Who Says 'Yes' When the Headhunter Calls?
New research finds there may be a credibility problem when company leaders complain about a lack of loyalty.
By Peter Cappelli
The world of corporate careers has certainly changed over this past generation. Lifetime employment has given way to company hopping. There has been a lot of moaning about the decline of employee loyalty, especially among those not old enough to remember that it was the employers who broke the lifetime-employment deal with the downsizing wave that began in the early 1980s and never ended. In the mid-1990s, employers started telling employees that they'd better look after their own careers. The moaning about loyalty started soon after.
How about in the executive ranks? Employer hopping goes on there, as well, but more discretely, guided by search consultants. Evidence from a few years ago suggested the majority of vice president-level and above openings in the United States had retained search firms engaged in filling them.
So my colleague, Monika Hamori, and I started looking into the candidate database maintained by one of the largest executive-search firms. Among other things, the data provided the following information about potential candidates: Have we ever contacted them about being a candidate for a position elsewhere, and if so, did the individual agree to be a candidate for the job?
To back up for a minute, the individuals contacted typically aren't told what organization the job is for. They get a bare-bones description of the "opportunity" before being asked whether they are willing to throw their hat in the ring. If the answer is "yes," then they agree to submit their resume, to be interviewed for the position, to supply references; in short, to begin the process that could lead to an offer to leave their current job.
What would you think about executives who say "yes"? On the one hand, they are looking after their careers, which is what companies told employees they should be doing. On the other, these aren't just any employees. They are the leaders of the company, the ones establishing its direction and culture. They are also the ones complaining about the lack of employee loyalty and are exhorting employees to go the extra mile for the good of the organization.
What you think depends on which hand you're using. And that determines your guess as to what percentage of executives agreed to become a candidate for a job elsewhere. Is it a lot? "Sure," you might say, "they're just like anyone else looking for an opportunity for a better deal." Is it a little? "They're different," might be the response. "They embody the organization and are the captains of the ship."
What's your guess?
And how long can I stall before giving you the answer? It's 52 percent, a majority. I thought that was a lot. But a potential caveat: There are executives and then there are executives. There are lots more junior executives than truly senior, operating-committee types. Are the results driven by the junior folks?
No. This is the stunning thing. More senior executives are more likely to say "yes," by a lot. Almost two-thirds of executive vice presidents say "yes." Less than 30 percent of "managers" say "yes." Maybe there is a little credibility problem when company leaders complain about loyalty.
For HR people, one not-too-surprising finding is that executives in companies with good reputations as places to work are less likely to say "yes." Here's the big finding that also has great relevance for HR: The more moves someone has made in his or her career -- not just across companies, but across functions or industry segments -- the more likely he or she will be to say "yes" to the invitation to search for another job. These moves have that effect even when they take place inside the same company. International assignments are strongly associated with the willingness to search, perhaps reflecting the old wisdom that individuals in such roles feel cut off from the rest of the organization.
Exactly why more movement should lead to a decline in loyalty isn't completely clear. Maybe it creates more options -- so many more jobs where you might fit -- and therefore more interest in exploring them. Maybe it reflects weaker ties to other people, because such individuals haven't stayed in one role very long, and those social ties bind us to organizations.
This finding does raise an interesting issue for employee development. Moving executive talent around through rotational assignments has been seen as the best way to develop them for advancement, but what if that also makes them more likely to leave?
Peter Cappelli is the George W. Taylor Professor of Management and director of the Center for Human Resources at The Wharton School. His latest book is Why Good People Can't Get Jobs: The Skills Gap and What Companies Can Do About It.