Kevin Kelly is the Europe, Middle East and Asia Pacific region President of head hunting firm Heidrick & Struggles. He shares his views with Leslie D'Monte & Kalpana Pathak on senior-level recruitment.
Recruitment firms now want to be a part of the company's strategy to make the recruitment process more meaningful. What's your take on this trend?
We have to know the company's strategy to understand its culture. Unless we partner and collaborate with the company and know it inside out, we can't help it find the right candidate.
The attrition rate for senior level executives today stands at 40 per cent and by knowing a particular company and culture, we can help it decrease its attrition rate. When companies seek our assistance in finding a CEO, they are actually asking us how we can help them be successful for the next five years.
How do you maintain the delicate balance between knowing a company's strategy and not revealing it?
Absolutely. There is an element of danger. But we have our procedures in place. We work out things not only from the company's standpoint but also from our policy perspective. We cannot risk our reputation. We have been into this business for 54 years.
What attributes do you look out for in a CEO and what challenges do you face?
The recruitment procedure for a CEO is pretty much the same across the world. While selecting a CEO, we basically look for his track record, how good a manager or leader he can be and his ability to implement decisions - not from a dictatorial stand point. Companies today do not want dictators but individuals who can be patient. The challenge is to match the prospective CEO's skills with the company's culture.
Consider the trend of temping (recruitments for short tenures). Is this trend healthy? And since it's happening at senior levels, is their an ideal tenure for a CEO?
We are in a growth market and a lot of CEO movement is happening. The trend will continue for some more time in India. Between a CEO leaving and a new individual taking over, there is a huge disconnect that happens in companies.
In the next 18 months or two-three years, companies around the world will find it difficult to find a perfect CEO. So, yes there is a tenure depending on the market. Generally many people change jobs in two to three years. But I am fascinated by individuals who stay with a company for a long time.
Is there something called a fair compensation package for CEOs?
In every market the compensation package is different. Last year the average CEO cash compensation in the US averaged out at $ 1.1 million. The total compensation was $ 7.8 million of which a lion's share was by way of equity. In Europe, the average compensation of a CEO was $750,000 - 800,000.
Is recruitment of a CEO for a large enterprise different from recruitment of a CEO for a small or medium enterprise?
I believe it's a matter of getting exposure of running a bigger group of people and an enterprise. The basic principle is to reflect on what one has learnt over the years, even if the learning has taken place in a smaller organisation.
Would you agree that HR outsourcing is a trend that's catching on?
I believe that companies should outsource more HR services. There is huge disconnect in the business world today. The HR does not understand how a business is run. In fact, if one can outsource other activities like compensation benefits and payroll, et al, one can spend time in evaluating the staff and ensure that you have the right people in the right place.
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