The drought in Alberta’s labour market is helping spark an already competitive headhunting industry — and executive search specialists say they’re having to look farther afield to fill top jobs with the right people.
While the IT sector has cooled in recent months, and corporate restructuring, oilpatch mergers and acquisitions have cut into the number of seats around executive boardroom tables, the quest for skilled managers in both Edmonton and Calgary is still intense at the uppermost senior levels, industry experts say.
“There is still very much a war for talent going on, and if you need a crackerjack CFO today, it’s a very competitive business for that person,” says Brent Shervey, managing director for Korn/Ferry International’s Calgary office.
“Other companies are also looking for those skills, and some of the candidates aren’t as willing to pull up and leave now as they were before, because of uncertainty,” he says.
It can also be tough business bidding to fill those positions, and in some cities there just aren’t enough high-paying clients looking for new blood.
Russell Reynolds Associates, one of the world’s leading executive search firms, recently pulled its branch office out of Calgary.
Laird Willson, a Calgary executive search specialist who worked for Russell Reynolds, said the New York-based headhunters have a business model based on a high retainer fee.
“Simply put, they don’t feel they have the market for that kind of search activity here, not in Calgary and not in a lot of other smaller centres in the world,” he said.
“They’re not abandoning anything, really, we’ll have an ongoing relationship with them . . . The firm has been extremely supportive and helpful with us.”
Willson, along with partners Drew Railton and Irene Pfeiffer, former managing director in Canada for Russell Reynolds, have now formed PWR Search in Calgary. Unlike Russell Reynolds, PWR Search won’t focus its searches solely at the CEO, director and board levels, says Willson.
“Executive search worldwide has fallen off considerably for all the major executive search firms as a result of the economy,” notes Willson. “We won’t be trying to work at that very senior level. We know what the market is here, and they, in a sense, didn’t.”
There are only so many searches to go around at the very senior executive level, agrees Korn/Ferry’s Shervey.
“With the mergers and acquisitions going on in the oil and gas industry, the number of clients able to and prepared to engage executive search firms is going down,” he says. “They only need one CFO, and one VP of Finance and one CEO.”
In Edmonton, Gerry Davies of executive recruitment firm Davies Park, says trends other than simply a shortage of people are driving the competition among headhunting firms in Alberta.
“Employers are becoming much more sophisticated in selecting search firms to work for them,” he observes. “They’re asking tougher questions, and we have to be able to offer very positive references to get work.
“The requirements employers are placing on job vacancies these days are also different than the skill sets that some of the people have,” and the bar is being set higher, he adds. The time it takes to narrow its search to a short list has also expanded from 60 to 90 days in the last couple of years because of the tight labour market.
Davies says his firm is having to look farther afield, in some cases internationally, to fill client demands. “We recruit engineers for the oilfields and oil companies, we recruit executives for them, doctors, accountants, lawyers . . . right across every spectrum. We have to cast a much broader net than we ever used to,” he says.
There are also fears within Edmonton’s strong public service sector that the new provincial government in British Columbia is going to do a little headhunting of its own by luring away senior bureaucrats and public servants with higher wages, Davies says. “And that’s going to drive salaries up in Alberta as well, if we want to keep those people.”
Also in Edmonton, U.K.-based manpower firm ABC Corries recently unveiled its new Canadian headquarters, promising to attract and recruit skilled workers to this province to fill some of the gaps in the labour pool.
Premier Ralph Klein has estimated at least 30,000 additional workers are needed to keep the provincial economy running hot, and ABC Corries says it expects an infusion of 2,000 qualified workers by next month.
But while Alberta desperately needs more skilled workers in the various trades, filling leadership jobs is the main priority for most major executive search firms.
There are other challenges facing the recruitment industry, including the months-long slowdown in the IT sector, and the greying Baby Boom generation.
Kieran Longworth, vice-president of strategic development with David Aplin and Associates, which has offices in Edmonton, Calgary, Vancouver and Winnipeg, says some top clients are pulling back from the employee hunt until times get better.
“In the first three months of this year, our IT sales recruiter had no less than half a dozen job freezes — small or big IT vendors that got well into a search, up to the third or fourth interview, and had made offers or were ready to,” he says. “But mostly because of the pressure out of the U.S., they just froze. They didn’t make the hires. That’s been a pretty regular occurrence this year.”
David Aplin and Associates is also a high-tech placement specialist, counting Sun Microsystems, Microsoft and Hewlett-Packard among its clients. It operates on a contingency fee basis, which means it only gets paid if it finds a potential hire.
It’s hard work, but it can be lucrative — Longworth says the company charges in the 20- 25-per-cent range, which means placing a chief technology officer in a $120,000 a year position allows the headhunting agency to pocket $25,000-$30,000.
“When you’ve already done all the work, qualify them, interview them, present them and co-ordinate the process, and then it freezes on you at the offer stage . . . you don’t get paid,” Longworth says. “And that’s not a good return on your investment for the time, so we have to be pretty good in qualifying our clients, making sure they are committed to making a hiring decision.”
Meanwhile, the impact of retiring boomers is also becoming a major concern, says Gary Agnew, a partner with Canadian Career Partners in Calgary. Agnew says the economic slowdown in the early 1980s meant many graduates didn’t enter their chosen careers right away, creating an empty “bubble” of available expertise.
“We have a huge gap going through the marketplace,” says Agnew. “Trying to get somebody now with 10 years experience – they don’t exist. Those people graduated, and instead of going into geology and geophysics, they went off to do something else.
“We’re not getting the depth. We have a new generation coming through, but there aren’t the loyalties there used to be. There is not enough focus on development of talent within organizations, and preparing organizations to take on new challenges.”
Ed Davies, vice-president of marketing for search firm Drake Beam Morin in Edmonton, agrees. “We’re talking to companies daily who are saying in three to five years they’re going to be in big trouble, because they’re losing a huge level of expertise with their folks who are ready to retire, and there isn’t somebody in place to take their spot.”
Other company leaders are making plans for early retirement, leaving no clear successors. An example: “I’ve got a situation right now where a VP has been deemed to be the new president,” explains Agnew. “He’s come to me and told me he’s retiring, he doesn’t want that job, and he can’t tell his employer. But he needs that magic number, and that’s two years away. Does he tell them he doesn’t want the job, or does he walk away in two years and take his pension?
“If he tells them right now, he’s dead wood within the organization.” Despite Alberta’s labour-hungry job market, some career-transition companies still have problems finding jobs for executives who have been downsized or made redundant by a company merger or acquisition.
Laurie Maslak, a senior consultant at Garth Toombs & Associates Inc. in Calgary, advises her clients that if they want to re-enter the workforce at the same level they departed, they may have to accept the idea of uprooting and moving to a different city.
“It’s tough,” she admits. “Typically with our very senior people at a president or vice-president level, they can’t just look at Calgary . . . they’re up against stiff competition.
“Organizations are growing flatter, so those people have a harder time finding equivalent positions in other organizations.”
Anybody working in the IT industry “had better be prepared to be a gypsy, because it is going to be that type of a lifestyle,” agrees Ed Davies in Edmonton, adding many people he knows in the information technology sector are choosing self-employment and contract work, so they can have a modicum of control over their lives.
But Davies says Edmonton’s job market is still finding new careers for most displaced senior executives, with job turnarounds “probably taking two months maximum for somebody to find something equivalent or better.”
“In Alberta, there isn’t a sector I wouldn’t recommend,” he says confidently. “It depends on what’s driving you. I don’t recommend somebody coming into a sector because they think there’s a good career in it. I recommend somebody come into a sector because it’s where they want to be.”
“If they’re doing something they love, the financial return will come. If you’re going in after the money, you’re going to be like many of people we meet — very successful and exceptionally unhappy. We see hundreds of them.”
Although Alberta’s recruitment specialists are facing a number of challenges, placement specialists like Kieran Longworth see a continuing demand for their services as the province’s economy continues to boom.
“We’re not in the HR business, we’re in the recruitment business, and that’s a small piece of HR that HR professionals really don’t do very well. And that’s why there’s market space for us,” he says.
“If we just gravitate towards specialized searches with really good companies, that keeps us plenty busy. In fact, we’ve seen searches go up, fees go up, and the demographics are really favourable for our industry.”
