When Headhunters Call, Who Raises Their Hand?

Corporate executives – from senior managers to the top boss – are expected to inspire loyalty among the rank and file. Yet when a recruiter calls with a new job opportunity, those same executives are apt to toss their hat in the ring.

Fifty-two percent of executives were willing to consider a new job when contacted by a leading executive search firm, according to a new paper from Monika Hamori of IE Business School in Madrid and Peter Cappelli of University of Pennsylvania’s Wharton School. The management professors analyzed raw data – responses from top managers at financial-services companies in the New York area in 2002 – provided by the search firm.

“It’s a little troubling that more than 50% are willing to search,” said Cappelli, who also runs Wharton’s Center for Human Resources. Managers and executives may publicly wring their hands over a lack of allegiance among workers, but in fact, people at the lower ranks tend to be more loyal than those at the top, he said.

And job searches at the executive level are complex, as the authors point out. They require not simply forwarding a resume but “time and energy to prepare for an interview and meet with the consultant, think through and brief appropriate references, etc.,” they write in the paper, to be published in a forthcoming issue of the journal Organization Science.

Such costs should weed out candidates who aren’t serious about a potential move, making the number of potential defectors especially striking, Cappelli said.

General economic conditions also affect job mobility, with workers becoming risk-averse during recessions or weak periods and more inclined to consider new opportunities during better times. Although the data in the study is over a decade old, Cappelli said the economy today is in a similar place in the business cycle as it was in 2002, when the U.S. was recovering from the dot-com bust and subsequent recession.

Among high-ranking executives, senior managers and executive vice presidents were more willing than CFOs, presidents, chairmen and CEOs to submit their candidacies for a search.

Certain factors help predict whether an executive would consider jumping to a new employer, the researchers found, offering some guidance to firms that want to keep their high performers.

For example, executives with broad work experience – such as stints in different industries or international posts at their current company – are more prone to entertain new job opportunities.

“International assignments tend to cause people to be footloose afterwards, and rotational assignments look like they’re associated with people being more willing to leave,” said Cappelli.

That might make firms think twice as they develop people by moving them around. First, by exposing executives to more geographic or business functions, it increases the breadth of opportunities that recruiters will contact them for. Second, managers who have moved around a lot have fewer social bonds keeping them tied to their firms.

What’s more, uncertainty – created by mergers, the departure of a CEO or a major shift in corporate strategy – also increases the chances an executive will return a recruiter’s call.

While some executives might participate in a search with no intention of departing – but only to attract an offer and use it to negotiate a better deal at their current employer – Cappelli suggested that tactic could backfire.

“That’s really risky in the executive ranks, where reputation is much more important than short-term gains,” he said.



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