executive hiring: Mid-2009 Update

Here, in no particular order, are some quick thoughts and observations on what we are seeing at mid-year:

Shift in Demand.  We’ve seen a notable increase in demand for operations executives.  Companies recognize it will be tough to grow or even maintain sales this year, so they are looking to increase profitability through more efficient operations.  Of course, we also continue to see strong demand for “must have” functions, which in the medical markets we serve are things like regulatory, clinical, and quality.

Lower Expectations for Compensation.  Candidates have lost pricing power, and they know it.  There is a glut of good people on the market in almost all functions.  In addition, many companies have announced across the board salary reductions.  Smart candidates are focused on getting the best fit for their skills and aspirations, and aren’t pushing on compensation.

Relocation? No Thanks.  The terrible real estate market has made candidates and companies much more reluctant to entertain relocation.  Companies don’t want to incur the cost, and candidates don’t want to deal with the difficulty of selling a home.

Companies Are Taking it Slow.  Even after deciding to make a hire, companies are moving slowly.  Most companies won’t be making many new hires, so they want to make every one count.  In this market, they can be very demanding.  As one executive job seeker put it, “If companies have a list of ten candidate requirements, they can get eleven.”

Upgrading is Happening.  There’s so much good talent available we’re seeing more and more companies upgrading.  A sales executive recently told us “I am switching out our weak performers.  There are so many good people available; it’s a great opportunity for us.”

Quarterly Cycle.  We’ve noticed a pronounced quarterly cycle in our business that is a new phenomenon.  Near the end of each quarter we receive a flurry of inquiries about search projects.  Then things go relatively quiet until the process repeats itself.  Although we have no hard data, we suspect that the cycle is being driven by economic uncertainty, and that companies are waiting until they are confident they will make this quarter's targets before they authorize next quarter’s discretionary spending.