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Staffing, Recruiting & Executive Search

Baker Tilly Executive Search

Accounting & Finance Staffing

Accounting & Finance Recruiting

Interim CFO Services

Project-Based Financial Consulting

Partner, CPA

Typically, employers in a tight labor market can be expected to lean on the key weapon of salary and benefits in the war for talent. Makes sense: the Bureau of Labor Statistics (BLS) is reporting an unemployment rate of just 2.5­­­­­ percent for professional and managerial workers. Competition for the right candidates is fierce – and accelerating. However, a recent Baker Tilly Search & Staffing poll suggests candidates may be looking for different things from employers right now. The tight labor market may not have resulted in upward salary pressure. In June, Baker Tilly Search & Staffing asked our online visitors if they had changed jobs in the past 12 months – and what that meant in terms of their compensation. The results show compensation was not the primary decision-maker for the increasing number of employees prepared to move on from their current employers. Over 64 percent of our survey respondents changed employers last year for no change - or even a decrease - in pay. That suggests job searchers are more than willing to accept less pay if the employer offers a value proposition that supports their career goals and a workplace culture that fits their personality and work style. Of respondents who changed jobs in the preceding 12 months, only one-third received an increase in pay, with 14 percent of those individuals opting for an increase less than 10 percent. What are some of the potential drivers in changing jobs? Career progression, opportunities for growth and top-notch learning and development are all known considerations. While employers do place a lot of emphasis on salary when recruiting, workers often actually want to feel like they are continually growing their arsenal of professional skills. Businesses are responding by increasing the time and effort into the training essential for professional development. For more information on this topic, or to learn how Baker Tilly specialists can help, contact our team.

Baker Tilly Search & Staffing

More money? Even in a tight labor market, it’s not all about the pay

Options are plenty when it comes to executive search firms. On one end of the spectrum are the commandingly large firms, which come with big brand name recognition, high overhead and revenues in excess of $700 million annually. Several of these publicly traded firms have great reputations, but they have historically catered to Fortune 500 companies. If your organization is not a Fortune 500 company, your search can easily get lost in the shuffle or pushed down below the partner level, and costs can quickly exceed your price range. Worse yet, sometimes these firms will try to recruit from your organization after their one or two year hands-off commitment has expired. On the other end of the spectrum, however, are another option: boutique search firms. You may be skeptical of these smaller firms, fearing that they lack the resources and experience to find the right executive for your organization. But these fears are often unfounded — in fact, boutique firms offer several advantages that may make them a better fit for your search. 1. Individual and trust-based business When engaging with a boutique firm, you are more likely to deal directly with the person or team leading your project. By contrast, when engaging with a large firm, you may only engage with a partner occasionally. Often, larger firms delegate key work to less tenured associates who you have never met and who have only second-hand knowledge of your organization and its needs. This can result in candidates whose resumes match your specification on paper but may not fit your culture or your goals, which leads to mis-hires. 2. Greater candidate pool Executive search firms have an ethical and contractual obligation not to recruit from clients. Because large firms conduct business with so many organizations, they have significant hands-off limitations which impact their recruiting strategies. Candidates that are active on a search within a firm are also off-limits for other searches. With large firms, this can equate to thousands of candidates who are unavailable to your search, severely limiting the talent pool. Remember that while the large firms’ lengthy lists of clients may be impressive, these lists also show the companies you cannot recruit from. 3. Deep knowledge of your organization You want a search team who understands your culture, major players and unique needs. The boutique business model gives search teams more time to learn these aspects of your organization and use them to inform their search. Additionally, since the lead partner usually handles the engagement directly, they are better positioned to present your opportunity, vet candidates and provide value-added insight on your industry, the market, the function and the role. 4. Personalized attention One of the most important questions to ask while interviewing search firms is, “How many searches are you currently conducting?”— and make sure that they include searches that are near completion (compensation mediation can be time-consuming for a search consultant). Typically, boutique firms work on fewer projects, and their “top-to-bottom” approach offers the client extraordinary attention to detail. Large firms, meanwhile, are usually in a constant state of growth, which limits the attention they can pay to your search. A sizable client base may be great for them, but it might not be best for you. 5. Transparent search process Many partners at large firms cannot describe their process in detail and often don’t adhere to an established methodology. This is because it is difficult to consistently execute a data-driven methodology within a large firm. Boutique firms are generally more transparent about and invested in their process. You should expect to have access to performance metric reporting that allows you to drill down to the name, title, employer and feedback from all potential candidates that are contacted for your search. This detailed reporting allows you to better communicate and collaborate with the search firm. 6. Focus on your engagement, not upselling Cross-selling ancillary services is a huge priority for many large firms, so much so that partners at these firms are as concerned with cross-sales as with the search itself, and their attention is diverted from what you contracted them for in the first place. Conversely, boutique search firms are, by and large, strictly focused on retained executive search. Rather than diversifying into other services such as candidate assessment, boutique firms will often refer their clients to specialists, ensuring they remain focused on the task at hand. 7. Completion rates According to Robert Stein, in his book Pipeline Talent: An Evolution in Executive Search, search completion rates at boutique firms can be as high as 99 percent, while many large firms are closer to 65 percent. When meeting with a search firm, ask what their completion rate is. You are likely to see that larger firms — which, by virtue of their size, can afford to leave a search unfulfilled — don’t have as strong a record of bringing candidates across the finish line as their boutique counterparts. The constraints on large executive search firms are real; they limit the firms’ ability to bring great candidates to you and contribute value to your organization. When selecting a firm for your search, critically assess the quality of service you will receive, instead of simply picking the largest firm on the market. Remember, bigger isn’t better; better is better. For more information on this topic, or to learn how Baker Tilly staffing specialists can help, contact our team.

Think smaller: the benefits of a boutique executive search firm

Considering millennials have surpassed baby boomers as the largest generation in the American workforce, retention remains a hot topic. Read the article.

Employer Services

Public Sector Executive Recruitment

Beyond recruiting: How to retain millennials

Have you evaluated your human resources leader’s skills and competencies lately? Have you benchmarked your human capital talent to that of growth companies? The time might be right to take a closer look. The role of the chief human resource officer (CHRO) has changed dramatically over the years. While at one time the human resources function was a mid-level staff position focused on personnel and immersed in administrative and transactional responsibilities, today’s CHRO should be a counselor, coach and trusted advisor to the CEO who has a seat at the executive table and whose opinion and experience are highly valued. Read the article.

Today’s CHRO – the newest data-driven C-suite executive

The job market is in full swing and the war for talent is knocking on your company’s door. In this environment, make no mistake — your employees are getting recruiting calls. Depending on their skill set, expertise, and level, they could even be receiving recruiting inquiries on a daily basis. And then it happens; a key employee gives notice. Read the article.

Six questions to ask before making a counteroffer to an employee (or accepting one)

Trump is driving a resurgence in business-sector optimism that could lead to significant changes in the economy. His election, along with an economy that has been steadily improving over the past years, has given employers more confidence than ever to actively pursue plans for growth. This translates into plans to hire. Read the article.

Five tips for bringing in top talent in a tight labor market

Client need Como Friends, a St. Paul, Minneapolis-area not-for-profit whose mission is to inspire community generosity in support of the Como Park Zoo & Conservatory, experienced unexpected turnover in their Director of Individual Giving position. Because the turnover occurred just before the fourth quarter, their prime fundraising season, the vacancy needed to be filled quickly to meet the organization’s financial goals. Additionally, the organization saw an opportunity to hire a candidate with significant individual giving experience. To assess the latest fundraising techniques in the marketplace and assure proper culture fit, Como Friends established a search committee and requested to meet with at least 10 qualified and vetted candidates. Baker Tilly Executive Search solution After identifying and presenting 10 well-qualified candidates, our executive search consultants collaborated closely with the organization’s search committee to refine their position requirements, ultimately narrowing the candidate pool. We then conducted two-hour, one-on-one interviews with a subset of the candidates and presented finalists to Como Friends. After significant deliberation, the not-for-profit’s search committee made an offer to a well-connected candidate with 17 years of not-for-profit development experience, including capital campaign, private, corporate, and family foundation donations. To ensure a smooth transition and strong culture fit for both Como Friends and their new employee, Baker Tilly Executive Search conducted regular onboarding check-ins in the 12 months following the hiring decision. Results The successful candidate made a smooth transition from her previous role and was able to bring a fresh perspective to the Director of Individual Giving position. After one year on the job, the President of Como Friends reported that the candidate is exceeding expectations and has brought a new demographic of donors to the table. Not only have year-over-year donations increased, but due to the successful candidate’s strong relationship building skills, Como Friends’ retention of major donors has increased from 70 to 92 percent. “We engaged Baker Tilly Executive Search after unexpectedly losing our Director of Individual Giving. There was no way our management team could source the high caliber talent we needed for this critical position and simultaneously carry out the role’s ongoing responsibilities. The Baker Tilly Executive Search team built a strong rapport with our search committee and provided the professional guidance we needed from start to finish. By collaborating with Baker Tilly Executive Search, we greatly increased our access to quality candidates and were able to conduct an efficient and effective search. We are thrilled with the candidate we hired and would highly recommend Baker Tilly Executive Search to other organizations.”– Jackie Sticha, President of Como Friends For more information on this topic, or to learn how Baker Tilly Executive Search specialists can help, contact our team.

Not-for-Profit

Como Friends urgently needs director of individual giving to meet fundraising goals

Tax savings Paying your child for services performed in your family business can reduce your overall family tax bill, while shifting assets to your child without gift tax implications. As a business owner, you can take a deduction for the wages paid to your child, while your child can utilize his or her standard deduction (up to $6,300 in 2016) to offset those wages making them income tax-free (and possibly payroll tax-free). Additionally, the deduction might lower your adjusted gross income, which might favorably impact other deductions and credits that get phased out due to high adjusted gross income. For example, a business owner in the 35 percent tax bracket hires their 14-year-old son to work in the office on weekends to help with filing, shredding, cleaning, etc. The child earns $6,300 in wages throughout the year and has no other earnings/income. Ideally, the child should receive a Form W-2 for the work performed. Since the full amount of the wages will be deductible as compensation paid by the business, the tax savings to the business owner is $2,205 ($6,300 x 35 percent), and  the income tax to the child is $0, since all of these wages are offset by the child’s standard deduction. In addition, if the business income is subject to self-employment tax, there would be additional tax savings by way of reduced self-employment income. Even if the wages exceed the standard deduction, the child is allowed to make an IRA contribution up to $5,500 in 2016 which, as an “above the line” deduction, could substantially reduce the child's taxable income. If the maximum traditional IRA contribution is made, the first $11,800 of the child's taxable wages will result no income tax liability ($6,300 standard deduction + $5,500 IRA deduction). And again assuming the parents’ 35 percent income tax bracket, the child's wages would produce an income tax savings of $4,130 to them. If wages are paid to the child in excess of the $6,300 standard deduction, and a Roth IRA contribution is desired as opposed to a traditional IRA, any income in excess of the standard deduction will be taxed at the child’s tax rate. The lowest tax bracket of 10 percent applies to taxable income up to $9,275 for 2016. Assuming a traditional IRA contribution is not made, the child could earn up to $15,575 ($15,575 - $6,300 standard deduction = $9,275 10 percent bracket limit) before being pushed into the next tax bracket, assuming he or she earns no other income. Please talk to your financial advisor before deciding on whether a traditional IRA or Roth IRA is right for you. In addition to the income tax savings, you may be able to save on payroll taxes if your business is unincorporated. If you operate as a sole proprietor or a husband-wife partnership without other partners, services provided by your child under the age of 18 would not be considered employment for FICA purposes; therefore, you would not be required to pay FICA and FUTA taxes on the child’s wages. Additionally, FUTA is not imposed in this situation if your child is under age 21. If your business is a corporation (or a partnership that contains non-parent partners), FICA and FUTA taxes are still required to be paid on your child’s wages (note, the reduction in income tax is still achieved). However, there is no extra cost to the business owner, as these taxes would be required to be paid if you would have hired someone for similar work anyway. As a future planning concern in arranging for contributions made to an IRA established for a minor, it is important to keep in mind that once the child reaches the age of majority, he or she will be free to take funds from the IRA as he or she pleases, and can even close the IRA out. With a distribution from a traditional IRA, there will be taxable income to deal with and, most likely a 10 percent additional tax on the amount of the distribution on account of a premature distribution from the IRA. And, if the conditions applicable to a Roth IRA, including the holding requirements, are not met, penalties, in addition to tax on the investment earnings could apply, as well as that 10 percent additional tax on the amount of the distribution. Therefore, in establishing an IRA for a minor, it’s often best going into this strategy with the intention that the child is to maintain his or her IRA intact for a long, long time or that the IRA is to be used for a specific funding purpose. One example of a specific funding purpose involves taking distributions from a traditional or Roth IRA for “adjusted qualified higher education expenses” (AQEE). In such a case, regular income taxes will be due on distributions from a traditional IRA but usually not from a Roth IRA. As to the application of the 10 percent additional premature distribution tax on account of AQEE, if the taxable part of the distribution is less than or equal to the AQEE, none of the distribution from the traditional or Roth IRA would be subject to the additional 10 percent tax; if the taxable part of the distribution is more than the AQEE, only the excess would be subject to the additional 10 percent tax. For purposes of this rule, AQEE include tuition, fees, books, supplies, and equipment required for enrollment or attendance at an eligible educational institution. Also included are expenses for special needs services incurred by or for special needs students in connection with their enrollment or attendance. In addition, if the student is at least a half-time student, room and board would also be considered as AQEE. In summary, there are good reasons to consider sheltering a portion of the child’s income in a traditional IRA or making after-tax contributions to a Roth IRA during the child’s minority period when presumably the exemption and the child’s income tax bracket are most favorable. In doing so, the parents/business owners will also want to consider the future strategy of the IRA as a basis for deciding whether to go with a traditional or Roth IRA, and that strategy should be communicated to the child. As a starting point, the strategy should involve steering clear of the application of the 10 percent additional income tax and maximizing any additional tax preference which would apply to a future distribution from the IRA. Doing it the right way When hiring your children, you need to be careful to treat them similarly to any other employee. This might include items such as: Keeping detailed employment records, including timely tracking of weekly hours and wages that correspond to services provided Issuing paychecks as you would a normal employee (e.g., bi-weekly) Documenting that the services are legitimate and considered ordinary and necessary for the business Ensuring the services provided do not include typical household chores If your child is not treated like any other employee in a similar position, the IRS could potentially deem their wages as not ordinary and necessary, and disallow them as a deductible expense. In Patricia D. Ross v. Commissioner, TC Summary Opinion 2014-68, the IRS did exactly that. Mrs. Ross operated several businesses, and hired her three children to perform services. The work performed by the children was mostly legitimate work and timesheets were prepared. Mrs. Ross filed the appropriate employment tax returns and the children’s income tax returns where required. While the above items were a good start, Mrs. Ross did not generally pay her children on a regular basis, but rather she often made payments to third parties for expenditures that her children “directed her to make” (most of which were meals at restaurants). Also, amounts "paid" to the children had no correlation to the amount of hours actually worked and there was no consistent wage rate (hourly rates ranged from $4-$30 per hour depending on the child and year). Based on all the facts and circumstances, the IRS determined that the arrangement between Mrs. Ross and her children was too dissimilar between that of a normal employer/employee relationship, and that all of the wages claimed as an expense were disallowed. In no way should this case discourage a business owner from hiring their children and deducting the child's wages as an ordinary and necessary business expense. Rather, it should serve as a reminder on how to do it correctly. From an overall family tax standpoint, hiring your children is an effective tool in reducing taxes, but business owners should be mindful to treat them as they would other employees. For more information on this topic, or to learn how Baker Tilly tax specialists can help, contact our team. The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely.  The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.

Family Business

Hiring your children - tax savings and doing it the right way

Hiring leaders is expensive and risky. When an executive new hire fails, related expenses can multiply and cause collateral damage. Hiring an executive search firm may be the answer. Read the article.

Seven times when it may make sense to use an executive search firm

Our client’s need A provider of precision metal stampings and fabrication for the medical, aerospace, defense, and automotive industries was looking to increase their manufacturing capacity through upgrading the operational leadership in the plant. The client needed unique operations talent to deliver increased throughput and on time delivery while increasing overall production efficiency. This would increase plant capacity to make room for the growth in orders the organization was forecasting. The Baker Tilly Executive Search solution Our executive search consultants collaborated with the company’s key leaders to understand the nuances of their manufacturing environment. Through this process, we identified constraints and opportunities not only in their processes and workflow, but also with shop floor personnel to identify required attributes and experience required for a successful leader. By understanding the company’s operations and culture, we were able to market our client and their position to find high caliber candidates with experience and success in driving the improvements desired by the client. Results Our search yielded five strong candidates for the company to consider. Ultimately, the client decided to hire two of the five candidates, one as the general manager and the other as the plant manager. Within 90 days of these hires, the client reported measureable and sustainable improvements in order turnaround time, changeover times, first pass quality, and order fulfillment rates. In addition to these operations roles, our search consultants previously helped the firm source a supply chain executive. For more information on this topic, or to learn how Baker Tilly Executive Search specialists can help, contact our team.

New operations talent delivers measurable results for metal stampings and fabrication firm

A strong corporate culture is critical in today’s business environment, but many CEOs find culture creation to be a daunting task. Read the article.

How to leverage a strong company culture for more success

We recently interviewed a number of HR executives to understand the state of talent acquisition and talent management today. These discussions led to striking observations: Firms that haven’t invested in recruiting, employer branding, leadership development, and their people since 2008 (the beginning of the recession) are in for a rude awakening. The War for Talent is back on and it will disrupt employers that are behind the curve with a vengeance. Businesses have to become great at both sourcing and retaining talent. It’s not an either/or proposition. Some firms are re-imagining sourcing in breathtaking ways, including using novel methods and cutting-edge technology to get better qualified individuals. Too many HR technologies were designed for a pre-2008 world and, as a result, are no longer relevant. Old technology doesn’t address digital water coolers, new media, self-curated records, and more. The processes changed but many technology providers didn’t. HR professionals are unhappy with the current state of talent, HR, and related technologies, including fragmented solutions, high costs from solution providers, and the added cost to integrate different technologies. There are now a number of fairly urgent action items that HR and operational executives may need to address in their firms. Businesses may be facing substantial challenges in their ability to attract and retain any talent, let alone great talent. HR technology providers have serious matters to confront as well, including the need to re-imagine HR and Talent Management to be more relevant, flexible, innovative, and less costly.   Download this whitepaper: Talent management: Strategies for a new era >

Consulting

Talent management: Strategies for a new era

Our client’s need A growing law firm relied on an accounting manager for nearly 20 years to lead their finance team. To support the firm’s ongoing growth initiatives, leadership felt a need to top grade its finance talent but was uncertain of the skill level and experience appropriate for the role. Furthermore, the successful candidate required more than just a great resume, they needed the ability to collaborate well with a diverse partner group and the ability to manage change while honoring the existing corporate culture. Baker Tilly Executive Search solution By engaging with the client early in the decision-making process, we consulted with leadership to evaluate the level of talent needed to meet the firm’s growth objectives. To aid in this process, we provided a slate of candidates with diverse backgrounds, various experience levels, and different income expectations. In the end, the client determined that a CFO with large firm experience would be the right fit to lead the department. To ensure that the successful candidate would work well with the partner group and existing team, we helped arrange social time involving the finalists and key stakeholders at the firm. With two excellent finance executives to choose from, the law firm’s hiring decision did not come easy. Ultimately, the firm’s leadership engaged an industrial/organizational psychologist to help make the final hiring decision. Results Once the successful candidate emerged, Baker Tilly Executive Search assisted in compensation negotiations on the client’s behalf and ultimately helped land the firm’s top choice. For more information on this topic, or to learn how Baker Tilly Executive Search specialists can help, contact our team.

Growing law firm needs CFO to lead finance department

Congratulations! You’ve just been promoted to or have accepted a job offer as chief executive officer (CEO) of an organization. During your first 100 days, expectations of your performance will be high. One of your top priorities will be to assess the organization’s strengths, weaknesses, successes, challenges, and opportunities. One of your initial responsibilities is clearly communicating a compelling vision for the company’s future. How do you engage your employees in a dialogue around the direction you’d like to go and the culture you feel is fundamental to success? One effective solution is to master the art of storytelling. Reason alone does not inspire While data points, graphs, spreadsheets, and slide decks may be in your wheelhouse, droning on about your vision using these tactics is the fastest way to transform a boardroom into a “bored room.” Statistics show that only fourteen percent of the workforce retains and understands their company’s vision and strategy.1 Storytelling is one of the most effective ways to connect with employees at all levels within your organization and is an excellent approach to conveying your vision and aligning people behind it. Some of the most successful organizations, including Apple, Microsoft, NASA, Nike, and Starbucks, use storytelling as a tool to introduce new products, set goals, lead change, reach out to the public, and create a mystique around their brands. Storytelling is effective because it kindles passion. Strengths of storytelling The best stories address difficult challenges that may be on the horizon, but also highlight the opportunities these challenges present and the prosperity of the future. Employees relate well with narratives that describe the good and bad of new initiatives, because of the honest nature of the approach. When employees related with your story, they can more easily connect with you as a person and believe in you as a leader. Storytelling also increases the likelihood that people not only listen, but become engaged and inspired. Moreover, well-told stories simplify complexities and make them easier for employees to remember and pass on. Most importantly, stories help create a community and build a company’s culture. Elements of a great story The following elements help leaders create a compelling story: The hook: “Let me tell you a story…” “Imagine this…” “Picture our company as…” The hook ignites people’s imaginations, draws them in, and gets their creative juices flowing. Metaphors and analogies: Metaphors and analogies compare two things in order to explain or entertain. As a CEO, you want to explain and entertain. Using metaphors can help you make the complex simple and the controversial acceptable. They can help you ease into topics in a personal and memorable way. Emotion: Steve Jobs lured John Sculley from Pepsi-Cola to run Apple by posing the following question: “Do you want to spend the rest of your life selling sugared water, or do want a chance to change the world?”1 Challenging people or tapping into their emotions in other ways creates a hard to resist call to action. Relevance: Telling a story relevant to your organization’s current challenges and one that is understandable and relatable to employees is crucial. You want your audience to digest and feel compelled to retell your story so the call to action spreads faster. Drama: An element of drama can also help to make an impact with your audience. Just as Steve Jobs cleverly used the emotions of others to his advantage, he was also a master of surprise. He created a spectacle as he told his stories, using effects like lighting and sound at key moments in the narrative. For elaborate story presentations, you could consider using these tactics as well. For on-the-fly storytelling, gestures that elicit surprise can also be captivating. Watch your audience closely to see how your story is affecting them. Don’t be afraid to turn up the volume with surprise. Storytelling is a vehicle CEOs can use to make connections with their employees. Stories create new possibilities by shifting the business conversation away from metrics and facts and toward personal experiences that engage people at every level, not only with their minds, but with their emotions, values, and imaginations—the true drivers of change. Executive leaders interested in honing storytelling skills can start by picking up a book on the subject. Many CEOs also take classes in storytelling or improvisation. For more information on this topic, or to learn how Baker Tilly specialists can help, contact our team. 1Schoer, Allen. “Mastering the three “I’s” of storytelling.” The Washington Post, July 22, 2012.

Storytelling: The CEO X factor

More than 90 percent of businesses in the US are family owned. Collectively, they employ 62 percent of the nation’s workforce, contribute 64 percent to the US Gross Domestic Product (GDP), and create 78 percent of all new jobs.1 Sometimes family business owners need to hire non-family Chief Executive Officers (CEOs) to lead their companies. While the reasons for this type of change vary, the following best practices are helpful for selecting a non-family CEO: Establish a strategic plan: To prepare for succession, family business owners need a strategic plan. This roadmap for desired growth and initiatives is fundamental to the selection, onboarding, and retention of an effective non-family CEO. After developing the plan, family business owners can identify the qualities and talents needed in future leadership. The strategic plan helps match goals and objectives with both the technical and subjective qualifications needed in a non-family leader. Evaluate your company’s familiness: Take time to identify your company’s distinctive familiness. Distinctive familiness is a combination of the unique cultural dynamics, unwritten values, and systems existing in your business that help generate wealth and profit. During the process of identifying these advantages, families may also recognize some constrictive familiness. These constrictive attributes and behaviors are hindrances to your company’s success caused by the same dynamics, values, and systems that allow it to thrive.2 Families should address these limitations head-on to attract the most talented CEO candidates. Communicate the decision: Clearly communicate—to all vested family members—the decision to look outside the family for the next leader. If this is the first time the company has considered a non-family CEO, there will likely be many questions and concerns. Using your strategic plan and analysis of distinctive and constrictive familiness within your business, keep family members informed about the recruitment process and the reasons behind an external search. This helps set the stage for change and enables the successor to enter a more supportive environment.3 Conduct a thorough search: Executive search firms can assist family-owned companies by providing access to a broad pool of properly qualified candidates. In addition to technical qualifications, search firms can vet candidates for cultural fit. No matter how talented or how successful a candidate may have been elsewhere, if he or she do not share similar values to those present in the family business, recruitment may be unsuccessful. To improve the chances of success, several rounds of interviews and social time spent with key family members are highly recommended. Develop a communication plan: Once you’ve identified a successful candidate, develop a well-framed communication plan. The preceding CEO and successor should collaborate to prepare a joint statement to employees, vendors, and customers that outlines the company’s objectives and strategy and delineates all shifts in responsibility. An announcement about the outgoing leader’s plans for the future should be included, particularly if they plan to play a continuing role in the business. The successor should convey his or her commitment to the business and the family in the statement.3 Trust, but verify: After making the announcement, the work begins. Using the family’s strategic plan as a baseline metric, the board or family council should express clear expectations for the new CEO’s performance. In the first years of the CEO’s tenure, schedule formal and informal performance reviews. Moreover, the non-family CEO should meet periodically with the company patriarch or matriarch to gain a historical perspective. While the process of identifying and recruiting a candidate with the necessary demeanor and qualifications can be an arduous task, often a new leader brings unique skillsets and forward-thinking initiatives to the table. Although it is rare that a successor brings identical talents to the company as the founder or predecessor, CEOs are individuals and businesses develop around their strengths and weaknesses.3 A well thought out candidate selection process helps assure these attributes are properly identified so that the family’s vision for the business is achieved. For more information on this topic, or to learn how Baker Tilly executive search consultants can help, contact our team. 1“Firms Worth Fighting For: Family Businesses Keep Hope Alive.” UConn Business, 2, no. 1 (2010). Accessed January 30, 2015.

2Van Wyk, Rene. “Constrictive vs. distinctive familiness and the culturing of familiness capital (FamCap).” African Journal of Business Management, 6, no. 36 (2012): 9892-9900.

3BMO Harris Bank. “The Talent Imperative: The Essential—and Overlooked—Ingredient for Corporate Growth.” Forbes Insights. 2013.

Habbershon, Timothy G., and Mary L. Williams. “A Resource-Based Framework for Assessing the Strategic Advantages of Family Firms.” Family Business Review, 12, no. 1 (1999): 1-25.

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Healthcare & Life Sciences

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Manufacturing & Distribution

Change Management 

Six best practices for hiring a non-family CEO

There’s nothing new about the concept of emotional intelligence. The term became a part of the standard business lexicon in 1995 when author and psychologist, Daniel Goleman, analyzed jobs at 121 organizations. He found that 67 percent of the 181 competencies that distinguish the best performers at work are emotional competencies. When compared to Intelligence Quotient (IQ) and expertise, emotional intelligence mattered twice as much. Today, with the power of emotional intelligence (EI) now broadly recognized, many companies have incorporated EI assessments into their performance review and succession planning processes. However, few have found a way to incorporate EI assessments into their interviewing and candidate evaluation processes. To increase the chances of making sound hiring decisions, many organizations subject candidates to an extended interview process. According to author and leadership consultant, Adele B. Lynn, conducting more interviews is not the right answer. “What’s needed are better interviews—interviews that measure candidates’ emotional intelligence.” The subjective data obtained from incorporating EI assessments into the interview process for executive roles could give your business a significant competitive edge. Download this whitepaper: Interviewing leadership candidates for emotional intelligence > For more information on this topic, or to learn how Baker Tilly executive search consultants can help, contact our team.

Interviewing leadership candidates for emotional intelligence

With the massive exit of retiring Baby Boomers during the next twenty years, retaining and rewarding talent correctly has never been more important. This demographic shift from Baby Boomers to Generation X provides organizations with a predictable timeframe to align compensation strategies and organizational structures with Generation X motivators and corporate objectives. Historically, different generations approach their work and workplaces with different attitudes. Baby Boomers think in terms of ‘paying one’s dues’ and earning the opportunity for promotion and leadership. They sometimes postpone personal fulfilment and dedicate time to their career. In contrast, Generation X tends to desire work/life balance with personal fulfilment as a high priority. Their focus is on working smarter, not working longer. Companies should find ways to properly reward this next leadership generation in a manner consistent with these work attitudes and motivations. Appropriate executive compensation is essential to attracting and retaining this Generation X talent.  Download this whitepaper: Generational trends in executive compensation > For more information on this topic, or to learn how our executive search specialists can help, contact our team.

Generational trends in executive compensation: Survey results and commentary

Retention of quality employees is critical to the success of an organization, not only for top notch service to be delivered to customers, but for the bottom line return to the business owners and shareholders. Recruiting and training new employees can be the most costly aspect of running a business. So when the phone rings, and someone like me is on the other line, how do you "recruiter proof" your All-Stars? Well, here are ten coaching tips to help keep your employees from using me as their new agent! Make promises you can keep. Whether it is promising a certain career path or that the extreme travel will slow down, make good on your commitments or live with the outcome. Don’t sugar coat the reality of the role or what is going on in the organization. People know that you can’t predict the future, but if they feel they were misled…you have made my job much easier. Have an open door policy. If your employees feel comfortable coming to you with small concerns, they are more likely to come to you once something major comes along. Keep even keeled as a manager and keep it professional. Have fun. If you find yourself being the "Negative Nelly" take a step back and realign your attitude. Management sets the tone and if it is one of camaraderie and positive notes people will want to come to work and to perform well for you. People desire fun in their professional lives, too. Offer opportunities to expand employee’s skill sets. Let’s face it, not every company can promote everyone nor does everyone want to be a manager. However, most people want to feel challenged and know that they are contributing to the advancement of a common goal. Offer training, host contests, and provide encouragement to those that participate. Not in the budget? Respect, positive feedback, and letting people know you value them doesn’t cost a thing, and is appreciated more than additional money to many. I love calling people on a day when their boss just disrespected them. Check the market annually. Make sure that you are working with human resources or outside consultants to ensure that you are compensating your employees appropriately in the marketplace, as well as equitably internally. People DO talk about money. Be flexible. If one of your top performers comes to you with a personal or professional issue, try to accommodate them. For example, if your star employee’s parent becomes ill and needs a reduced schedule for a time, you might consider the big picture of having this person on a limited schedule for a few months versus losing them completely. My clients would be happy to provide the flexibility needed for YOUR star employee. Don’t give them a chance. Be willing to let top talent go. If you have a superstar on your team that really wants to be in a different department, let them explore it and if it makes sense for the business, let them go. It’s better to keep the person in your organization helping another manager than your competitor…no matter how good they make you look. Lead by example. Have you ever worked for a manager that told you to do something but never did it themselves? Walk a day in your associates’ shoes even if you’ve never done the job before. It will give you better context and will show you take your role seriously. If you can’t live up to your own expectations how can you expect anyone else to? Admit your mistakes. If you screwed up, or if you set an unrealistic expectation, just own up to it. Simple, yet very rarely done in corporate America. It will have the added benefit of giving your team comfort that they can come forward when they make mistakes, too. Update the work environment. Keep your workplace current for the talent you are trying to attract. This might mean you are in a sharp office in the heart of downtown or a smaller building in the suburbs for a shorter commute. It might mean reviewing policies (No Facebook at work? Really?), benefits, and culture along with the nuts and bolts of furnishings and fixtures. Company dynamics change; your location and environment might need to as well. Include your staff when deciding what needs to change to give your workplace a makeover; they will be much more likely to embrace the changes. The most recruiter-proof candidates work for organizations that abide by these coaching tips. Implementing these low-cost, easy to adopt ideas can save your organization thousands in recruitment and on-boarding costs. The market has turned in favor of the All-Stars. There is always room in the budget for top talent, so don’t give yours a reason to be a free agent.

Don't give your all-star employee a reason to become a free agent

The Doctor, a movie from 1991 starring William Hurt, tells the story of an egotistical heart surgeon who treats his patients like names on a list. When he gets sick and is treated in a similar manner, he realizes how his patients must have felt. Consider how this applies to the candidate/company relationship. If hiring managers used a better “bedside manner” with their candidates, many of the ills of bad hiring practices, including lengthy timelines, would be cured! When you are a candidate, each day feels like an eternity as you wait to hear the results or next steps of the interview process. Let’s take a closer look at what happens when the process is sickened by the time virus and the “bedside manner” could be improved. Candidates self-diagnose When a candidate doesn’t receive timely feedback, they may start having negative, inaccurate thoughts that destroy the positive feelings and momentum your hiring process had until that point. Thoughts like: “They don’t like me,” “I must be their second choice,” “They’re moving forward with someone else,” or “They don’t know what they want.” Time can cause candidates to rationalize why it’s better not to be chosen and begin to second guess their interest in your organization. It sends a message about the company culture If your hiring process is slow, candidates may believe your organization is an unwieldy, bureaucratic environment. Candidates often draw conclusions about treatment of current employees based on your process. Does the speed of your hiring process reflect your company culture? It sends a message about your ability to make a decision As a hiring manager, the process reflects on you as much as it does on your organization. Most candidates want to work for a strong, decisive leader. If expectations aren’t well-managed, time can cause candidates to question your abilities. Hiring managers may delay making a decision, hoping the answer will come to them. As stated in the song Freewill by Rush, “If you choose not to decide, you still have made a choice.” Candidates disappear It is a candidate’s market and strong candidates will be hired by someone else. Even if you’ve located a passive candidate (someone who wasn’t actively seeking opportunities), that doesn’t mean you can afford to lengthen the hiring process. If they are open to talking to you, they will likely evaluate other options as well. You forget the details about a candidate If you let the process drag on, you risk forgetting why you liked a candidate or what concerns you wanted to address. There are several important, but straightforward antidotes for addressing the time virus in your hiring process: Know what you need Often, a search begins before the hiring manager pinpoints the hiring profile. What is the ideal candidate? Which experiences and traits are required and which are preferred? If you know what you are looking for, be confident in your ability to assess/interview for those attributes. Keep the process moving Having the right team is critical to your success and vacancies need to be your priority. Minimize the risk of time by communicating timing expectations with the candidate, especially if there are expected but uncontrollable scheduling conflicts that may slow your process. When you find what you need, act quickly! It’s common to want to interview additional candidates after finding “the one.” This is a symptom of not being confident in your own hiring abilities or having not properly defined what you need. It’s like buying a house. You find the perfect house, but want to look at a few more just to be sure, only to discover that it was perfect and is no longer available when you’re ready to make an offer. It is important not to mistake this advice for shortcutting your hiring process. Instead, focus on eliminating excuses, procrastination, and other bandages put on a broken process. If you act quickly, you’ll earn a quick response to your offer. Many organizations take weeks and even months to make a decision, but expect a candidate to decide in a day or two. Strong talent is always in demand, and in a candidate’s market, it is even more important that time doesn’t plague your efforts. You spend a lot of time finding and evaluating talent, so don’t let the time virus kill your deal. Remember what it’s like to be in the candidate’s shoes and you’ll easily cure your process. If you don’t, losing the perfect team member due to time may just leave you feeling sick!

Time: A virus to the hiring process

Whatever the title of your top accounting position—CFO, controller, or bookkeeper—as a business owner you know that this position is the key in allowing you to focus on what you do best: run your business. A talented controller will do more than just make sure your books are in order. Today’s controller is more strategic and forward thinking—handling everything from choosing accounting software to preparing comprehensive business plans which incorporate financial and industry projections. Preparing to hire The market for talented accounting professionals is H-O-T. Now more than ever before, the most talented individuals have many options. In addition to refining your interviewing skills, you will need to brush up on your sales skills before you will be successful in attracting the desired candidate. Confirm that your salary and benefits package is in line with market and consider what else you have to offer this individual. Be prepared with company success stories including recent growth, top clients, and successful acquisitions. Expect to share, confidentially, your business plan. Make sure you know what it says and be prepared to discuss it. Your ideal candidate wants to be engaged in the business and will have good questions. Hiring strategies Our organization uses the “Three S” strategy to identify potential candidates for both ourselves and our clients: smart, successful, and stable. Having the right person in this top accounting position is crucial to your company obtaining the information and financial strategy needed to execute your growth plans. Hiring the right person, the first time, allows you to direct your efforts towards your customers and not the numbers. Smart “Smart” is different things to different people. The person you hire for this position must know your industry and the accounting field. In addition, the candidate must possess a general business understanding of economic and industry trends and apply that knowledge to help grow your business. Throw in a hefty dose of common sense (which is not that common, believe it or not), and your candidate meets the first strategy. In addition to degrees and certifications (which are important), the candidate must be challenged to provide real life examples of how his technical expertise was used to provide value to his former employer. If the candidate has the credentials, but is unable to provide specific examples of what he made, saved, or achieved in his prior positions, move on. Successful Human resources studies have consistently shown that past behavior is the best predictor of future behavior. In other words, if your potential controller has been successful in other positions or in other ways, like collegiate athletics or academic competition, she is much more likely to continue that success with your company. Ask your candidate to provide you with examples of prior successes. Find out what talents and traits she possesses that allowed her to achieve these successes. Are they relevant to what is needed for success in your controller position? Do they set her apart from others with similar background and credentials? Does she have a proven history of associating with successful people and organizations? If so, she is more likely to bring that success with her to your company. Stable Great companies hire great people and find ways to keep them! Talented individuals identify companies who can provide them with good career paths, and remain loyal as long as they are provided growth opportunities. The best employees have stable work histories, as they typically research opportunities up front and make good choices. They provide value to their employers, who therefore are unlikely to select them/their departments as candidates for downsizing or outsourcing. Be wary of the individual who has been “in the wrong place at the wrong time” too many times. When discussing work history with a candidate, be prepared to ask tough questions about his departure from each position. If downsized, gain an understanding of how many were downsized from the company. How were those to be downsized selected? How is his work being handled now? Do not accept vague answers such as “I left for a more challenging position”. Ask for clarification, and do not be satisfied until you have a full understanding of the reasons for departure. Once you have a complete understanding of his work history, you are much better positioned to make an assessment of his capacity to effectively assess a career opportunity, and to commit to it. Understanding candidate expectations Gain a good understanding of your candidate’s career goals. Is career ladder climbing important to her? Does she expect to work 40 hours a week or 70? Does she plan to remain in accounting or is she hoping to gain broader skills? Will joining your company help her fulfill her long-term goals? If not, no matter how much you like and/or respect her, this candidate is not likely a long-term solution for your company. Understanding the long-term goals of your candidates is crucial in finding the ideal person for your organization. Getting your new employee acclimated Once you have identified an individual who meets the 3-S Strategy, make sure the tools and information are provided for him or her to be effective in the role. Effective orientation has a high correlation to retention rates, and not just for staff level positions. Work with your Human Resources department or an outside consultant to create a new hire checklist. This checklist should cover supplies, equipment, and training, as well as identifying who is responsible for each task. You, or a long term employee in good standing, should mentor your new employee, especially on corporate culture and unwritten code of conduct. (Imagine your new hire’s embarrassment when, during his first week, he parks in the CEO’s parking spot which everyone else knows is his but is unmarked!) The number one reason a person leaves a company is due to their relationship with their immediate supervisor. And remember, be accessible for questions by setting and keeping appointments for regularly scheduled meetings. Use the 3-S Strategy to hire right, help your employee meet career goals, and have an open and honest relationship—these are the keys to having a long and mutually beneficial relationship with your ideal candidate.

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