This is a follow-up to my post of yesterday. Contingencies happen. They are unexpected,  unpredictable and pretty annoying.

Emerging markets usually compound the problems surrounding the closure of assignments due to the absence of practical and applicable legal frameworks, transparent business cultures, and the by times sharp deviations from the universal understanding of the term "professionalism". By times the ethical basis for the system to work well might be missing, and one has to muddle through.

So, what to do about contingencies during closure ?

a. Time management is of prime importance. Some companies need weeks to bring interviewing executives together in one location, and some need weeks to setup logistics. When a candidate himself travels around the globe 2 weeks a month, the problem becomes almost intractable. I remember in one extreme case, involving a large NGO, "consensus" decision making amongst 6 project stakeholders - of which 4 interviewed by phone, took so much time almost half a year passed by before they could come to a decision (on top of it a negative one due to the veto of one single stakeholder). The candidate, a senior investment banker specialized in urban infrastructure, had by that time lost all interest.

In boom markets, in sectors with shortages of executives, like Real Estate in 2006-2007 across CEE, good always candidates have several options, as some are approached almost every month with new offers. Efficient and focused decision making is key to successful closure and will reduce contingencies that can derail a project.

Recently, the principal of a holding company in Azerbaijan stressed the urgency to find him a CEO for a GSM operator amongst his portfolio of companies. When we presented the shortlist, it took 5 weeks to get the first reply. The good man meant "important" rather than urgent, but it did not seem to bother him the least. To him the terms are synonymous. Though he paid a significant search fee, he further delayed the employment date of the candidate that signed the contract (who had obviously resigned already) with almost 8 weeks, without giving any reason. Everything worked out in the end, but after such experience, you never look at client and candidate management in the same way again.

b. Include stakeholders in the decision of a candidate, or at least verify their explicit consent. Especially for expatriate positions, ensure the wife or partner of a candidate fully agrees with the decision, and that no doubts linger around. By times even this is impossible. A colleague once had the case whereby a CEO candidate travelled with his wife from France to the Ukraine to sign his contract with a large local bank institution. After spending 2 days in Kiev his wife realized she did not want to remain in Paris alone with two children still in high school, while her husband would live a quasi bachelor life in vibrant and seemingly steamy, romantic Kiev. So she offered the husband a choice: either a return with her back to Paris, or a divorce. The client was sorely disappointed with his decision, as were we, having to restart the search.

c. Understand the countries and markets you work in, know what you can expect, and have a solid presence or partner where you work. In the US or Western Europe, you can expect few surprises, the cultural understanding of "professionalism" is homogeneous, business ethics are similar, and in the worst case, you can appeal to the law. Imagine the nature of contingencies when working on projects in emerging markets. Myself and colleagues have anecdotes that can fill a book. If you have the intention to search and place people in these regions, a conversation with local search professionals is a great investment of time. There is a reason why I receive a lot of referral business from search companies in Western Europe or the US who do not want to take the risk of a "naked entry" - no pun intended.

A sample of some experiences:

A search consultant working for a competing firm in the UK, and searching local executives for one of the big 4 in "boom times" Russia not so long ago, complained all his candidates were "spoiled". 1 out of 2 would not show up for client interviews, and not inform him, either the client. When he finally managed to place a candidate, he left 4 weeks later because he received a better offer from a competing firm. A client contracted a (success based) search firm in Moscow and found out that the candidate placed was approached by the same search firm again 5 months after placement, and that for a position at his direct competitor.

In Ukraine a client decided to cancel a search, quoting his need was filled internally, but hired anyway a shortlisted candidate 2 months after cancellation. He refused to pay the retainer, prompting us to inform the candidate how his employment really happened. In order to receive our fee, we had to exert indirect pressure by talking to the hired candidate. Going to court ? Good luck!

In Turkey an known industry-insider candidate I approached at the start of a search project decided to call my client (a direct competitor of her former employer) and tried to convince them to change the position into a new one, with a larger responsibility, and obviously a better compensation. The hiring manager called me from Paris, telling me he could consider her request due to her in-depth knowledge of the industry and seniority. Why did someone I knew short circuited the process ? A prompt reference check from my side, on the real reasons why this candidate was dismissed from her former employer provided enough material for the client to change his mind as promptly as the consideration to initially hire had emerged.

Contingencies do happen, experience only prepares to prevent or cope with them. Their successful management shows where the science of search ends, and where the art of the profession starts. 

After a client interviewed shortlisted executives and selected a candidate the difficult phase of candidate placement starts. Closing an assignment is not as easy as it seems. This is insider know-how of all search consultants who have effectively placed several people. To my initial surprise and astonishment, it is not selling the search, neither finding the candidate, but the closure of an assignment that is the most challenging process.

Once there is a preferred candidate, trust me, a myriad of things can still go wrong: Murphy's law finds much fertile ground here. If one does not pay careful attention, things can and will go astray very quickly.

The slipperiest slope is represented by, no surprise, issues related to compensation. However, a broad variety of other contingencies at both client and candidate side can slam the brake during this period, especially when decision making at the client goes at a snail pace.

I will cover such contingencies extensively in the next post.

Package negotiations are a tricky matter, especially when a consultant needs to proactively mediate between candidate and employer. Usually I do not play an active role in the negotiation but provide switch board service, ferrying offers and counter offers, while advising both parties. Candidates often ask me who I represent - in this phase I represent both, though the hiring organization will always call the last shot.

a. Most clients have a package set, and have few or no flexibility to change the amount. This makes both search process and candidate management easier. If expectations of shortlisted candidates fall within the parameters set there is no issue. The only problems ensue when a client wants (or pushes for) a profile that falls in a higher income bracket.

b. Some clients want to keep all options open. Usually they have a "ballpark" figure in mind, and indicate a degree of flexibility according to the seniority and experience of candidates. In order to avoid issues coming up related to salary, bonuses, equity options, transfer fees, benefits and other elements of compensation, it is necessary to report regular to the client during the search the expectations of candidates you believe are relevant to the project. Clients that have all options open could get entangled in a legal smorgasbord when lawyers come in to hammer out a universe of exotic clauses, when there is not yet a full consensus between candidate and employer. Have a candidate and employer agree on all compensation aspects as well their contractual formulation, before anyone brings in lawyers. Usually lawyers tend to cosy up comfortably to each other, and leave it to the candidate and the board of the hiring company to organize the final handshake. When the lawyers agree, both parties follow quickly.

c. There is a group of clients that needs extensive involvement of the consultant. It is the group of clients that does not have an idea what they should pay, and further need assistance in the formulation of the offer. We receive questions about what we believe would be a fair compensation. What do we think about the structure of the offer? If equity options are offered, how much should be given, on what basis, and how should they be vested?

d. One factor that can stir up problems, is when a client skews the contractual formulation of the offer into his advantage. In my experience (as with the above case) this happens often with smaller, less institutional, entrepreneurial firms in a period of high growth; companies that need outside seniority to consolidate, restructure and reengineer the business.

Once, when searching a European Sales Director for a software firm, the client made an offer and was surprised the candidate halted all negotiation, moreover, he completely pulled out of the process. He shared with us that the contract proposal was heavily biased in favor of the hiring company, and included various clauses that where not up to industry standards (verbally he was far more colorful). Our client, who did not share their contract template with us, was surprised why senior European executives would walk away from an offer they deemed excellent without even negotiating. (the candidate felt disrespected with the attitude reflected in the contract proposal). Though the compensation was reasonably good, contractual clauses related to notice period, expense account, the way bonuses were paid, and the lack of any corporate benefit made candidates (rightly) balk.

In an other case, I worked on an assignment for a large, family owned financial services company in Eastern Europe. Their contract included clauses forcing the payment of punitive damages if the successful candidate would terminate his employment unilaterally within 6 months after hire. Furthermore, the candidate was not allowed to take the contract proposal with him, he could only read it and take notes. The rationale behind the decision was that candidates might use the confidential offer to negotiate a higher salary with their existing employer. In this manner they communicated without realizing: (1) we are not fair and (2) we do not trust you. Twice HR (the wife of the owner) insisted on this process, until the owner intervened after two exceptional candidates indicated to have no interest joining them - having lost 6 months in the process, and myself significant time and effort in "selling" the position to these candidates.

Prepare youself for roadblocks early on, try to learn all relevant package and contract details, and always stay close to client and candidate after the initial selection of a candidate.