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Senior Executive Recruiting - Market Flaws and Inefficiency

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Category: Articles
Date Published: 2014-10-26

Senior Executive Recruiting - Market Flaws and Inefficiency

An efficient market is characterized as one in which prices reflect all available information. The faster that information becomes available, the more efficient the market. The high end of executive recruiting, arguably, falls far short of efficiency by this analysis – and arguably, to the detriment of both the executive and the employer.

Information enables buyers and sellers to find each other, in the first instance, and ultimately it determines price. In the marketplace of senior executive recruiting, information is in rather short supply. We are routinely told there is a vast ‘unadvertised’ jobs market. That, in itself, should raise some concern. If not advertised, how will a fair contest be run? More importantly, will the best available candidate even be selected for interview?

Undoubtedly networking plays a significant role in the unadvertised jobs market. Through networking, referrals and recommendations engender introductions and dialogue and ultimately lead to hirings. Networking helps employers reduce the cost of hiring, and executives may be richly rewarded for investing time, cost and effort in an energetic networking regime.

The flaw, in our experience, is that a vast proportion of the most successful senior executives simply do not have time in their lives constantly to monitor the market – a market which by definition is ‘hidden’, thus ensuring their best effort will not necessarily discover it. Passive executives must surely lose out to others who, for whatever reason, can afford a greater commitment to networking. Employers may never even be aware of their best qualified potential candidates. They may be overpaying for the one they have selected. 

In other words, the market fails to provide a balanced exchange between Supply and Demand. 

This information gap at the high end of executive recruiting, and especially where confidentiality is a critical factor, remains an issue for employers and executives alike. The role of discreet intermediary falls to headhunters, whereby the employer issues a mandate and the headhunter works to the mandate. However, the headhunter’s role by definition satisfies only one side of the equation, regardless of the excellence of their research and their candidate review processes. There is no market driven input from the other side.

Who researches and approaches an employer on behalf of the busy, loyal, committed, successful, conscientious senior executive, nurtured by their employer, under scrutiny from all stakeholders to perform, under pressure from all sides to remain in situ? Where would the literary world be without the literary agent? where the theatre without those who promote the actors? Indeed, where Hollywood?

It cannot be right or just that a successful executive with ambition and talent cannot explore new horizons without jeopardizing their position, their reputation or their sense of loyalty. It is time that senior executive recruiting became a more efficient and exciting marketplace – one in which information can be found, protected as necessary, and directed to those who need it. One in which the supply side as well as the demand side is in a position to issue and gather relevant information quickly and easily – and to act upon it without delay. We look forward to seeing the flaws in this market addressed, and with greater efficiency, greater benefit for all. EA Select may be a small but important step in that direction.


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