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2005 budget planning, year-end performance reviews,
Sarbanes-Oxley implementation, final tax planning,
year-end close. The list can go on and on. The 4th
quarter is a kind of purgatory - time to focus on
cleaning up the unfinished business of the current
year while simultaneously trying to think
strategically about the upcoming year. To top it all
off, you throw in a few holidays and a couple of
client/company functions, and before you know it,
you’re up to your elbows in guacamole and watching
the “Fight for the Roses” on the big screen. If
you’re like me, the 4th quarter has historically
been unlike the other 3 - it all goes by in a flash.
And, unlike the other 3, there was always a
persistent, low-frequency hum in my head: am I
really ready for the New Year?
Oh well. It’s early yet. The planning is largely
done, election year uncertainties resolved, the
budget is close-to-final and no major year-end
unexpected impediments to deal with. 2004 is slowly
becoming a distant memory. Time to start seriously
thinking about getting 2005 started off with a bang.
But are you really ready to hit the ground running
in 2005?
For many companies, the improving economy spells
opportunity. Many McDermott & Bull clients have
noted that they are planning on strategically adding
staff in 2005, but want to wait until the New Year
to begin hiring. After all, Conventional Wisdom
applies to both employers and prospective employees
during the Holiday Season: Nobody hires in the 4th
quarter. It’s always better to wait until the New
Year.
Is it? Employers often underestimate the time
required to add critical personnel and get them
ramped up so that they’re maximizing their
contribution in the year of hire. Beyond the hiring
process itself, the new executive needs a sufficient
amount of time to acclimate to the new environment,
understand its culture and become a contributing
member to the management team. Think about the last
time your firm brought a senior executive on board.
How many months did it take for that executive to
live up to his/her potential?
Let’s start with the hiring process itself.
Depending on the position and the size of the
company, this process can take a few or many months.
CEO positions can take 6 to 9 months to fill and can
absorb a significant amount of time and energy for
the company and its board of directors. For other
C-Level, SVP, VP and Director positions, even with
the dedicated assistance of a highly-focused search
firm, it’s likely to take 2-3 months. It’s easy to
underestimate the time needed for the search
process: hiring the right search firm, building the
right position specification, taking the necessary
time for the interview requirements, the scheduling
conflicts, the final negotiation on the compensation
package and the requisite background checks. It all
takes time. Bigger companies may actually be at a
disadvantage time-wise, due to the required number
of interviews and the number of people required for
sign-off.
Okay, the search has been successfully accomplished.
Now what? Part II of the hiring process is how long
it will take for the candidate to live up to his/her
potential. No easy answer here - depends on the
position and the candidate. It’s been our experience
that a minimum 3 -6 month integration period is a
general rule of thumb for a senior executive. The
picture, I’m sure, is becoming clear. Even under the
best of circumstances, a senior executive level
hire, whose search was initiated at the beginning of
the year, will only have a small slice of the year
remaining to make an impact.
Further, there are other tangible benefits gained
from early hiring. Due largely to the Conventional
Wisdom of putting off hiring until the New Year,
there tends to be less competition for talent in the
4th quarter. Further, our firm has noticed that the
hiring timeline seems to accelerate in the final
quarter. Probably because decision-makers are busy
closing out the last year and preparing for the new,
therefore tending to be a little closer to home, and
more available, during the Holiday Season.
Finally, we’d like put another fallacy to rest:
year-end bonuses. Nobody’s going to leave with a
bonus sitting on the table, right? What’s the point
of hiring now? The point, once again, is that one
shouldn’t underestimate the hiring timeline. Even if
bonuses aren’t paid until February (now only 100+
days away, less holidays), the process needs to be
initiated now, if that person needs to be behind
his/her new desk March 1st. Our Recommendation?
Fight the Conventional Wisdom and, much like
Christmas shopping, it’s best to start shopping
early. |
