Post Recession: Executive Pay on the Rise

01/04/2013 02.46 EST

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In the years leading up to the recession, the talent market was hot. Unemployment in 2007 was hovering in the 4.5 percent range and U.S. GDP growth – while not as robust as the late 1990s – had recovered nicely from the business and geo-political turmoil of the early part of the decade.   These factors created a business environment where the need for new senior executive talent was at a premium, and the price companies were willing to pay for such talent showed it.   In a recent study of our executive placements since 2006, we found that executives changing jobs in the two years leading up to the financial meltdown enjoyed a windfall in terms of compensation increases. On average, they were receiving an increase in total compensation of almost 25 percent.   Executive pay drops with the economy – 56% in 2 years   Adding to low unemployment and high GDP growth, a key demographic issue seemed to be fueling this increased appetite for talent: the upcoming mass retirement of the Baby Boomer generation. The eldest of the Baby Boomers were turning 60 in 2006. They had recouped their investment losses, their retirement accounts were bursting at the seams, and they appeared on the verge of enjoying the “New 40” at their leisure. Then, well, you know the story.   As the enormity of the financial meltdown took hold in late 2008, it threw U.S. corporations into turmoil. At first, they were paralyzed and began instituting hiring...

How’s the Job Market?

08/08/2012 03.51 EST

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Being an executive search consultant brings with it a variety of occupational hazards.  When people discover my profession, they immediately work the word “headhunter” into the conversation and then apologize to me in case I’m insulted by it (I’m not, but I don’t embrace it).  Or they send me copies of resumes from friends and family members who are out of work so I can find them jobs (not what we do).  Or they tell me they have been thinking about “making a move” and ask if I will meet with them to help.   But the biggest occupational hazard in my profession is having a snappy, relevant, current answer to a question I get many times each week:   “How’s the job market?”   People ask this question with the expectation that there is one discrete answer.  It turns out there is one answer, but it isn’t the answer people want to hear.  Because the real answer is this – “It depends.”   First of all, it depends on where you want to live and how much money you want to make.  Secondly, it depends on your skills and the demand for those skills.  It also depends on how up-to-date those skills are.  Could you write an article for a business publication about where your profession is going in the next five years – or would you be more likely to write about how your profession has lost its way and will never be as good...

Replacing Executives When They Leave…

05/17/2011 10.54 EST

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Where are the reinforcements? I was looking at some data this week about searches performed in our firm over the past five years.  What I saw supported something we have been seeing in the retained executive search business since the start of the Great Recession. Five years ago, about 80% of our search assignments were initiated to replace executives who had left their jobs for some reason.  It might be retirement, relocation, promotion.  Some were lured away for better jobs in different companies.  But whatever the reason, the job was open and the company needed to fill it.  Some years, 90% of our assignments were to fill vacated jobs. Last year, 60% of our work was done to fill a vacant role, while 40% was for newly created positions.  So far this year the trend is continuing, with assignments for new roles outpacing replacement roles. So what does it mean? During the recession, many companies froze their hiring, people did not retire and “stars” were not answering recruiter’s calls.  When a job did open up, the company often divvied up the position’s responsibilities between other executives or let the number two person take over or just made due.  Whatever the strategy, the result was the same – fewer people were doing more work.  Still, with all the depressing economic news, no one was about to complain.  Employers didn’t have to tell people “You’re lucky to have a job”.  Employees were saying that to themselves. Now we are...