. Other roles might split in two, as in the case of Chief Sales and Marketing Officer, or you might add an entirely new position, such as Chief Customer Experience Officer. Every time you hire a new senior leader, you have an opportunity to rethink the nature of that role. How can you make this role more impactful?
Appointing a new senior leader is never a like-for-like swap, nor should it be. This is a chance to add new energy, vision, and wisdom to your leadership team. When your selection panel discusses what you really need, you should start to get a picture of the kind of person you need to bring in.
2. Profiling your perfect candidate
Now that you know what you need from your new leader, you can start to build a profile of your ideal candidate.
There are many things to consider, such as experience, achievements, personality, leadership style, and strategic vision. But one of the first big decisions you’ll face is whether to hire from within or look to the broader recruitment market.
Identifying internal candidates
Succession planning is an essential part of business continuity. A succession plan helps you identify employees with leadership potential, allowing you to build a talent pipeline that will provide candidates for more senior roles.
But how do you identify employees to groom for promotion? You start by looking out for people who demonstrate the qualities indicative of leadership potential.
The Leadership Skills Strataplex is a model that outlines the main skills required to succeed at each level of an organization. These skills are the signs of someone who could make a great senior leader:
- Cognitive: Investigation and analysis; disseminating information; problem-solving; creative thinking.
- Interpersonal: Leadership and supervision; negotiation; delegation; conflict resolution; ability to read social situations and relationships.
- Business: Industry knowledge; subject matter expertise; resource planning; coordination and scheduling.
- Strategic: Vision; market and customer insight; competitor analysis; decisiveness; securing buy-in; ability to act as a figurehead.
According to the Strataplex model, lower-level managers generally need more cognitive and interpersonal skills. Business and strategic skills develop as they move up through the ranks. You can also encourage skills development by placing candidates in mentorship programs.
Internal promotion guarantees that your new leader will understand the company’s culture and vision. It also acts as an incentive for people who want to build a long-term career within the company. However, internal promotion is only a viable choice if you already have great people and you’ve spent time developing them.
Looking for external candidates
External candidates have some clear advantages over an external hire. You can look for someone who already has extensive experience in senior leadership, which means that they’ll make an immediate impact when they start. They also bring an outsider’s perspective to the team, which may help identify opportunities and weaknesses of which you were unaware.
Of course, there are downsides to bringing in a stranger. They’re unknown quantities, so you can’t be sure if they’ll complement your culture and strategy. New hires might also command a higher starting salary, especially if you’ve poached them from another employer.
Before you search the market for a new leader, you’ll need to think about the key attributes you want to see. This profile should cover things like:
- Culture fit: Culture is an essential consideration at this level. Your new executive will have an enormous influence on your organizational culture. If they clash with the rest of the board, that conflict will echo throughout the company.
- Strategic vision: Each candidate’s track record will tell you about the way they approach strategy and long-term goals. Some people take an expansive, future-first approach, while others prefer to be a steady hand.
- Core competencies: You may choose to focus on candidates with specific skills and experience. For instance, if you’re hiring a new CFO, you might choose to focus on candidates with Big 4 experience.
- Previous achievements: An experienced leader will have a proven track record of success. The question you must ask is: what type of success is most relevant to your requirements? This ties back to your organization’s strategic goals. If you’re going through a period of digital transformation, for example, you might want leaders with extensive achievements in change management.
- Compensation: Current compensation is obviously a factor when you’re building a candidate profile, but salary isn’t everything. Candidates will consider all aspects of your offer, including benefits and perks. We’ll look at how to make an offer in Chapter 4.
When your selection panel finishes discussing these attributes, you may end up looking for a unicorn candidate – someone so magical and perfect that they don’t actually exist. That’s why it’s important to break these requirements down a little further. Be clear about what attributes are must-haves and which qualities are nice-to-have.
3. Finding the right person
Now you understand the precise nature of the leadership position. You’ve also built a detailed profile of your ideal candidate. It’s time to begin searching for the right person. This step is never easy, which is why most companies turned to a Retained Search service. We’ll look at how to work with a Retained Search in more detail in Chapter 6.
In general, there are a few things you need to do when looking for a great leader:
- Cast a wide net for candidates
- Perform extensive preliminary research
- Reach out to potential candidates
- Conduct focused, well-organized interviews
- Review your approach if needs be
- Be decisive
Let’s look at each of these steps in more detail.
Cast a wide net for candidates
Identifying suitable candidates is often the most challenging part of this process. People with executive-level experience are few and far between, and most of them already have jobs. That’s why companies have to be proactive about conducting a search for talent.
Don’t be afraid to exhaust every available channel. You might pursue strategies such as:
- Leveraging personal connections of other leaders within the company
- Researching leadership staff in nearby companies of a similar size and industry
- Exploring social media sites such as Twitter and LinkedIn
- Looking outside your local market if the job can be performed remotely
Your candidate profile will help you zero in on people who might be a good fit for the role. That’s why it’s important to distinguish between the must-have and nice-to-have attributes. You can immediately screen out anyone who’s lacking in must-have qualities while giving further consideration to those who are an 80% or 90% match.
Perform extensive preliminary research
Most executive-tier professionals live quite public lives. You’ll find information about their career and achievements in the news, professional publications, and their company website. These days, many candidates will have a personal brand that they express across social media and blogs. If they have a LinkedIn profile, you can effectively view their entire resume.
You can also learn a lot by looking at the performance of their previous employers. Has the candidate’s tenure been a period of growth and success? You might also be able to find salary information for their current roles, either through corporate filings or on sites like Glassdoor.
Gather as much information as you can and compile a dossier on each potential candidate. All of this information will help you screen candidates and focus on those who will be the best fit.
Reach out to your candidates
Headhunting is a fact of life for elite talent these days. An executive with an impressive resume will receive regular messages from employers and recruiters, sounding them out for new opportunities.
When you reach out to a candidate, you may not be the first offer they’ve had that month, or even that day. If you want their attention, you have to make your offer stand out. The best way to do this is to keep it concise and relevant. Outline the exact nature of the role and explain why the candidate would be a good fit.
It’s also a good idea to provide candidates with an easy application process. A busy executive might be willing to shoot their resume over by email, but they’re less likely to fill out a tedious application form.
Conduct focused, well-organized interviews
Hiring an executive requires multiple interviews. You’ll need to assess the candidates from every angle while giving each stakeholder a chance to form an opinion. The selection panel will need to discuss the candidates, which may lead to further questions, resulting in yet another interview.
Unfortunately, this is where many great candidates get lost. When interviews are spread out, there’s a danger of someone else swooping in to snatch up your candidate. Also, the candidate themselves might decide that you’re not serious about hiring them, and they could look elsewhere.
Of course, you can’t rush the hiring process when you’re making such an important decision. But you can streamline it by taking some steps, such as:
- Know what you’re going to ask: Agree on a list of topics you’re going to discuss with each candidate. This list should cover all the most important attributes in your candidate profile. You’re free to ask additional questions, of course, but you should aim to ensure that you don’t neglect any of the key discussion topics.
- Build an efficient interview schedule: It’s hard to get everyone in the same room together to meet with the candidate. Encourage everyone to make time for interviews so that all stakeholders can talk to the candidate as soon as possible.
- Use technology where possible: Video conferencing is now an everyday fact of life, so there’s no reason not to interview over Zoom or Skype. Remote interviews will give you much greater flexibility in scheduling interviews, so you can compress the entire cycle into a few weeks.
- Keep in touch: Candidates are more likely to stick with the hiring process if they know how it’s progressing. If it’s taking a while to complete the interview process, send regular updates to let them know that everything is still in motion. Set expectations about the schedule, and let them know if there are any delays.
None of these steps require you to compromise your interview process. With solid organization and two-way communication, you can complete a thorough screening process in a relatively short amount of time.
Review your approach if need be
Hiring a senior leader can sometimes be an iterative process. If you fail to find the right person on the first go, you can look at where things went wrong and refine your strategy. Doing this will allow you to keep improving the way you search until you find the exact person you need.
If you think that the search strategy needs to be reviewed, there are some important questions to ask:
- Do we have the right vision? Your expectations for this role might be preventing you from finding suitable candidates. It’s good to go back to the drawing board and review those must-have and nice-to-have requirements.
- Do we have the right panel? Identifying the right stakeholders can be a challenge when you’re making such an important decision. It’s worth considering who is involved in the selection process and whether those voices accurately represent your business needs.
- Are we looking in the right place for candidates? If you haven’t turned up any promising leads, then you may be fishing in the wrong stream. Take a step back and see if there are any other possible sources of talent from which you can draw.
- Have we missed out on good candidates? If a candidate drops out of the assessment process, it’s a sign that you’re not moving fast enough. You need to speed up the process so you can make a move when the right person walks through the door.
- Do we need outside help? This kind of intensive hiring process may simply be beyond your available resources. If you’re not on track to find the person you need, it’s time to talk to a recruitment specialist. It’s a good idea this sooner rather than later, so you can complete the recruitment process as quickly as possible.
Failure can be educational, but ideally, you want to keep the recruitment cycle time to a minimum. That’s why it’s a good idea to get extra help from an expert if you need it.
Appointing a senior leader is a high-stakes decision. The more senior the leader, the higher the stakes. That’s why it’s understandable that some organizations will hesitate when making the final call.
This kind of indecisiveness is especially common when a committee is involved in the appointment. A few ways to force your team to a decision are:
- Set a clear timeline for making a decision, such as a maximum of four weeks from the first interview
- Agree on an objective way of assessing each candidate so you can compare their strengths and weaknesses
- Organize all candidate data so that decision-makers have access to the file when making their decision
- Hold regular meetings to discuss the progress of the selection process
It’s a fine balance – you have to move quickly, but you also have to be sure about your decision. Good communication between all parties will help you to keep the process moving.
At the end of this process, you should have a candidate who matches the profile. Now, you’re ready to make an offer.
4. Making an offer
When you hire a senior leader, you’re competing in a seller’s market. The best candidates will have multiple options available to them, so you need to create an offer that will make them choose your company.
The compensation package
Offers for executives and other senior leaders can get quite complex. There are a number of different incentives that you may choose to include to help land the right person. Here are the main things to consider.
The highest salary doesn’t always secure the best candidates, but it certainly is a substantial factor in any decision. Finding the right salary level is a challenge because you need to arrive at a figure that:
- Matches your budget
- Meets the candidate’s expectations
- Is sustainable for the coming years
- Won’t be easily beaten by a rival company
Many companies work with compensation planning specialists to help them land at an appropriate figure for the offer. This figure is usually based on extensive market research and surveys of other leaders in similar positions.
Most senior leaders will have bonuses linked to meeting specific targets. It’s a win-win for both parties: if the executive hits their target, they will most likely have earned the value of their bonus.
Finding a balance is vital when agreeing on these bonuses. They should act as an incentive for the new leader to deliver everything they promised, to the maximum extent of their abilities. However, targets should also be attainable. Candidates will most likely try to negotiate the terms of these bonuses, which gives both parties a chance to agree on some realistic goals.
Stock options are one way that small companies can compete for great talent. If a company is on the up-and-up, then options could offer a much greater reward in the long run. The new leader will then be further incentivized to ensure that the company exceeds its growth targets.
Options are ultimately about perceived value rather than the actual value. If the company’s share price is stagnant, then options might not be a suitable inducement for new leaders. In this case, performance bonuses might have a better incentivizing effect.
Senior leaders, just like any other new hire, are attracted by excellent benefits. Health insurance remains the most popular benefit, along with life cover, dental, and disability insurance. Most candidates would prefer to be able to choose the benefits that best suit their needs, which includes the opportunity to choose their own health insurance tier.
Leadership-level employees are also conscious of the work-life balance. Additional paid time off and remote working options can help attract great talent. Candidates might also feel tempted by the offer of paid maternity, paternity, or adoption leave. A company car is also an attractive benefit that offers some tax relief for business-related usage.
Eye-catching perks are somewhat going out of style as companies find themselves under greater scrutiny than ever. Perks can also create an unwelcome tax burden if not handled correctly.
Most executives would generally prefer a sensible bundle of useful perks, such as a cellphone, laptop, entertainment expenses, and access to fitness facilities. Given the recent rise in remote working, many candidates would also welcome a home office set-up as well. Companies can also offer substantial employee discounts without incurring an additional tax burden.
As well as compensation, the candidate will likely require some clarification on important aspects of the role, such as:
- Where they would sit in the new org chart
- Which leaders report directly to them
- Budget allocations for any department they oversee
- Their personal support team, including PAs and admins
- Main location for work, plus any regular travel requirements
- Details of how their performance will be measured
They may also want to dig deeper into the business’s current state so that they can fully assess the size of the task ahead of them. If so, it’s a good idea to arrange a meeting where you can discuss everything about their new position.
5. How to onboard a senior leader
CEOs get the first-day jitters just like everybody else. There’s a lot to learn, people to meet, and plenty of work to do. If the new leader is an external hire, they’ll also have to feel their way through your corporate culture and find a way to align their values with yours.
Onboarding a senior leader is a two-way process. They have to learn about you, but your whole organization also needs to learn about them. It’s quite a transition, but there are some things you can do to help make it run smoothly:
- Have everything in place on day one: The new leader should be ready to go right from the moment they arrive. That means having their support team in place and online, ready to help them navigate their way through the first day’s schedule.
- Bring them up to speed quickly: The new leader will want to start by meeting the most relevant people, such as local department heads. These people should be prepared well in advance, with reports and data on hand to help answer questions.
- Let them lay out their vision: It’s good to get the board together early so they can hear the new leader outline their strategy. The senior leader will also most likely want to address the wider team, which is an excellent way of bringing workers on board with their vision.
- Offer full support: The goal is to provide them with everything they need to succeed. At the beginning, the new person might have some trouble familiarizing themselves with the available resources. Someone from HR or the relevant business unit can act as a guide, helping them to understand the current structure and the support on offer.
- Run through the normal onboarding process: There are lots of small onboarding steps that need to happen with every employee, no matter their job title. Make sure someone sits with the new leader to talk through their compensation package and benefits enrollment. You’ll also need to cover essentials like ID badges, fire safety, data security practices, and the company code of conduct.
The goal is to make sure that nothing gets in the way of the new senior leader. You want them up and running as soon as possible, making decisions and delivering value. If you’ve got the process right, you should start seeing value quite soon.
What if it goes wrong?
Of course, sometimes, the process doesn’t yield the intended results. Recent research shows that anywhere between 50% and 70% of executive hires leave their position within the first 18 months. Sometimes, the ideal candidate on paper is not the person you need to steer your ship.
There are a few things that can help mitigate disaster, such as:
- Establish progress checkpoints: Before your new leader assumes the role, your panel can agree on short-term milestones that you want them to hit. This gives an objective way to measure a new hire’s performance over the first year, which shows that they’re on track to meet expectations.
- Perform 360-degree feedback reviews: A new leader interacts with many people, including other leaders, department heads, lower-level staff, and other businesses. A 360 review involves harvesting feedback from everyone to get a detailed picture of how the new leader is performing on the job.
- Raise concerns early: Senior leaders have a huge effect on company performance. You can’t afford to take a wait-and-see approach if they’re not meeting expectations or if they’re in conflict with the company culture. If there are doubts, other leaders should talk about them and take action sooner rather than later.
- Keep an eye on executive salaries: Many senior leaders leave their position not because they were fired, but because they had a better offer elsewhere. Salaries can change in a very short time, so you need to keep an eye on the market. Ensure that you’re offering a competitive package and take action if you’ve fallen behind.
Hiring a leader is high-stakes and resource-intensive. When you do hire somebody, you’d like them to stay in the job for a long time. One way of increasing your chances of a good hire is to use a Retained Search service that will help you find the right candidate.
6. Why use a Retained Search service?
When companies need to fill a vital role, they often turn to Retained Search. In the Retained Search model, a recruiter will work with the employer all the way, from building a candidate profile to making the final offer.
Companies might use Retained Search for any number of reasons, such as:
- They don’t have the time or resources to invest in an executive search
- They need to fill the position with a great executive as quickly as possible
- Their current strategy is not producing high-quality candidates
- They need guidance on structuring an offer and deciding on a payscale
- They’re not getting applications from candidates
- They need diversity certified recruiters who can help make the process more equitable
These are just some of the reasons that employers turn to Retained Search consultants.
How does Retained Search work?
Retained Search means that the consultant works with the company from the start of the hiring process. With a Helios HR Talent Acquisition Consultant, that process will look like this:
The Talent Acquisition Consultant sits with the hiring team and helps them walk through the steps outlined above. That means playing an active part in discussing ways this role can help deliver maximum value for the company. The consultant will work with this information to build a profile of the ideal candidate.
Helios Consultants have access to a pool of potential candidates, including people who are not currently seeking a new job. The consultant carefully selects senior leaders according to your specifications. It means that every candidate is potentially a great fit.
The Talent Acquisition Consultant acts as a bridge between the company and candidate during the whole process. They stay in contact with the candidate throughout, helping them understand the next steps of the application process. They also work with the employer to help guide them towards a prompt, informed decision.
When the company has identified the right person, the Talent Acquisition Consultant helps to broker a deal. Using their extensive knowledge of market salary data, the consultant will assist the employer in arriving at an attractive and sustainable salary.
Retained Search helps get the right person in record time. Check out what some of Helios HR’s clients have said about their experience:
“When we had an unforeseen requirement to replace our VP of HR with a Chief People Officer, we reached out to Helios based on our prior great experiences with the team. Our Helios HR consultant was assigned to us within 48 hours and began to help us lay out the essential elements of the position. Her advice, experience and insight helped us craft a position description that enabled us to zero in on the right candidate within two weeks. Our consultant scrubbed the extensive candidate list and reduced our interview workload, allowing us to focus on the person and fit. We were able to go from open position to key member of the executive team in less than 30 days without a single hiccup during the entire process.”
--Tony Crescenzo, President, Intelligent Waves, LLC
Getting started with Retained Search
When you know that you need to bring in a new senior leader, it’s time to talk to Helios HR. Schedule a chat with one of our talent acquisition specialists and find out how we can make life easier for you.