Federal Government's High-Level-Executive Recruitment, changing: Michael D. Zinn & Associates

The credit crisis, which has led to government funding of key businesses in critical industries has, in turn, fostered governmental oversight of compensation packages and bonus programs for high-level business management and revenue producing executives. “In essence, these developments have re-written the rules on how top revenue producers are compensated,” says Michael D. Zinn, president of the executive recruiting firm, Michael D. Zinn & Associates. “As a result, high-level talent may now be much more reluctant to move from one firm to another. There is a general concern that overly generous compensation agreements could be changed after the fact.”

Employment agreements are being written with more emphasis on upfront signing bonuses. “Contract language that will be harder to break is also needed,” adds Mr. Zinn. “Executives who are considering changing positions and taking on new responsibilities at a new organization will also want a commitment from the Board of Directors at the hiring organization. They will want assurances that the Board will stand by them, even if the government comes in at a later date and re-writes the compensation rules. These are hard commitments to make, let alone prove.”

A recent poll performed by Michael D. Zinn & Associates points out just how concerned business management and revenue producing executives are. When asked if the government should be allowed to re-write or rescind an employee contract because it appears to be exorbitant, twice as many executives who were responsible for business profit and loss or revenue production were opposed to the government getting involved as were executives in non-revenue producing areas such as human resources, finance and information systems.

“From a recruiting perspective,” says Mr. Zinn, “business management and revenue producers will be harder to move. They will want more than a chance to prove their worth at a new organization. They will also be reluctant to just accept assurances that their new contracts will be upheld – especially if the government steps in and tries to modify them, and the courts allow this to happen.”

Not only will executives be reluctant to embrace new opportunities, the mere act of finding the proper individual for a position will be much more difficult.

“Executives will be wary of approaches made by companies and recruiters, in general,” concludes Mr. Zinn. “The initial approaches made by those who cannot gain the prospective candidate’s confidence quickly, will fail. This will further separate those of us who have been totally ‘hands-on’ and more experienced from those who now spend little time up front, when initial inquiries are made.”