Michelle Rodger: Hiring new blood? Choose wisely or pay dearly

Published on Saturday 17 April 2010 14:29

IT'S possibly one of the most challenging aspects of being in business – reaching that point where you know, in your heart of hearts, that you're no longer the best, most qualified person to lead the company.

Like it or not, your business – whether it's facing a rapid growth spurt, seeking investment, launching a new product or service, the retiral of a key director, or maybe even considering an exporting strategy – needs more than you can give.

Recognising that you need new skills and experience on board, that you need to bring in a fresh pair of eyes and experienced hands is the hardest part of the process.

Or is it? The most challenging aspect of recruiting a new executive may actually be the process of finding the right person with the right skill set and who is the right culture fit for your organisation. Because getting it wrong can be costly.

And right now, as companies start to take advantage of the opportunities arising as we emerge from the recession, it's crucial to ensure the management team is the best it can be, and this process will be happening increasingly in boardrooms around the country.

Peter Felix is President of the AESC (Association of Executive Search Consultants). He admits the recession has been tough for his members, but says the last three months have been good – now that businesses are starting to ask themselves what are the opportunities going forward, and do they have the capability, the best talent available?

The concern, particularly for SMEs, is that they are too small to attract top talent. Not true, says Felix. Every organisation has opportunities and challenges both financially and in job reward and satisfaction; senior executives are motivated by challenge, and just because you are small doesn't mean you can't recruit really good people, you just need to understand how to position yourself.

"You might be able to get an A player, but you've got to be realistic. You can't just put an ad in the paper and hope to get the right person."

It's not a quick fix either. Finding your next MD can be – indeed, should be – a lengthy process of process of planning, due diligence, checks and balances. And ideally it ought to be part of your overall business strategy

From the point the decision is made to hire to the making of a final offer, the process should be meticulous. When it comes to checking references, attention to detail is absolutely vital, and this is a job that shouldn't be left to the last minute.

Experts say that due diligence on the candidates should be done on all candidates at the shortlist stage, before a final offer is made. References shouldn't be taken up after an offer has been accepted, and all qualifications should be checked carefully.

Ian MacLeod, managing partner at Odgers Berndtson, says they do pre-reference checks on candidates, take two to three informal business references such as talking to a previous colleague who has worked with the candidate extensively or perhaps a key customer, then they check all qualifications and consider the more sensitive elements such as criminal records, or Disclosure Scotland.

For McLeod, this part of the process is crucial. It culminates in a conversation with the candidate's current boss (once the final offer has been made).

"Personal references don't hold water," he says. "Nominating people who are obviously going to give you a good reference is pointless. And you have to have a conversation with the employer the candidate is leaving. If they can't give you their boss as a reference that would start to ring alarm bells for me."

Policies and processes aside, there's still a significant emotional element to sharing the reigns, let alone handing them over completely.

Recognising that the time is right to move aside is clearly just the first step, but if the business owner or directors aren't emotionally and psychologically prepared for the whole process it can become difficult.

Executive search consultant Sean Buchan says the key is to find a balance between putting up barriers to hiring and having a fairly rigorous search and selection process.

Is there room for gut feel and intuition? Absolutely, says Buchan, UK general manager of Maxwell Drummond, particularly in entrepreneurial or family-owned businesses where culture fit is so important.

"Having the right skill set is one thing, but culture is important too," says Buchan. "Once you have defined what it is about your culture that's important, then you build your search and selection process around that.

"But you should always be guided by your intuition."

The cost of a bad hire is significant, not just in time lost or money wasted, but also potentially in damage to the business and the culture, and ultimately to the confidence of the owners to embark on that road for a second time.

It's clearly not something you want to be doing twice.