We are pleased to highlight this month a copy of the 2018 Performance Management Study completed by the MRINETWORK our parent company.  Our office is part of a Global network of over 1,500 recruiters worldwide who work each year to provide outstanding in-depth real-world data and tips from the trenches.

In October of last year, our marketing department conducted the 2018 MRINetwork Performance Management Survey, surveying candidates and employers across the U.S. to assess strategies that hiring authorities are leveraging to attract and retain talent vs. what employees and candidates want employers to prioritize. Hiring authority and candidate attitudes were also compared on recruitment tactics, including perks and other concessions that employers are making to hire top talent in a tight candidate market.

At our office we definitely see an emphasis on perks in the Furniture and Appliance verticals.

Relocation - Candidates are not relocating as readily or changing jobs without serious consideration and motivation including a healthy bump in compensation and vacation time. This is being driven by competitive market forces. They know that another opportunity may be just around the corner if they stay in place.

Health Insurance and Paid Time off – This area continues to be big issue as well and the cost of Health Insurance is causing financial pressure with candidates transitioning from company to company. These include large Cobra costs and differences in coverage company to new company can impact a candidate’s decision.

Counter Offers - Another trend we've seen is a big increase in counter offers. We take measures on every search to prevent counter-offers from happening. We work with the client to pipeline the candidate’s rapidly while synergies exist and we work with the candidate/executives to know their salary requirements job transition and relocation capabilities.

We hope you enjoy this study which details the top workforce challenges that employers will be prioritizing in 2019.

In the executive, managerial and professional labor market, unemployment has been hovering around 2 percent, leaving companies across many industries struggling to find top talent. In a survey conducted by The Wall Street Journal and executive advisory group Visage International, University of Michigan economist Richard Curtin discovered that “the biggest challenge confronting firms is their need to expand hiring in an already-tight labor market.” As a result of increased competition for high performers, employers are now more willing to make concessions to move their organizations forward.

When looking at the Furniture industry niche’ we don’t have data specific to our industry to tell us whether we match the national data.  However, I can tell you there is no shortage of calls into our firm and requests for assistance especially within the sales organizations across all Furniture verticals.

Here’s some advice that may help your organization with its hiring efforts:

1. Keep an open mind

When hiring managers look for potential employees, they often only focus immediately on the ideal candidate who has all the desirable qualities for the role. It’s important to recognize that an applicant may not need to possess every single one of those qualities to become a great hire, and rigidly sticking to your list may mean that you lose out on a candidate who could be successful in your organization.

Someone can have exceptional educational and work backgrounds, and still fail at your organization if they aren’t a good cultural fit, or if they don’t share your core values. Think about the type of person who will fit in among your employees – the mentality they’d need to thrive and the interpersonal skills that will help them become part of the team.

After you draft a job description, revisit each requirement to determine if it is absolutely needed. You may find room for negotiation on professional designations or technical skill sets that would be nice to have but aren’t essential to the job. Look beyond your wish list to see who might thrive in your company’s environment even without all your ideal attributes.

2. Expand your talent pool

If you insist upon finding a candidate you don’t have to train, you could add months to your search for a new hire. You could probably train someone in that amount of time while also benefitting from the value that person may add in other ways as they ramp up. Look for coachable, high potential candidates who have transferrable skills that will help them overcome the lack of specific experience.

According to the 2018 MRINetwork Performance Management Study, nearly 80 percent of the employers surveyed agree or strongly agree that finding quality industry-experienced talent is more difficult than ever, and that their companies are more likely to hire people who have transferrable skills, but lack industry experience. By considering those with transferable skills, you can significantly expand the number of applicants and focus on more general skills, such as organization, teamwork and communication, which might be just as important for the role, but are much less teachable than specific, technical skills.

Both employers and candidates see poor communication as a problem in this area, according to the study. Companies need to make it clear they are open to candidates who have applicable expertise, despite their lack of industry experience. Candidates need to focus on how they discuss transferrable skills during the interview process and demonstrate how those skills can be applied to a different industry.

3. Creativity and Accountability – get the team involved.

One way to amp up your talent pool is to involve the team, assign accountability to anyone with Manager in their title within your organization.  Make it clear that hiring for their department is under their control and that HR is a strategic partner.  Approach hiring in this labor market much like you would if you were opening a new store, hold events, promote the position, including the two P’s.

• Positives – why would someone work here? Have someone who is successful do a presentation at the Open House or Hiring. This can be a top gun in the role, have them tell their success story and promote it.

• Potential – what is the potential of the position – where can they go both in income and career pathing. Lay out success stories and promote on the Career Center on your website.

4. Offer one time sign-on perks that attract candidates

The MRINetwork study also indicated that half of the surveyed employers are increasing the rate at which they offer sign-on perks. Among the top perks that organizations are willing to provide are company-paid health insurance, sign-on bonuses and moving expenses. Candidates are on the same page as employers about the desirability of these benefits, with 76 percent citing both sign-on bonuses and health insurance, and 54 percent citing moving expenses as most important to them. A number of employers stated they are willing to offer tuition reimbursement (33 percent) and even help in repaying student loans (23 percent) as incentives.

Employee perks can have a significant impact on your ability to attract desirable candidates and lower employee turnover. Some of the standard benefits packages offered by companies just aren’t cutting it, which is why many firms have decided to augment them in order to stay ahead of their competition for top candidates. As one hiring authority observed, “There are severe shortages of qualified employees in many sectors of the labor market. This makes it an employee’s market and it thus requires incentives (higher pay, bonuses, etc.) to acquire and maintain quality employees.”

An interesting finding of the survey suggested that while employers are boosting sign-on perks, many candidates are unaware of the potential perks they could be leaving on the table. Organizations will need to become more forthcoming about these perks during the hiring process and address the skepticism that some candidates have about sign-on perks. “Companies are willing to pay for one-time extras to get the people who best match or exceed their ideal candidate profile,” said one potential candidate, “but they may not, however, be willing to start at a higher compensation level.”

In a down market, candidates will be less demanding and more flexible with employers. But in today’s market, applicants have numerous options, so it is imperative that that the way employers approach them and the advantages that are offered give candidates every reason to want to join a company.

If you do offer a one-time sign on bonus, pay for significant moving expenses or other perks, it is very standard and acceptable to require a commitment from the employee using a Reimbursement agreement.   Feel free to call my office and we are happy to share our knowledge of these agreements including clawback provisions to recoup expenses.

Blog Post by: Bill O’Malley, Chief Recruiting Officer at Connector Team Recruiting.  Connector Team is recognized by leaders and leading consultants as the premier search firm in the Furniture | Appliance and Sleep vertical space. Connector Team is an affiliate office of MRINETWORK recently ranked in the Top 10 in Recruitment Firms by Forbes Magazine.

Direct from a Managing Partner’s desk…here is some insight and tips on hiring an Executive Search and Recruitment Firm. We hope you enjoy this month’s blog article. Our goal to provide real world insight on selecting a search firm in today’s talent driven marketplace.

When speaking to a Recruiting professional these are just a few ideas and tips including questions to ask before making a choice.

• Does the search firm demonstrate the working knowledge in your industry? How long have they been practicing and are they subject matters in your industry?

In other word, a Health Care Recruiter is very different from an Aerospace Recruitment firm.  For example; a Health Care specialist is going to have very little knowledge base of the demographics and the current trends in those industries that are outside of their comfort zone.

• Does the search firm know and understand the competitive forces in your industry and the headwinds that you face? Did they ask specific relevant questions on the must haves for the role.

• Has the firm completed searches at the level you are seeking, for example; Director of Sales – Business Development or Chief Financial Officer are two divergent roles to fill.

• Do they have the network of contacts – the key here is to understand the average time to complete a search, often referred to as “average time to fill.” We look at the time to fill formula as the date the search assignment began to the start date.

• Who is going to complete the search? Is a competent Senior Account Executive overseeing the search or is most of the work being done by a support person?

• Ask about the cadence of the search and the “all important” progress reports? How long will it be before you can expect be begin interviewing the first candidates?

• Did the search firm complete a detailed needs analysis to gain the knowledge of your organization so that it can gain market intelligence on your company, its business units, products and services, corporate strategies and outlook.

Tip: Keep this in mind, the search firm you engage will act as your ambassador for your company and they will be the first point of contact as an arm of your company.  You’ll want the person conducting the search to be both likeable and possess the ability to engage, communicate and assess talent in your industry.

• Contingency or Retained Search Firm – ok, here is the difference from my chair. A contingency firm is generally a higher volume firm and involves the Account Executives having a larger number of clients and assignments. We hear it all the time from within the Recruiting world that it’s a numbers game and typically these firms will lead with their latest and greatest top talent candidate.  Their sales pitch includes references to statements like, “you don’t have to send me a retainer, if you don’t like my candidates… you don’t have to hire them.”  A retained search firm on the other hand is going to want some “skin in the game” from both parties.  This typically entails a deposit up front, another progress payment at the submission stage and final payment on completion.  By their very definition you are hiring a specialist with a retained search firm and they typically work on projects and assignments and they can dedicate resources accordingly.  You must weigh the pros and cons of a retained search firm including comparing their performance with contingency firm results.

• What is the search firm’s retention rate also known as the stick rate during the first twelve months following placement? We believe the stick rate should be 90% or higher. It is our belief that nobody’s perfect.  Recruiting is a people business and things can happen outside of the company, executive and recruiter’s control.

• Is the firm a Relocation Expert? In today’s tight labor market, a firm may have to source executives that require relocation. In today’s economy, a firm that is not comfortable handling relocation can really cost you landing an A-level top talent.

• What is their policy on travel and expense reimbursement for candidates.  A full-service firm is also a Relocation Expert assist you and will also act as a true concierge arrange all interviews including expense reimbursement to the candidates.  They will pass through the final candidate travel expenses to the company at the completion of the assignment.  There should not be administrative costs to helping with travel and there should not be delays in getting candidate’s reimbursement for their travel.

• Has the firm completed a compensation analysis prior to presenting your offer to the candidate? In other words, do they know that the candidate will accept your offer or are they just hoping for the best. A wise man once said; “we don’t believe in hope, we believe in executing and knowing the details.”

• What is the typical guarantee; on average we are generally seeing 90 days, however, guarantees are all about risk management. The higher the search fee the higher level of guarantee. Ask the firm about their policy and what are the details.  Most firms will produce additional candidates in the event of a performance issue or a voluntary resignation within the guarantee period. It is extremely rare to see refund policies in any search firm agreement and for that matter in any professional services agreement in general.

• Search Fees – Let’s talk about the all-important fee basis for executive search firms.

We find today that the average fee in the US is approximately 21% of the base salary and it can be as low as 15% for some contingency firms. We have also seen some Retained search fees going as high as 35% for search assignments at the C-Level.

Just like hiring any professional, when you hire an executive recruiter the key is to focus on the result. At the end of the day your goal is for the search firm to find you a High Performing A-Player.  If the firm does not perform then they have Mis-Fired and produced a Mis-Hire.  The cost of Mis-hire will have a huge negative impact on your bottom line.

The cost of a great hire is sometimes hard to quantify but it can really impact not only your sales but also your bottom line. That same great hire produces what I call a golden affect inspiring and influencing the people and improving their morale.

Finding and sourcing servant leaders is an art form. We believe that when you interview a recruiting firm and ask the right questions, you should hear a high level of confidence and engagement from that search professional.  This intuitively will tell you whether they have the right stuff to help you with your search assignment.

So, there you have it, a guideline to help you hire the right search firm.

Blog Post by: Bill O’Malley, Chief Recruiting Officer at Connector Team Recruiting.  Connector Team is recognized by leaders and leading consultants as the premier search firm in the Furniture | Appliance and Sleep vertical space. Connector Team is an affiliate office of MRINETWORK recently ranked in the Top 10 in Recruitment Firms by Forbes Magazine.