Market Update

The current market for hiring A Players is downright brutal in the San Francisco Bay Area. A lot has been written about it. In any market, A Players, the top 10% of talent, always have opportunities, including the job they are in. But these are times I’ve never seen before. Here are a few examples and a few suggestions.

The harsh Reality

“My current commute is just 15 minutes. The CEO I met with (at your client company) was great. I could see myself working with him. Our company isn’t growing. Yours is.  I would have a faster path to CFO; I can see that.  However, the commute would be 45 minutes even if outside of the main commute hours. Even if I worked at home some days, I have a four year old and don’t want to be that far away when I'm in the office.”
“My current commute is 45 minutes on the Bart. I would need to drive an hour, outside of the main traffic hours for your opportunity. Even though working a day a week at home would help and your role is a path to greater responsibilities in a faster growing industry than my current one, it’s too much of a lifestyle change to drive. “
“My current company was purchased. I’m starting to look, but I’ll only talk about software.”
“I really need to reduce my commute. I’m driving an hour 15 each way and I have a young child. Thank you for bringing your software opportunity to me, but I realized throughout this process that I really want to stay in consumer.”
“My child’s day care is 5 minutes from my house and my current job is 10 minutes. The new job may be half an hour. Although it’s a step up by giving me broader operational, cross functional experience, and even though you’re open to a reduced work schedule of 80%, I need to be able to get home every day to have lunch with my parent who needs my help.  There’s a lot going on in my life. Two years from now would be better.”
“Although your role would take me from Sr Manager of a large company to VP Finance reporting to the CEO and the company has seen strong growth in the last few years, I am 10 minutes away from my job, yours in 30 minutes and it’s not fast enough growth for me.”
“I’m done working full time. I can get so much contract help and just work 3 or 4 days a week then take time off. I’m going that route at this point in my career.”
“I’m not looking now so close to Thanksgiving, but would you call back on February 1st? I might be open then.”

Compensation - Is There a Gap?

I'm compelled to comment on the topic of gender pay gap which has received more attention than ever.  Companies we work with care most of all about success for the company. They understand that if they don’t compensate AND provide a career opportunity if the candidate is still in career growth mode, the best fit professional won’t join or won't stay long if they do join.

Companies want the best talent......

Our clients have always beeb open to the very best hire and are eager to find a diverse slate both in gender and ethnicity. Our firm experience is that pay is appropriate for the skills and potential of the particular professional. Part of Colosi Associates' value is counsel regarding compensation.  If a potential client isn’t open to our advice, by definition, we don’t take the assignment in the first place.  It’s not a discussion of pay depending on gender, but just compensation, period, so I have already narrowed the assignments I'll take to companies who see the value of pay for performance. 

Trending....

Pay has most certainly increased for financial officers. Especially in the last few years – roughly 20 – 30% but very dependent on the situation and relative components (base, incentive, equity, other).

Women.....

Women are being offered opportunities with very fair total compensation in the tech sector.  Maybe they don’t want the tech job, like my example above. No one writes (much) about that. To get more women in tech, more need to want the industry.  

We should be plenty afraid of the EEOC’s pay police as they request information on pay and plan to determine what fair pay looks like without all the information beyond the W-2 that defines the offering.

What I foresee...

Searches for the Perfect Fit Financial Officer could take longer than the 60 – 120 days that was fairly normal in the past. No matter how much effort is afforded the project, no matter how fast you act. Even though softness in the tech space is reported in the Bay Area, I don’t see this increasing the A Player talent supply by any significant measure.

Why? It’s not usually the A Player who is cut from the ranks if there are layoffs. And the Finance A-Player, perhaps a more conservative functional officer anyway relative to other functions decides it’s too much risk to make a change until things get better. 

Never has it been more important for hiring companies to:

  1. Understand that the population of A Players you’re seeking is much much smaller than you imagine. 

    • When I was a technical professional hiring manager, I imagined that there must be thousands of candidates. And what I most certainly did was overestimate how interesting it is to work for me and my group while underestimating the effort needed to provide an A Player the opportunity they can’t refuse. It’s the over/under gap that’s my job to close for you!

    • Get clarity on what draws and keeps people in the company and working for the particular hiring manager

    • Each company is unique. Each hiring manager is unique to work for. Each role has a specific context within that department.  Why do people stay at the company?
       
  2. Figure out what career experiences candidates can gain in the role that they don’t already have.
    • Don't create a list of must haves and marginal opportunity
       
  3. Strategize about how to create an exceptional career opportunity for potential candidates
     
  4. Find out in the first interaction with an A Player potential candidate how he/she defines an exceptional opportunity in terms of the five F’s – fit, family, fortune (comp), fun and flexibility. 
    • Each candidate values these F’s very differently from each other, and then each candidate values these very differently at different times in his/her own individual career continuum of years.
       
  5. Understand that due to the dramatic change in commute times, the candidate population is likely much, much smaller. It’s not the whole Bay Area. 
     
  6. Understand that hiring the A Player who is still growing a career and hasn’t become the CFO but has the CFO role in sight is a much more challenging hire than hiring an experienced CFO. It will take longer. Why?
    • The band or population of professional growing a career is very narrow.
    • That caliber person stays in the band a few years then moves up.
    • Once in the CFO slot, the person progresses, but perhaps at a slower rate and may stay in the private company CFO role the rest of his career, serially helping companies scale.
       
  7. Accept that the “stars lining up” must occur for the hire to happen.
    • You may need to bring on interim resources in case the search goes longer than you thought.
    • A CEO said to me, “You must have 20 CFOs in your back pocket.” It’s true that at any point I can think of well qualified talent for just about any client role. But the key is “qualified AND INTERESTED AT THAT PARTICULAR TIME.”
    • This is why every search is a combination of the network you know and identifying new talent. A candidate’s shelf life it truly shorter than software.

How to succeed in making that critical hire

  1. Broaden your thinking a couple rungs beyond that small bullseye you were originally thinking. (Must have a CPA, Must have an MBA, Must have Big Four experience, Must have our industry).
    • Define your high priority accomplishments for the role and then evaluate for potential-to-learn for everything else that's needed for success. It’s more work to evaluate for potential than to verify the already-been-there. It’s more risk to hire someone outside your industry.
       
  2. Be prepared to pay the full market value for someone who would have everything you hoped for but has only some of the past accomplishments
    • If your total compensation is an absolute maximum that isn’t quite market, hire the best A Player you can who will see your opportunity as a stretch and value your coaching to get him/her there. This happens in non profit when they look to bring in someone from the for profit world.