Executive Labor Market Temporalities

Whether or not a fourth, fifth, or sixth wave arrives, I have no doubt that our living conditions are progressively normalizing — and with them, the demand for successful people (I still refuse to euphemistically call them "talents") is returning to its natural course. New job opportunities are also emerging as new business models arise, driven by technologies that are not necessarily new but are now affordable and applicable.

In recent months, the drive to attract these difference-makers has reactivated in our market. According to our perception, this may be happening somewhat discreetly, driven by two not-so-obvious factors.

First, it seems relatively clear to the business community that the current government will be able to do little to seriously disrupt the operations of most companies, given its 360° of proven incapacity — with the unfortunate exception of our efficient formal mining sector. Life goes on, and in that vein, the demand for successful executives need not disappear permanently. What we are witnessing today, after many months, is what we call a "floodgate" effect.

Second, with the lockdown under the Vizcarra administration, business activity entered a kind of hibernation and then underwent a metamorphosis. In recent years, a new economy has taken shape — with revised or entirely different business models — and has since consolidated, giving rise to its own new needs that must also be filled. If our perception of the origins of this incipient executive labor market reactivation is valid, one must ask whether it will be lasting and whether other factors might be at play.

A New Caution in Hiring

What we are beginning to see in our partially reactivated executive search practice differs notably from the pre-pandemic standard. There is a certain wariness — even fear — about hiring employees under indefinite contracts, as though an underlying doubt persists about whether another major disruption lies ahead, or whether the apparent normalcy we are recovering represents a stable medium-term trend.

Executive search processes are more art than science, which is why we doubt they will be replaced by AI, at least in the foreseeable future. These processes move through stages of research, exposure to the opportunity, and finally attraction — a quasi courtship between consultant, company, and executive, built on the possibility of establishing a solid, promising, mutually beneficial relationship. Everything looks promising until, as we are increasingly observing, a poorly structured, fear-driven offer letter loaded with employer protections arrives and undoes everything that had been built.

"Executive search processes are more art than science. A quasi courtship that can be undone by a poorly structured offer letter loaded with employer protections."

Defensive Conditions That Drive Away the Best Candidates

What we are finding are defensive conditions such as extended probationary periods, the unnecessary detailing of legally mandated limitations, and variable compensation or bonus structures whose fulfillment lies outside the executive's direct control — sometimes vaguely defined or nearly impossible to predict. These are just some of the conditions being "offered" to the chosen candidate at the start of what is intended to be a meaningful and viable relationship for both parties.

One condition we find particularly problematic is tying bonus eligibility to the corporation achieving its overall objectives. The mere fact that this condition is entirely outside the individual's direct control turns it from a goal into something closer to a gamble. We firmly believe that serious and sustainable employment relationships cannot be built on chance or speculation.

It may sound cohesive and corporately minded to expect everyone to be equally committed to aggregate results. But in practice, such a condition becomes an abstract intellectual construct — idealistic, without logic or evidence that it actually drives better individual or collective performance.

The Lesson from Advanced Markets

Looking at advanced labor markets for perspective: Louise Lawrence, an employment lawyer at Winckworth Sherwood LLP (Manchester, Oxford, and London), advises employers very simply to put themselves in the employee's shoes — to avoid sending signals of a corporate culture that does not truly prioritize people. If companies care about being named the best places to work and participate in global rankings measuring that distinction, they should certainly send those signals before the employment relationship even begins.

As in Britain and around the world, our lives in the months and perhaps years ahead will continue to be shaped by this unprecedented pandemic experience. But we can be more proactive and effective in managing this business environment — at least as proactive as we strive to be in our personal lives. The time has come to structure job offers in a way that is flexible, imaginative, empathetic, and — why not say it — fair.

Originally published in Diario Gestión, July 25, 2022. Armando Cavero is Managing Partner of Top Search Peru, InterSearch Worldwide representative in Peru.