Wanted by a $50 million manufacturer:
- An executive who can wear 10 hats
- Comfortable having IT, HR, operations, and finance report to him or her
- Can help increase sales by 20 percent
- Able to work with the owner to create a plan that will double the company’s revenue over a seven year period
- Must have industry depth and a reputation as an aggressive growth leader.
While you will likely never see a position description written this literally, these qualifications are, in fact, what many businesses are seeking in 2013. Companies that had lean operations during the recession, including a conservative approach to hiring executives, are now realizing they need higher-level talent that can propel their business growth and take the business to the next level.
Making things difficult is the fact that recruitment for top talent in today’s market takes longer and requires many more interview steps and due diligence than it did five years ago. Plus, the market is more competitive, forcing companies to get creative at the negotiation table to secure an acceptance from their chosen executive.
Today’s candidates are weary from a protracted period of operating in survival mode and just maintaining the status quo. They are looking for opportunities to join invigorated management teams where they can once again offer strategic ideas that will impact future growth. They want to be a partner with the management team and the CEO/owner in achieving great things for the organization.
Once these executives locate such an opportunity, they may be willing to sacrifice some base salary for a negotiated upside in the company. While they of course expect a competitive salary in line with their experience level and the company’s size and industry, we are seeing more executives who are willing to take some risk on salary in return for other forms of compensation that will reward their performance. As a result, compensation is trending more toward a total package that includes short-term bonuses and long-term incentive plans.
For example, let’s say you are a $30 million company hiring an executive who you expect to play a key role in growing your company to $50 million. After negotiating a competitive base salary, you should design an incentive plan that will motivate the executive to assist with top and bottom line growth. You should also contemplate creating management team incentive pools to be paid when the company exceeds performance goals. In addition, business owners thinking about a sale may want to consider creating a bonus pool that will reward a select few top performers at the time of the eventual sale.
If your company can create win-win scenarios with its executive team, reward entrepreneurial behavior, and create an environment in which everyone is on the same page, you will be on a strong course toward achieving your anticipated growth goals.
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