This is leaving companies, leadership consultants and even boards in a quandary as the time taken to fill a CEO/CXO vacancy – from the start of a search process till the person joins the new company – has extended more than ever before, said people linked to C-suite searches.
“Sometimes there is radio silence at the very last minute. Earlier this was a challenge in the middle management level searches but now it is common at the C-suite level,” said Jyoti Bowen Nath, managing partner at Claricent Partners.
“Even if we have a backup candidate it pushes the search process by another 2-3 months,” added Nath, who had four C-suite candidates who reneged at the last moment.
“Just compensation conversations are taking a month sometimes versus 1-2 weeks taken earlier,” said R Suresh, managing director of Insist Consulting. “Discussing a compensation package involves a lot of posturing from senior candidates – going to and fro multiple times. It is like a mental game,” added Suresh.
“It is the flipside of a vibrant leadership search market where seasoned CXOs are in short supply,” said Nath. Chief executive officers, chief finance officers, chief legal officers, chief technology/information officers, and chief sales officers, are highly sought after functions in large traditional sector companies, new-age brick-and-mortar firms as well as several IPO-bound startups, said experts.RR Nair, former CHRO at HUL and now CEO coach and HR strategist, said: “The cost of an empty chair is well known.”
“There is pressure on search firms and frustration among hiring teams. A long time to hire is a by-product of shortage of experienced candidates in relevant domains and industry,” said Nair. “And the demand is indeed high. Often the hiring process is too long; hiring teams struggle to reach consensus resulting in the best candidates finding roles elsewhere.”
Board members said that the intensifying war for top talent further underscores the need for companies to have a proper succession planning mechanism in place.
Harsh Mariwala, chairman of Marico, said: “Boards should take interest in succession planning and the primary responsibility of finding a successor should be that of the CEO and the CHRO.”
“Good boards ensure there is a presentation done by the CEO on succession planning for the two top-level roles through a talent pipeline. Before a CEO retires, he should have a goal sheet of possible candidates to succeed him which the boards should evaluate as the right fit for the job,” Mariwala said.
That apart, greater involvement and closer scrutiny by multiple stakeholders – nomination and remuneration committees (NRC), boards and investors – is also lengthening the search process.
Shiv Shivakumar, operating partner at Advent International, said: “Companies are not clear about what they want. Sometimes they are looking for an ideal candidate and sometimes the promoter steps in or they get someone in the interim. Many times, terms don’t work out or location is a challenge.”