Only the best recruiters need apply

Gross National Debt Statistics - we're now shareholders!

Poor Financial Services now has Henry Paulsen and his version of the RTC to blame - no thank - for the handou...uh, bailout. From his Treasury Department bio, "...[before] coming to Treasury, Paulson was Chairman and Chief Executive Officer of Goldman Sachs since the firm's initial public offering in 1999. He joined Goldman Sachs Chicago Office in 1974 and rose through the ranks holding several positions including, Managing Partner of the firm's Chicago office, Co-head of the firm's investment Banking Division, President and Chief Operating Officer, and Co-Senior partner."

With one of its own a key architect of the plan, Wall Street must be crying crocodile tears as looks to the future. Who's going to buy our debt?? Oh that's right, the taxpayers. You're welcome, you're welcome.

Since my tax dollars are going to be used, I have a few requirements of my own...

Cap the ratio of CEO base pay to a reasonable multiple of the average worker's salary in an organization. The days of 30-40 times multiples are over.
Let the CEO's performance compensation be based upon a suite of metrics agreed upon by a majority of employees AND shareholders - not just the corporate comp committee. These metrics must include the creation of new in-country jobs as a percentage of new jobs, an IRR for talent development.
Since a significant lack of talent was responsible for the decision making that put us in the position of bailing out an entire industry, the head of recruiting will now report to, at the very least, to the head of HR who will now report directly into the CEO. No more strategic business partner talk - it's time for action. If HR can't handle recruiting, we should report directly to the CEO. We are that important.
Every hiring manager now has a 24-hour talent response clause as a mandatory MBO.
All potential employees with any direct or indirect fiduciary responsibility will be formally assessed for risk-taking, honesty, and judgment. There are enough excellent assessment instruments that work and are far superior to a person's ability to assess these performance factors.

As a friend - who is one of the key recruiting leaders on Wall Street - told me, we don't need to re-invent or create a new recruiting wheel, we just have to polish the spokes. This means standing tall for assessing fit and bringing in new DNA that makes the body stronger rather than giving it lip service - you know what so many CEOs say, People are our most important asset (sounds like in the case of the credit crisis, people ended up being more impotent than important. This means taking relationship recruiting seriously and downplaying order taking.

Anything else come to mind for what truly is - finally - a new economy?

Comment by Joshua Letourneau on September 20, 2008 at 9:56am: Great post - unfortunately, I'm just now drinking coffee and have little value to add (which may be just as true after 5 cups as it is after 0) :P

Here are some thoughts on your recommendations:

1. Cap the ratio of CEO base pay to a reasonable multiple of the average worker's salary in an organization. The days of 30-40 times multiples are over.
Comment: Jeez, if the CEO was making purely a 30 - 40 multiple over the top 10%'s mean salary, we'd be rocking and rolling (meaning if the top 10% average is $200k, then a 40 multiple would put the CEO salary at $8 million). Unfortunately, most CEO comp is tough to directly lay out since so much is paid out in stock . . . yeah, another area that is gamed profusely!
Idea: How about there be utter and completely transparency as to "golden parachutes"? I want to know if there will be another Bob Nardelli debacle if the CEO is unsuccessful in creating shareholder value.

2. Let the CEO's performance compensation be based upon a suite of metrics agreed upon by a majority of employees AND shareholders - not just the corporate comp committee. These metrics must include the creation of new in-country jobs as a percentage of new jobs, an IRR for talent development.
Comment: Great idea . . . however, how could we get shareholders on the same page? How could we be a part of delineating a comp package? I love the idea, but the logistics worry me (perhaps an online 'vote' for anyone with a certain amount of shares . . . however imagine how even that would be gamed!) Also, what I see often are shareholders that talk a good game (i.e. "Keep all our jobs here in the U.S.") . . . but then when that happens and their coinciding return wasn't quite as high as it would have been if the company outsourced, guess what happens? That's right - people dump the stock and loan their capital in other areas (or companies, funds, etc.) that will "generate a higher return." I'm sure we've all seen this kind of behavior before.

[Note: An IRR for talent? I'm with you that we need to leverage portfolio theory when it comes to talent investments . . . but now we're getting into financial-speak, and one of the big reasons HR doesn't honestly have a seat at the exec roundtable is because they can't speak the financial language. Perhaps we'll see that shift - I just wrote a post for FOT (not posted yet) about looking into EBITDA (per SBU, per product/service line, per customer segment, etc.) as a metric that can be useful in terms of identifying where to invest TA/Sourcing dollars . . . ]

P.S. I have to run, but great post. I like these discussions because they drive progress - although I often see conversations shifting more toward the tactical, I truly believe that the tactics aren't our issue; it's business acumen and strategic thinking. Tech vendors are introducing new tactical tools each day, but these tools exist solely to meet market demand; demand fueled by orgs and recruiters/sourcers looking for "magic bullets" instead of doing deep-dives into strategy and a better understanding of why TA's thought processes of today more mirror paradigms of not only an industrializing economy, but a pre-industrializing economy!

P.S.S. If there are any VP's or Leaders of Talent Acquisition out there, please start going to conferences and/or start demanding strategic conversations about these things! Our industry is dominated by the 'tactics' (or tactical conversations, like how to get more names) . . . but it's like we're building a house on a terribly weak foundation.

Comment by Steve Levy on September 20, 2008 at 10:19am: Josh, thx for the input - never said this was going to be as easy as it was for Wall Street to snow the masses...