Bubble Hopping: Economic Intelligence in Executive Search
The longer I recruit for a living, the more I see recruiting inextricably linked to the economy. Our finger is on the pulse and, at any given time, if we’re honest, we can give you a pretty accurate read on whether the patient is thriving or on life support.
In fact, the longer I recruit, the more I start to think like a VC. At least, that’s what venture capitalist Stewart Alsop observed when we got together at the Money: Tech conference in NYC, a gathering where Web 2.0 meets Wall Street.
Stewart is a partner in Alsop Louie Partners, a former general partner with New Enterprise Associates, and the former editor-in-chief and executive vice president of InfoWorld. Whenever we get together, our conversations careen from news observation to relevant startup ideas back to news observation back to hot startups.
Stewart uses news and economic intelligence to be opportunistic in his investments. He focuses on spotting trends early, deciding on the direction of a new technology or market, and ultimately, on getting out in front of everyone else. The same approach works well in recruiting. Particularly when times get tough economically, we need to use economic intelligence in executive search research.
What follows are the five lessons for profiting from a down cycle
- Lesson one: Conserve cash. Now is the time to sock away as much cash as possible, both personally and professionally. Don’t spend needlessly, and don’t rack up debt. There is a great deal of speculation on how bad this could get. You may need the cash to survive. You may need it to serve as a bridge between the time you work and/or pay your people and the time your client pays you. But even more important, you or your company may be presented with amazing opportunities to acquire products, services, or even other firms at a deep discount. . .that, my friends, is how fortunes are made.
- Lesson two: Find less-expensive alternatives. The tougher times become, the easier it will be to negotiate great deals. So use that to your advantage. If you’re on the corporate side and have a vendor who is non-negotiable, such as a retained or contingency search firm that always charges the same percentage of annual compensation, consider alternatives. Also, expect more from your vendors, such as having the vendor hand over all of its candidate research in addition to all the candidates. Alternatively, you might want to experiment in the economies of scale brought by candidate pipelines in place of hugely inefficient one-off searches.
- Lesson three: Grow your ROI. Corporate recruiters face downsizing in down economic cycles. Sometimes, entire internal executive search teams get shuttered. So if you haven’t taken the time to prove your worth in dollars and cents, you need to start doing the math. Approached the right way, you may uncover hidden ROI to explode your numbers for the better.
- Lesson four: Scan the horizon for opportunities. Set up alerts in Google News or Indeed to gauge who is hiring or laying off. I just spoke with the CEO of a startup in the Silicon Valley who has, within the past two weeks, noticed an uptick in the number of viable candidates at his doorstep, most of them applicants from other startups that ran out of cash. There is opportunity in that. Great talent is becoming easier to acquire: you just have to get them first. So use economic intelligence in executive search. Invest in some serious phone ID and org-charting of your favorite target companies and proactively recruit those candidates before they put their resumes on Monster for all the world to see.
- Lesson five: Jump from one bubble to the next. As the economy stumbles, hop from one bubble to the next. Instead of worrying about the current bubble that’s deflating, start thinking about where the next one will emerge and pounce on your foresight.