Monthly Archives: October 2015

Is your hiring process being managed by tortoises or hares?

There is a quote from Richard Pratt that has always stuck with me throughout my recruitment career: “Always hire the best person for the job, not the best available. If they’re available they’re not necessarily the best.”

One of the most costly decisions an organisation can make is hiring the wrong candidate. There have been numerous studies on the exact cost of hiring the wrong person. According to a survey by The Australian, a bad hire can cost a business 2.5 times the employee’s salary. No one can deny that it comes at a huge expense. Factors include hiring costs, wages and disruption costs, but no doubt the greatest expense attributed to a bad hire is the lost business opportunities and the effect this employee can have on a company’s brand. There is also the impact this employee can having on your existing workforce’s morale even long after they have left the business.

How often is it in business that we receive a phone call from a colleague or a customer who says they needed something yesterday? When we’re talking human capital for the property and construction sector, it’s often as a result of new business or a major project win, when there’s an urgency to hire someone to start working on the job right away.

What Pratt’s saying is that many of the best candidates are not looking for jobs; they are not applying for jobs because they are well looked after, and are too involved in their current work to be distracted by LinkedIn or other social networks, which may refer new opportunities. So if the best talent are firmly engaged in their current roles, performing at the top of their field with their current employers, why consider them as prospective candidates at all? You need the right approach, but it can take time.

The Melbourne construction industry is reaching boom time levels again. With the increased activity in the building sector comes a heightened demand for recruitment. So the temptation is to rush key hiring decisions, which can often result in poor decision-making in the recruitment process. In a buoyant market hiring the right executive is critical – it’s unlikely you’ll get a second chance to acquire key people from the same talent pool. Therefore, hiring decisions backed-up by a robust search and selection methodology, which allows time to properly evaluate all potential candidates and their suitably, will lead to better outcomes regardless of the urgency of the role.

Next time you think about racing to hire because you have a need, remember executive recruitment is not a hare sprint. Be the patient tortoise who plans for the journey ahead, does their due diligence, paces themselves through the search and selection process and knows when to pause to take a breath. It’s the way forward for effective senior appointments.

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The 5 things keeping Senior Executives awake are not what you might think

What happens when you bring together a group of Australia’s top business leaders to consider the big issues? Current media headlines would have you think the TPP, China FTA, a lumpy economy, risk, governance, or the AUD would be front of mind.

In fact the headline challenges turn out to be multi-generational workforce management, the link between organisational culture and productivity, immigration, regional development, and security – both information and personal.

Economic growth, fresh political leadership and national security also featured in the discussion hosted by TRANSEARCH International Australia.

Less publicised issues also got a good hearing around the table; the debate from the over 50s corner heated up when the conversation focused on understanding the work expectations of the next generation: “We have a young team in their 20s… they’re so distracted by what’s on their phone!” and “Young women are driven, they are totally underestimated. They’re probably going to shock us all…” (46% of the participants at the TRANSEARCH Boardroom Lunch were women).

Are we too complacent about our security? Cyber security and bio security were perceived to be greater threats for Australia than brutal terrorism. The feeling around the boardroom table was that we are well protected but complacent.  Two CEOs with insider knowledge feel that at best we’re well protected, at worst we’re living in a fool’s paradise, blind to the Dark Side. A security expert amongst the group highlighted that executive protection is also soft in Australia: executives could be held for ransom as is common in other parts of the world. There’s also a very fine line between genuine concerns about security and those motivated by pitching fear based on xenophobia and racism.

A stable economic environment may have benefited professionals, but our group was careful to consider opportunities for those who also do a valuable job that is not ‘sexy work’. The truck drivers, process workers and administration employees who will be a necessary part of the future workforce.

Purpose and Meaning is understood to override salary and job titles, and many recognise that people need, regardless of their age “an understanding of where they fit in”. Brand, engagement and corporate culture, were some of the real reasons behind why people do what they do. We talked about creating very good ‘whys’ as a great way of attracting good people and engaging employees, regardless of generation stereotypes. The fact that some younger employees don’t worry so much about risk was also raised as a positive. It allows them to risk exploring new ventures and they are much quicker to recognise opportunities. As one participant said, “What a gift!”

On the subject of risk one executive stated, “I hold traditional values about personal privacy, but my son said to me, ‘technology has made privacy irrelevant.’”

Participants went on to talk about opening our borders and welcoming diversity at the executive table. We cannot underestimate the importance of finding the right immigration solution, they said. We need to consider populating our country with skilled and educated migrants, make resources available and provide humanitarian support to displaced refugees.

Focusing on regional centres, education was raised as a way of supporting regional growth. “Successful cities are diverse, safe educational centres. Education is something Australia does well,” it was said. Success stories, such as Deakin in Geelong and Monash in Bendigo mean more young people are making lifestyle choices to leave the big cities, or not to leave regional areas for the city.

In support of our bright young stars in Australia, we heard from one executive who was mentoring MBA students. These start-ups with their own businesses don’t have a lot of capital, but they are positive and have great ideas. Raising capital has been a problem, so where is the connection between entrepreneurs and investors? Some thought we need a Silicon Valley in Australia. All agreed employment growth will come from these new businesses, from those people who want to have a go. If we don’t support them, they will go abroad to places like the USA to get a break.

If you had any preconceptions about what’s been on the minds of our senior executives, I’m pleased to report it isn’t all negative. They do seem to be getting some sleep.

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Have we lost the value of knowledge?

I recently went to a ‘Clever Happenings’ talk. These are fascinating talks organised by Dr Jason Fox and sponsored by The Centre for Workplace Leadership, with different speakers every month.

The presenter on this occasion was talking about brand and sales. At one point he asked the audience, “What is it that a GP Doctor sells?” People shouted out hope, drugs and health to name a few. After canvassing the audience he thanked them and then disagreed with all of the suggestions made and said, “No, what a doctor actually sells is time!”

Now I understand this point of view and agree that in today’s business world this is true. But many of us sell more than time; we sell knowledge. The problem is, the world seems to have forgotten how to value it, at least in my world of construction consulting, or just maybe people don’t want to pay for it.

And paying for knowledge is an age-old problem. Even Wikipedia tells us “The idea that knowledge has value is ancient. In the first century AD Juvenal (55-130) stated, ‘All wish to know but none wish to pay the price’”.

When I was just a mere lad starting out in the building industry I was told the following story.

A bloke woke up one morning, went into his airing cupboard and noticed a massive dent in his copper hot water storage tank. Worried it would crack, he called a plumber. The plumber came out and had a look at the tank, looked at the dent and rubbed his chin. He went back out to his van, got a rubber-headed mallet and came back to the tank. He went to the opposite side of the tank from the dent, and with one big swing of the rubber-headed hammer, he hit the tank. As if by magic the dent just popped out perfectly. Job done. The customer was over the moon and asked the plumber how much he owed him. “£350,” the plumber said. In shock, the customer said, “£350? You’ve been here five minutes. How the heck can you justify charging me £350?” The plumber calmly looked at the customer and said, “£100 was for the call out and my time. £250 was for the knowledge of knowing where to hit the tank!” The customer paid.

That story has always stuck with me. I believe we have lost the art of defining the value of our knowledge or maybe ‘wisdom’ in this case and we get hung up on the value of time. Now don’t get me wrong, time is the most precious thing we have, we can never get it back, but we should never underestimate the value of our knowledge. So why have we got so hung up on time as the only value we have to offer, especially in the consulting world?

I think a lot is down to the fact of how consultants are procured and also the competitive nature in which consultants now compete. I have been in so many interview situations with clients where I’m asked, “What do you bring to this project?” To which I reply, “A great team, great experience, a long relationship of working with you and delivering projects on time and on budget.” To which I hear, “That’s all great Mark, but your fee is too high right now, so if you can reduce that then we can get on with the project!” It has become very tough to sell true value, especially in Australia and even more so in Melbourne.

I once worked for a large engineering firm. They worked on projects in the billions of dollars. They were working on a mine and a solution to keep stockpiles of material protected was put forward by another engineering firm. Their solution called for a warehouse to be built of gargantuan proportions. I don’t remember the exact numbers but the cost of the warehouse was enormous, around $800 million. The engineering firm I worked for was called in to come up with an alternative solution that was cheaper. Now rather than being smart and take on this challenge to bring an innovative solution with an innovative fee structure, the engineer just worked out how much time they thought it would take a number of their clever chaps to design a new solution. That fee was around $100K. Now the engineers came up with a genius design of a windbreak wall that was shaped so that minimal wind vortexes would be produced, so that the material would not blow away. The new wall was half the price of the warehouse, saving the client $400M!

Now, if the engineer had used his intellect, he could have said to the client, “We’ll charge you $100K for the time we spend on solving the issue, but we want 1% of the savings you make for adopting our solution.” If the engineer secured that agreement on this project, they would have earned $4.1 million in fees. Now just writing this makes me uncomfortable and I’m thinking that’s just too big a fee for this project! But is it really? It’s just 1% of the saving the client made. One percent! That’s nothing compared to what the project would have cost them.

Results and outcomes are not always that clear cut and our challenge as consultants is to find smarter ways of working, suggesting better ways to bring value for clients and being rewarded for the value of knowledge, not just the value of time. Time is ultimately a commodity.

A few years, ago one of my very bright team members, Hugh McGaw, wrote a paper on how the building industry should learn from the insurance industry in the way it procures fees and returns against risk. The insurance industry do this very well and set levels of reward based on complex algorithms, determined by the level of risk involved. The time element just doesn’t come into the value factor. It’s time we started to look at alternatives to the old time-based way of calculating fees and identified the true value of the knowledge we bring to our clients and projects.

Are we ready to step up to the challenge? I’d be fascinated to hear your opinions and ideas on the on the subject.

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Melbourne to New York at the Age of 65

Sometimes it feels like you’ve run a marathon just to keep with the world @work! This year, at the age of 65, long-time Melbourne running superstar and long-serving Slade Group employee Heather McBride has qualified to run in the New York Marathon. The race takes place on Sunday, 1 November 2015 and the Slade team will be proudly supporting Heather every step of the way. To find out what it takes to go the distance (that’s 42.195 km or 26.219 miles to be exact), we asked Heather about her running history and got a few tips on her pre-race routine.

How long have you been running?
24 years – since November 1991, the day I gave up smoking.

What’s your biggest running achievement?
Running my third Melbourne Marathon in a time of 3:49:05. My second most memorable achievement was coming first in my age group last year in the Sydney Half Marathon.

What’s the best part of being a runner?
The love of running, for the sense of achievement after each and every run. It can be gruelling, especially when doing the long runs; however, the euphoria is worth it… The friendships I have formed with other runners, the common ground we share although from very diverse backgrounds… The knowledge that it provides me with good health and wellbeing. Whenever I’m feeling down, a good run will work wonders. I suppose I have to admit that it becomes an addiction, but what an addiction to have!

What is the hardest part?
I don’t think there is a hard part, except when injury gets in the way.

Do you have a weekly training schedule?
I run four times per week (Monday, Wednesday, Friday and Saturday). I also like to walk on my off days.

What’s your routine prior to an event?
A big pasta meal two nights before the big day, and get lots of sleep in the week prior to the race. I eat a lot of carbohydrates as part of my normal diet, which I find is of enormous help.

Do you have any superstitions before a race?
I am not at all superstitious and I very rarely get nervous before a run – although New York will probably be the exception. I am feeling nervous already!

Any food just prior to a run?
I don’t normally eat before a training run, except for long runs. On the morning of a marathon (or half marathon) I will have a banana, toast with jam and a cup of strong coffee (caffeine gives you a lift). It is important during a marathon to keep the fluids up and also to have a couple of power gels in your pocket.

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Nobody likes a pouting recruiter

“A man convinced against his will is of the same opinion still”

– Dale Carnegie

Once, early in my career, I accepted a new role despite my misgivings about the position. The recruiter talked me into it. Female engineers were quite a rare find in the late 90s and recruiters were constantly approaching me with engineering opportunities. Unsurprisingly, I didn’t stay in the position for long and in hindsight, I should’ve backed my instincts and walked away from the opportunity.

The ‘hard sell’ is rarely effective in the long term (particularly within an executive search context). I’ve seen it at work in business, as well as that personal experience working as an engineer. I don’t blame the recruiter for the outcome by the way – it was my choice to take the job against my better judgement, but the experience has shaped my approach to recruiting as an executive search consultant.

As a hiring manager, you may have observed that candidates who were subjected to a hard sell, more often than not, withdraw at some stage of the recruitment process. They’ll find an excuse to pull out, accept a counter-offer or won’t be a long-term hire if they do join the company. It’s not a great result for anyone: HR, the hiring manager, the recruiter or the candidate – not to mention the significant cost to the business in beginning the whole process again. Ethical and professional recruiters seek to add value to their clients on a long-term basis and are not simply seeking short-term commercial gain.

Passive candidates, who form a major part of the executive search process, may express a little hesitation and reluctance on first approach. This is completely normal and does not necessarily indicate a lack of interest in discussing the role further. However, there’s a big difference between informing a candidate about an opportunity and delivering a sales pitch.

My approach includes fostering dialogue with a prospective candidate and providing them with as much information as possible on the role. Once it is established that their skills, culture fit, remuneration and career goals are a good match, I encourage them to participate in a discussion with my client, as position descriptions are no substitute for a face-to-face meeting and the insights that are obtained through that discussion.

Should the candidate then decide that the opportunity is not one they wish to pursue, I respect their decision, thank them for considering the role and do not press the matter further. This approach has allowed me to forge trusting and long term relationships with my candidates; they understand that I will respect their views, will listen and am not purely driven by commercial considerations. Similarly, my clients have confidence that I’m representing them in the market in a professional way and respecting all candidates throughout the process.

Personally, I still suffer from the inevitable disappointment when an ideal candidate decides not to proceed with a role. It’s particularly hard if I feel that the opportunity meets their expressed goals and would provide them with a chance to further grow and develop professionally. However, nobody likes a pouting recruiter and it’s futile – not to mention unprofessional – to let that shape your behaviour or treatment of the candidate.

It’s important to remember that there are usually other factors involved that may be guiding a candidate’s decision (which they may not feel comfortable disclosing), and it’s not possible to address every contingency. In fact some of these individuals have returned to me in later years, when I have had the pleasure of placing them in their next role, whilst others have engaged me as a consultant.

It’s risky changing jobs. Candidates are acutely aware of the need to perform in the role within a new organisation and team, long after an executive search consultant has moved on to their next assignment. So forget the hard sell and take my advice: Behaving professionally, respectfully, ethically and with complete transparency always yields positive results in the long term.

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