Executive Comp. Series Part I: Recruiter Insights on Compensation Negotiation

Maureen Farmer: M.

Mattie Sheares: You're listening to Get Hired up, the podcast for next level executives and board nominees. The fun and informative podcast with host Maureen Farmer, CEO and founder of Westgate Executive Branding and Career Consulting. Westgate is a 100% independent premier executive branding and career services firm for high profile leaders who are serious about navigating the hidden job market to get hired up. And we especially love helping successful executives make exciting career moves that let them be leading heroes at home, not just at the office. So if any of these challenges are ahead for you, visit us@, uh, westgatebranding.com

Maureen Farmer: welcome back to the Get Hired up podcast. This series was inspired by the questions our clients ask every day. If there is a compensation, governance or executive career topic you would like us to address in a future episode, we invite you to contact our producer Madison Shears at uh, Madisonestgatebranding ah.comm a d d I S O N. We read every submission and use your questions to shape our future conversations. I'm your host Maureen Farmer, CEO Westgate Executive Branding and Career Consulting and I'm Mattie Sheares, the podcast producer. Over the years, one of the most common questions our clients ask is how should I negotiate executive compensation? Whether they are pursuing a public company role, joining a private equity backed business or considering a venture backed startup, executives want to understand how to protect and maximize their compensation while maintaining strong relationships with recruiters, boards and hiring leaders. To answer these questions, we are delighted to present a special three part series on executive compensation. In today's episode we begin with Scott Calderwood, an experienced executive recruiter who provides behind the scenes view of how compensation discussions unfold from the search firm's perspective. Scott explains how retained search works, the biggest mistakes candidates make when discussing comp, and how recruiters help both organizations and executives navigate the offer process. In next week's episode we'll be joined by Ezra Singer who will share his insights on structuring executive offers, negotiating severance and maximizing compensation while preserving important relationships. And in our third and final episode, Mary Russell will guide us through one of the most misunderstood aspects of executive compensation, the equity stock options and the legal and tax implications of startup and private company offers. We are very pleased to bring this series to our audience because it addresses some of the most important and frequently misunderstood aspects of executive career transitions. Before we begin, Maddie, what is one of your biggest takeaways from this series? I think that the series is a very robust and transparent look into executive comp and I think where we have three different perspectives to shape the Entire series, our audience is going to get a well rounded perspective and insight into it. All three are different, but all related to executive comp. And I'm really looking forward to our listeners hearing it. Absolutely. What about you? Me, I guess at this level, uh, just how negotiable total compensation is. And despite, you know, the years in practice, I learned something new and different every day. I would say the biggest impact for me was Mary Russell, simply because startup compensation, equity shares, and that whole journey is such a complicated topic. And given that we work with private equity leaders who are sometimes backing startups as well as vc, I think it's a fascinating perspective on the business that hasn't yet earned income, the financial rigor that goes into this type of, um, an evaluation and calculation, having an understanding of how the process unfolds, especially as Mary says, within a very compressed time period. So decisions have to be made quickly. So understanding what that process is can be incredibly valuable to the candidate who's negotiating that. So I'd say that was my biggest takeaway. Now let's begin with Scott Calderwood, CEO and founder of Calderwood Search Partners and the recruiter's perspective on executive compensation. So Scott, welcome to the Get Hired, uh, Up podcast.

Scott Calderwood: Thank you, thank you for having me.

Maureen Farmer: Absolutely. And we're excited to be presenting this series in executive compensation and we'll be talking, talking about other issues that are tangentially related to executive compensation, such as timing of negotiation and multiple perspectives of both the corporate client as well as the candidate side. And Scott, I would love for you to tell the audience about your recruiting practice and who you primarily serve.

Scott Calderwood: Sure, I'd be happy to. So Calderwood Search Partners. We work primarily with small to midsize companies focused mainly on technology. My team is very talented in many areas, but we choose to put our primary focus on companies that are looking for mid to executive level sales people, technology leaders and executives. Again, we've done a lot of work outside of that, but that's where we focus. So the small to midsize companies, uh, that are looking for more of a talent acquisition partner than just a recruitment agency. We like to partner up with the companies and really learn who they are, what makes them tick, learn all the soft points about the company because that makes us able to provide much better fits for their organization. So we're a boutique firm, we're not large, we're based out of Calgary, Canada, but we, we service North America and we probably do about 70% of our business in the United States. But we're also Part of a much larger organization in a revenue share model called Sanford Rosen Associates, which is based out of Plano, Texas. And that model allows us to operate like a nimble boutique firm, but to have the resources, scalability, support and expertise of a large corporation.

Maureen Farmer: That's great. Thank you for sharing that. And when you, you're talking talent, uh, did you say talent management system, talent

Scott Calderwood: acquisition leaders, that's where we like to focus. We're not a fit for organizations that like contingent recruitment where there's, you know, there's, there's no real agreement unless, you know, if they hire someone, they pay you. If they don't, there's no real solid engagement. We don't like that model where there's a term that I think was considered a bit derogatory at one point, but it's headhunter, and we proudly wear that badge. We like to work with companies that want to find the very best person in the market for their role. Something that you can't do by advertising the position or just throwing resumes at them. We like to do, you know, look for all the soft skills the technical requirements are given, but we like to take it the extra mile. And we back that up with a five year replacement policy because we're putting our money where our mouth is. Does that make sense?

Maureen Farmer: Yes, absolutely. And I think I'd like to go back to something you said to me a couple of years ago about the efficacy, just for the interest of those listening. The efficacy of a contingency model versus a retained model. I remember you mentioned a statistic that contingency searches generally have a lower success rate.

Scott Calderwood: I think the last number that I heard or stat was about a 30% success rate all around. That means that the recruitment firm, the recruiter has a 30% chance of placing a person or finding the right person. The company has a 30% chance of the recruiter from finding someone for them. And uh, it's one of those scenarios where when the going gets tough, the recruiter gets going on to something that's easier. And so what happens in a contingent, there's an agreement in place that says if we hire your candidate, we'll, we'll pay your fee. And if we don't hire your candidate, you know, there's no harm, no foul, basically. But, but a recruiter could spend 100 hours on a search and then there's nothing at the end of the day. And a lot of firms think that their best strategy is to have three or four recruitment firms doing that type of work for them. And they'll, you know, they'll get a better, better result or a better chance of success. But what happens is that the recruiters take the path of least resistance. They don't do as much screening, and I hear it all the time from hiring leaders that oh, uh, you know, what kind of recruiter are you, Are you going to give me 30 applicants that I have to dig through? Which if that's the case, why didn't they just advertise the role themselves?

Maureen Farmer: This is so interesting because there are some nuances here I think maybe I would love to untangle. This makes sense by the way, because I think many of us have been a candidate of a contingency search. Oftentimes I suggest to clients to ask the recruiter if it's a retained or contingency search.

Scott Calderwood: Mhm.

Maureen Farmer: For that reason.

Scott Calderwood: Yeah, the retained model is much better because it's like we won't engage in a search unless we're exclusive. We occasionally do contingent, but we don't treat it like a contingent search. And we'll only take that on as if it's a brand new relationship. They don't know us. We think that this is worth the risk to build a relationship with the client, improve what kind of work, the excellence that we can provide through our search practice.

Maureen Farmer: Hence the talent acquisition approach that you take to your practice.

Scott Calderwood: Yeah, we have an extensive process before our client ever sees a candidate that we put a candidate through. We have uh, Our stats are 97% acceptance rate when we present a candidate that goes through the whole piece. That doesn't mean that they can't decide that it's not the right fit for them after they're in the process. But if we get to the end stage, we know that our candidates are going to accept the role unless there's something really, you know, they have a competing offer and we know that up front and. But huh, the client still wants to go through with the candidate because they're very interested. We check all the way. We feel that it's our job to represent both sides because there's nothing worse than hiring someone and then them having buyer's remorse and leaving. So we check all the way. How did the interview go? Did you get all the answers you're looking for? Do you still feel the same? Do you want to proceed to the next step? Can I answer any questions for you? We do that and we do that on the client side as well. How did you feel about the candidate? Do you think they're a great fit? Because we don't Want to progress someone through a situation that's not a fit for them because it's not going to be good for the client, it's not going to be good for the candidate, and it's not going to be good for us because we guarantee our candidates and it's very expensive to hire the wrong person. So we're very sensitive about that. And we do our best to be as transparent as possible and to really focus in on is this a fit or not.

Maureen Farmer: Thank you for that. Sometimes what I hear from friends, clients, candidates, is that it's sometimes a bit of a mystery. The recruiting process feels like a mystery to them. And I appreciate your candor and transparency toward both, uh, your client and the candidate. For just a moment for clarification, in terms of headhunting versus recruiting, can you give us your definition of the difference of each of those and how they're different?

Scott Calderwood: Absolutely. So a lot of recruiters, what they do is they get a job order, they put together a job ad. Ah. And they post it. You'll see a lot of recruitment companies with jobs posted on LinkedIn, indeed, Google jobs. You know, whatever. We don't do that. We consider ourselves true headhunters. We believe that if the role can be advertised and you can find the very best person in the market, why do you need a recruitment firm? And I've. I've heard executives really upset about the fact that recruitment firms have done that. But it's a standard process, and a lot of the big firms and small firms do it. But when you advertise a job, and I don't have the exact stats, it's been a little bit since I looked at it, but you're basically, if you advertise a role and someone responds, it's about 20 to 30% of the market that's actively looking for a position. So if you hire or a company hires from a job ad, they're going to hire the very best person they can from that 20 to 30% of the market. What a headhunter does is we don't care if the person is employed or unemployed. Most likely the person's employed. They're doing very well at what they're doing. They're at the top of their game. They're happy, but they're open to being happier. You know, and people have different reasons for that. But a lot of people will engage in a conversation, discussion, uh, you know, what could progress their career in a positive way, even though they're loving what they're doing. And those people will not be looking at job ads, they will not be filling out all the steps that you have to go through to engage on a job posting. There's a lot of talk right now and frustration in the marketplace about how futile it is to apply for a position online. People tell me that, you know, if they get a response and someone wants to interview them from the 100 applications they put out or whatever that was, is that they should probably go buy a lottery ticket the same day. That's how challenging it is to get a response. When you apply online, you're getting AI, you know, checking the box of did you know, do they meet enough of the criteria or. I was the director of business development at a billion dollar company for their professional services division and I needed to hire, uh, fill a role for a senior account executive. And what I learned is these young people, they're trying really hard, but often they're juggling 10 positions or more and they don't understand the roles and they're not able to discern who's a good candidate or not. And so they miss some great people because they're just checking boxes. So what we do is we take our candidates, we find the very best people before we do any reach outs. We go from a list of, uh, probably 500 or more and we try to narrow that down to the top 100 and then we do our homework to see if we're really a good fit from there by, by engaging those people. So it's a very different model. It takes a lot of time and effort to do it well, but it's worth it because if you hire the wrong person and they don't work out in two or three months, that costs like I think the biggest misconception is that recruitment's really expensive. Well, the cost of using a recruiter is so small compared to the cost of bringing someone on, onboarding them, having your team, train them. You hire the wrong person, you lose that productivity, you go back into recruitment mode and then you bring them on again. The cost of the company is huge, Astronomical. Yeah, when you look at it like

Maureen Farmer: that, I recall a time many years ago when I worked in corporate and this was a Canadian company and we brought on two C level executives and within two years they were both gone. And the reason they didn't stay has to do with a, uh, cultural phenomenon in a certain part of the country where people who come from other parts of the country don't always feel welcome. And this is not specific to that particular company, but when I think of what we went through to Acquire them and they were gone within nine months each. Within that two year period. The cost was just astronomical. And so I agree with you, hiring the right person is an investment.

Scott Calderwood: It absolutely is. And if you look at sales leaders, it's easier to gauge what a uh, sales rep does. So you hire an account executive like I led commercial and enterprise teams and if you know I've got how many millions of dollars of quota and it's divided by the number of reps or whatever that is, but you get an open spot, you lose someone in January, you've got that annual quota for X amount of millions of dollars for that, that rep. You go through the interview process, you hire as quickly as you can. By the time that they're giving notice and coming on, all of a sudden you're in March, February, March if you're lucky and then you're ramping up. Salesperson takes you know, typically six months to really get their feet on the ground. Now some of them might start quicker and get deals in, but it's still going to be a stretch to get that quota done. But what happens if they leave in June?

Maureen Farmer: Right.

Scott Calderwood: You know, then you're going into the summer. It's really hard to hire in the summer. So you're probably having a start date in September and they're ramping up. So you lost a whole year of quota as the sales leader.

Maureen Farmer: Mhm.

Scott Calderwood: But if you take an extra week or two, you're not just having resumes thrown at you or taking whoever's applying, but you're finding the very best person that has the right motivation to move. We spend a lot of time putting together information about the company and the great things about the company and the challenges of the company and you know, the job description obviously, but all the other pieces. And so when someone gets to that stage, they're really excited about joining and they want to be there. There's no surprise. There's always some little surprises and things like that, but nothing that would be major enough to, for them to say this was a terrible mistake. Again that buyer's remorse. Ever had that feeling, you buy something or you take a job and then you get there. It's like you know this, what did I do?

Maureen Farmer: Oh, 100%. It uh, was one of the decisions I made um, mid career that uh, I was immediately regretful for and I moved to a company that was a very, very, very well respected company in Canada and everyone wanted to work there but I felt as though I had made a mistake and for a ah, candidate I didn't do my due diligence. I didn't do the due diligence that I needed to do to ensure that this was the right move. And if you're, if you're a person who is, is considering a transition, do the due diligence as any organization, uh, would do. As they're, you know, onboarding a new candidate, do the due diligence. Make sure you know what you're getting into. I'd like to transition into a different aspect of the recruiting process related to compensation, specifically executive compensation. What is the biggest mistake candidates make when they talk to recruiters about compensation?

Scott Calderwood: I think the biggest mistake is when they're not honest with the recruiter about exactly what they're looking for. I try to be very clear, you know, tell me what you're looking for, let's talk about it. I'm not going to pigeonhole you with it, but we need to. If I'm going to the client, their expectation is, is that I'm telling them what you're looking for. What is a yes for you? And the biggest mistakes I've made is that someone's not honest about it and they get to the offer stage and then they're jacking their number up.

Maureen Farmer: Mhm.

Scott Calderwood: And you know, my first comment is, if that's what you really want to do, we can. But it's really going to hurt your credibility with the organization because we told them, based on what you, um, shared with me and confirmed with me, is that this is what you're looking for. If we go back, you're going to lose credibility and it, it starts creating doubts in the, uh, hiring company's mind. When that happens, there is room for negotiation to a point. It's kind of like you're, you're, you've got a lawyer, you're on trial for something, and you know, you see it on TV all the time. You have to tell us the truth, what's going on. It's the same type of thing. We are your advocate. Hm. So let's talk about it up front. And if your expectation, like don't use a lower number, thinking that's going to get you in the door and then you'll bump it up on the end, that's going to hurt you more than just being honest. And we will help the candidates navigate. If they say a bigger number, we'll say, you know what, let, let us deal with that. We will have a chat with the hiring leaders and before we put you through this process, that that's something that they can Handle it. Might even come back saying, you know what, you're over their budget, but they'd still like to meet with you and then they will determine from there. But you're not doing yourself any favors if you're not honest about what that number needs to be right up front.

Maureen Farmer: Do the candidates ever ask you what the budgeted range is for the role?

Scott Calderwood: Yeah, uh, absolutely. Most candidates want to know that right away because we're the safe place. And that's why we like to work on both sides and help them so they can ask us any questions that they might not ask for the client. But we try to talk about that right up front.

Maureen Farmer: It's such an interesting topic because I think a lot of candidates, and I guess you can't speak for every recruiting firm out there, but, uh, a lot of candidates are reluctant to, to give a range or an exact number for the fear of being pigeonholed.

Scott Calderwood: So I try to be as transparent as possible. Now, sometimes, often we'll have a client say, you know, this is the range. The range is $180,000, like 160 to 180, depending on their skills. But what we often hear is that they'll say, this is what we want you to go to market with. Now, if you meet a superstar and we can justify it, we do have some wiggle room to bump that up. What I will tell a candidate is if, you know, what are you looking for, and we try to confirm we like them, um, to tell us what it is. If someone says I'm looking for, well, it's been tough market, so I'll take 160. We're not going to go to our client and say that it's going to be 160 because it doesn't work. Well, if they were at 180 and they're saying we're going to take 160, if I place them at 160 and someone else comes along, they're going to be happier with 180 or 190. The hiring company that just hired them is going to be at risk of losing them. So I will go in and say, you know what they're at, uh, 180. There could be some flexibility there, but I'd really recommend that you do this. And I'll say to the candidate, I really recommend that we go in at this rate. So if I can't disclose everything because I have to represent both parties fairly, I'm not going to give away what they're looking for. You should treat your Recruiter as a safe place if they're a good recruiter and the client should trust us to give them good information. Because we're not just trying to place a person and get a quick buck. We're trying to make a long term placement that everyone's happy. It's not a successful placement if it's not a good fit on both sides and that includes financially and long term. We don't want to place someone that's going to say, well, I'm just going to accept that because I need a job and I'll see what else comes along that's not a good fit. And if we got any whiff of that, we would probably remove them from the process.

Maureen Farmer: That takes us into another question I think is an interesting one. Do you find or have you found that any of the candidates that you've worked with are using this process for leverage?

Scott Calderwood: Yes, and we, we have a process to weed them out from that. We take them through many steps. Do you want me to give you a quick recap?

Maureen Farmer: Sure, that would be fantastic.

Scott Calderwood: Okay, so when we do our initial reach out, we'll have an initial conversation, very high level with the individual and we'll, we'll share details about the company verbally, we'll talk about the role, talk about what it looked like and we give them some high level details and then we say, you know, would you like to pursue this further? And if they say yes, we say, okay, great. What we've done is we've put together a complete package on the company, some of the things that stands out about them and about the job description and we try to put together a package that's informative and we say we're going to send this to you, but what we'd like for you to do is to do some homework on the company and you, you decide if you would like to pursue this and come back. We get a very high response on that, saying, yes, absolutely, we'd like to continue on. So if they do that, then we interview them. Okay, great. So what did you learn about the company? You know, share with us why you're interested and we put them through a more detailed interview. Once that's done, do you want to proceed? Yes, I would.

Maureen Farmer: Great.

Scott Calderwood: We're going to send you over just four or five questions that we'd like you to provide well thought out, detailed responses to their questions that would be part of your initial interview. So we're going to check that box. And what this does, this process does for you is it, it allows you to make a great first impression with the hiring leaders. It allows them to get to know you a little bit before moving forward. It allows them to see how you communicate in writing. And for us as the recruiters, we get to see if you're serious or not. If we receive a uh, response back, that's one liners or very little effort put in, we typically remove the person from the process at that point. Someone that's using this to try to get a promotion or a raise won't put the effort into it because there's other ways for them to do that.

Maureen Farmer: Do you disclose that to them?

Scott Calderwood: No, I don't usually tell them my part. I tell them all the other pieces. I tell our clients that that's why we do it because we, or if we get a response back and it's, you know, you can see that either they didn't put the effort in or they're not going to communicate at the level that's required. It's a really good point of reference to decide is this a fit for our client.

Maureen Farmer: So essentially you're pre qualifying the candidate long before they are in front of the hiring decision maker.

Scott Calderwood: Yes. And if it's a technical role, we actually have a skills matrix that we have them fill out that takes like two minutes that talks about different technologies and you know, are they novice, intermediate, advanced type of thing. But this process helps candidates get through to the interview where a resume and just some notes from us won't do that because it allows the client to get some insight into the person and how they think. Opposed to, I've had people rejected when you don't have enough information for, for the client when it comes to just the resume, sometimes I push back. I said, you know, I, I understand why you're thinking that based on the resume and you know, I, I, I missed a few of the key points in my notes to you, but here's the reality and then I've been able to move them forward at times, but there's just some bias there that, you know, if they don't see the resume is not in the format they want or you know, there's just so many different nuances about why someone would do that. So the effort in putting that together for us is really worthwhile on both sides and it makes the candidates much stickier.

Maureen Farmer: Right. And more confident. That's excellent. So you've gone through the recruitment process. The hiring manager has decided on the candidate they want to extend an offer to. Now what's your role once the offer is about to be extended to the candidate. Now, how does your role change as the recruiting firm?

Scott Calderwood: We will do as our clients want. Like, we have a great client and the leader likes to present the offers himself. So if that's a preference, that's great. Our preference is that we always present the offer. And what that looks like is, we'll have been talking about this as we've gone through the process, but once we have the offer, I'll have them send it to me. I will not present the written offer to the candidate. What we'll do is we'll get. We'll get on a video call or a phone call and we'll talk through it. And, you know, Maureen, you know, how do you feel about this? This is what they're offering. Here's the extra perks here. Here's all the pieces. How do you feel about it? Is it meeting your requirements? This is what we talked about before. I think that we've had all those. But are there any concerns? Ask me anything. And that's really important because if the hiring company is presenting the offer, this is where the buyer's room. I keep using this term, but they are nervous about asking the question. They're not sure if it's appropriate. And sometimes the questions are not appropriate for the client, but they certainly are for us.

Maureen Farmer: Can you give us an example of what. What's a typical question that would be appropriate for you, but not for the hiring manager?

Scott Calderwood: I don't have anything specific in mind, but something that I know that the hiring company might be sensitive about or, you know, they're pushing back on some of the compensation. Well, I really would like this. Or more. And then we can caution them, say, you know what, that's a great question. I'm happy to take that forward. Or, you know what? I'd really caution you on that just because we know the client. And I'd give them a little bit of insight. You know, the example is they want more money. They thought about it, and someone's. They've talked to someone, and that someone has convinced them that they should be getting an extra $15,000 or $20,000, you know, whatever. And what we would say is, you know what? I think we should go forward and ask these questions, and I'll get clarification for you or clarity on that. But I really caution you to not push this button because we made a commitment that this was what a yes was for you. And sometimes there's a little bit of wiggle room. So it depends on what we know on how we can advise them, but at least we get those questions done and answered for them. And usually if someone's got this in the back of their mind that they want something and we caution them against it, we want to make sure that they're comfortable with what that decision was, to not move forward with that and to address their concerns, to talk about them. And they can't do that. Sometimes, you know, they'll hold it in and they just won't ask or they'll push. Like I've seen offers rescinded when the push has been too much on money or something else and the person probably would have been okay with it, but they decided to go down that path when they probably shouldn't have.

Maureen Farmer: Right. Sometimes they may become somewhat adversarial.

Scott Calderwood: Um, people start second guessing or they, they're sometimes a little bit insecure or they get too confident and they don't know all the parts because they're not going to know all the parts. Where we're advising and representing on both sides, we have some good insight, but we're looking at the best interest of both parties. Because if, if we represent both parties, we can find the strongest fit.

Mattie Sheares: Mhm.

Scott Calderwood: On both sides. If all we're worried about is making a commission check by placing the person as quickly as possible and who cares if they're a fit or not. Let's just get them in place and hope that they stay. That's a terrible situation to be in.

Maureen Farmer: Once the offer has been extended to the candidate, obviously they'll want to take some time to review it, think about it and come back to you with questions. What components of the offer are negotiable and at what point? And I'll give you an example because this is the one that comes up a lot and that's severance. So how do you manage or handle the severance issue with your executive candidates?

Scott Calderwood: It's really a case by case. We work in the small to mid size realm.

Maureen Farmer: Mhm.

Scott Calderwood: So a lot of the time there's different parts of the package. So maybe a lower salary, some equity pieces, there's shares. It just depends on that package. But how we approach it is what's important to you. What do you want to see? And we'll talk back and forth with the client. It's very different, I find, per company and per individual on the candidate. So there's not uh, one size fits all in that.

Maureen Farmer: Sure. Yeah.

Scott Calderwood: It really is just about having the perspective of not stepping over a line on either side but representing both sides. To say you Know what, That's very reasonable. Let's talk about it or let's get this on the table because you know, from our conversation, I know that you won't be comfortable moving forward unless we have this addressed. Our job is to help negotiate that, uh, on both sides. Kind of like a mediator.

Maureen Farmer: Right, right. I'm thinking of a scenario where let's say cfo because they would be reporting into a CEO and this is more of a relatable example where you know, the CFO makes that transition and then six months later the CEO leaves. So now that CFO is going to be reporting to a new manager and now all of the plans, all of the rules have kind of changed because they were expecting to be reporting to that particular CEO and now they're gone. A new CEO comes in, brings m his or her own team, CFO is uh, terminated. So protecting that candidate on the downside is something that is apparent to me as many of the candidates and clients that I talk to going through that process.

Scott Calderwood: Yes, absolutely. And you know, that's a real high risk situation. The CFO is happy where, where they're at. It's a great opportunity.

Maureen Farmer: Mhm.

Scott Calderwood: But they're usually quite sensitive about okay, what happens if something changes. I'm secure, I don't need to leave it. I'm very, the opportunity is interesting and I think it could be really great for me and I think I could be a great asset to the company. So there's a lot of intriguing things there and, and I've seen where actually exactly a CFO got into this. But there were some unknowns with the future of the company.

Maureen Farmer: Mhm.

Scott Calderwood: With the CEO and a few other parts. And it fell apart at this stage because they couldn't come to terms with what that looked like. It was just too much risk and it made uh, the candidate uneasy to step away from something so solid. It has to make sense that if something changes in six months and you can be very specific if leadership changes, you know, I want to be protected. I want a guarantee of uh, X if this happens. And again, it's very individual.

Maureen Farmer: Yes.

Scott Calderwood: Based on the company, the scenario. And you know, a lot of these small mid sized companies are building things up so they can sell, be acquired and that's a risk right there. And that's where I've seen, you know, some of these pieces to be a little bit harder to negotiate or to fill in because the company that's hiring doesn't want to expose themselves too much because there are some unknowns coming up, but the individual that they want to bring on doesn't want to absorb all that risk.

Maureen Farmer: Personally, I mention this Scott, because I have worked with a uh, number of, of individuals who have been promised equity, who have been promised succession and there's really no guarantees in life. And I do realize that. But you know, protecting oneself on the downside I think is a prudent thing to do. So I'm curious from your perspective in terms of severance, when the best time is to negotiate that from your point

Scott Calderwood: of view right up front, right in the offer, you need to have that baked in. What does it look like whenever you get into a new business or whatever you have to have because heads are cool at the time too. So it's best to do it right up front. So you have an exit plan. At some point you're going to leave unless you're planning on retiring there. And whether that's on your terms or their terms, but it's going to happen. So it's good to have that worked out of what it looks like. So there's no second guessing, you know, when you're talking about an executive position that needs to be very well understood what that looks like right up front.

Maureen Farmer: So you're suggesting that severance is negotiated at the same time as base compensation.

Scott Calderwood: Yes. Yeah, I think that needs to be in the offer, like just at least the structure of it.

Maureen Farmer: Right.

Scott Calderwood: You know, this is what would look like again I do work with smaller mid sized companies that are in growth stage and a lot of them have the desire to build it so they can be acquired or emerge. And so that's already on the table that that could happen and you know, you nailed it. When a new leader comes in, you see it over and over again. They want to make their own. Mark, I was just meeting with a candidate the other day who had a multi millions and millions of dollars of uh, cybersecurity deal that they had on the table that was about to be inked and leadership changed at the last. Everything got put on hold.

Maureen Farmer: Yes.

Scott Calderwood: And then it never moved forward even though it was right solution because they wanted their own, you know, they want to have their own success. They don't want to ride on someone else's coattails which is not very productive. But, but you see it over and over in corporations when, when things like that happen. So it's again it's a big risk for an executive to do that. They just have to decide that they're going to be okay if, if something changes that at least they'll be taken care of long enough for them to be able to find something else which could be up to six months. You know, especially in a C suite role for some people it happens really quick, but that's usually timing. Right place, right time and relationships. But others, especially in the environment that we've had for the last few years, especially in technology, those timelines can be stretched out and I, I can't tell you how many conversations with executives that I've had that have been looking for too long. And it's not because they're not fantastic, it's just what the market had provided the last few years.

Maureen Farmer: It's a function of the economy and Absolutely.

Mattie Sheares: Mhm.

Maureen Farmer: Other factors as well. And so a couple of last questions related to the negotiation, then we'll have a couple of more questions before we round off the call. The question I'm thinking of relates to non competes and non solicits. So do you see a lot of those, those restrictions in your offer letters? I know you have a Canadian US Split, so I'd be interested to see your perspective on uh, non competes.

Scott Calderwood: With the non competes we see those in most offers where the teeth is, with the non competes is you can't approach our customers on the same thing. That's where you can get some teeth. But sometimes the non competes read like you don't have the right to earn a living with your expertise. And I don't think that those hold as much water. It's tough. But a lot of the executives I talk to, especially if they're transitioning or they, for whatever reason they left, they're saying, you know what, I can't work in this area but I can, you know, everywhere else, but I just can't do this. Uh, I think you, everyone needs to honor in the non compete where it's saying, you know, you're not going to be sleazy and go after the same clients.

Maureen Farmer: Right.

Scott Calderwood: You know, we paid you to help bring on.

Maureen Farmer: Mhm.

Scott Calderwood: That's, that's not appropriate. But I think that non competes are taken too far in other areas and they just do that to try to scare people.

Maureen Farmer: Yeah, it's interesting. So Scott, what do corporate clients often misunderstand about the recruiting process? If anything? I'm just curious what your perspective is on that.

Scott Calderwood: I think often it, we've covered some of it, but it's, they think that recruitment's really expensive and recruiters don't have the best reputation in the market. And it's really hard to overcome that sometimes because there's the People out there that are just in it for a paycheck, not about actually helping people. There's a lot of fantastic recruiters out there that really care about people and want to help people get a great career next step, uh, but also want to help companies to be successful by having the right people in place. I think the biggest misconception is that recruitment is expensive. And if I post a job ad, I can find someone great. Well, you can find someone great, but you've only got so much of a percentage chance that you're getting the best person for your company by posting a job ad.

Maureen Farmer: We're really talking about an investment versus cost.

Scott Calderwood: And yeah, one of the biggest mistakes they make is they think it's expensive to use a recruitment firm. So they'll post a job, they'll use contingent, but they're really not getting the best person who can help their company take them to the next level. And if you're going through and hiring someone, you're paying them $200,000 a year. Why do you want to rush skimp out on finding the best person that can provide your organization with the best results? If you can hire the very best person that is very likely employed? The COVID piece changed things. So there's more people unemployed than there used to be because there's been so much upheaval, uh, especially in the technology market where I mostly work. And if you can find the very best person, you're going to get better results for that same amount because you're not going to pay a bigger salary by finding the best person in the market. Not likely. Maybe a little bit more, but you'll get that back in spades if you hire the right person that can do the very best for your organization.

Maureen Farmer: So on the other side of it, what do most executive candidates often misunderstand about the recruiting process?

Scott Calderwood: I think the biggest misunderstanding, which isn't completely a misunderstanding, is that recruiters, uh, don't care about me. They just want to place me. A good example is I used to get called by recruiters at least a couple of times a week when I was in sales. And I had a recruiter once call me up and say, scott, I have a once in a lifetime job opportunity for you. You wouldn't believe what this is. You'd be crazy to not go after. We hadn't even really talked about it. And it really turned me off. Right, right from the beginning because she didn't know me well enough to tell me what a once in a lifetime opportunity would be for me. But the majority of good recruiters out there care about the people, and they want to find a good fit not only for the candidate, but also for the client, because it matters on both sides. You know, just like in anything, you can get some, um, people that are not as serious or, you know, they don't care about the right things, and they can taint that view, in this case, recruiters.

Maureen Farmer: I had a gentleman on the podcast actually was during COVID Richard Duguy with, uh, Boyden. And, uh, he wrote a book on personal, uh, branding called Stand Out. And in the book, uh, he talks about how to develop relationships with recruiters and to do it early in your career and never not take a call from a recruiter. And I thought it was, ah, a really, really good advice because people say, well, I've not had to talk to a recruiter because I haven't needed to. And I'm like, as Roger says, this is, this is about, you know, a long game building relationships. And when the recruiter knows who you are, where you are and what you're interested, they can better represent you even without having regular conversations. You know, if you know that someone is with a company, they've been there for 10 years and they know that they're planning, you know, another five years there, uh, or whatever the timeline might be, they're in a better position to reach out to you when the time is right.

Scott Calderwood: The best recruiters have had relationships with people. So when an opportunity comes up, you know, they've got a good list or, uh, you know, a good idea of who they can reach out to. I think that people that are really concerned about their careers and want the very best for their career want to have a proactive relationship with a recruiter with the same mindset. So I spend a lot of time talking with executives. You know, what's important to you? The thing that I like to talk to people about or ask them is, have you sat down, uh, written out your dream job? What would you be doing? What industry would you be working in, what size of company, you know, all those pieces, what would you be doing? What would that be looking like? And then you share that with a recruiter. And so that recruiter is always keeping you in mind for that role. And you don't want to get to the point where you've lost your position or you've decided, I must leave and then start looking. Compared to having a relationship with a recruiter and them already being three steps ahead, a good analogy for that I've heard recently is Taylor Swift, everyone Knows who Taylor Swift is. She decides that she wants to act in movies. Do you think that she's going to go and read through 100 scripts or is she going to call her talent agent and say, this is what I want to do. I want you to find something for me. Or can you help me find something? Yeah, that's what a good recruiter does. A good talent advisor, agent, partner, whatever you want to call the person, if, if they're genuine, they will spend time with you, they'll learn about your background and, and maybe that's, you know, what someone says to me, Scott, I'm not looking to move now, but I know that I'm not going to retire here. So at some point I'm going to be looking for a different position. Great, let's talk about it. I'll have notes and AI is wonderful because we can get on online. You, we capture the whole transcript, we can do summaries, but we can capture all that information and then we can put that into profile. Some people may say, scott, I'm not actively looking, but if you ever found this, I'd want to hear about it. Great. You know, uh, if I find something, I'll bring it forward, but there's absolutely no pressure at any time. If it's a fit for you, we'll pursue it. If not, or they say, you know, I just want you to know and understand me and I want to have a relationship with you. Perfect. You know what, that's, that's worth my time because I specialize in this area. I'm going to have opportunities that may pop up, but I'm going to respect your boundaries.

Maureen Farmer: It's good career governance.

Scott Calderwood: Absolutely.

Maureen Farmer: Well, Scott, this has been a wonderful conversation and I know that the listeners here today are going to get a lot from it. These are conversations that we don't often hear of, uh, insider interviews with, with recruiters and getting multiple perspectives. I just have a couple of questions before we finish the call. The next question I have for you is what has surprised you most in your career so far?

Scott Calderwood: I led uh, and built sales teams for over two decades and I would hire the top performing salespeople over product knowledge. And one of the biggest surprises I have had getting into recruitment, which has been almost a day, decade now, but most sales leaders hire for product knowledge first and sales excellence second. And that, uh, that's always kind of surprised me because you can train on product, you can't train on the mindset of a top performer.

Maureen Farmer: I think that is golden, Scott. That's a Golden lesson and anyone listening here in this sector, uh, I see this as well. I see this at, even at the CEO level, uh, where the organization insists that the CEO needs to have X industry experience in order to be successful. I think that's the wrong question. That's the wrong approach.

Scott Calderwood: Agreed. You can train like product knowledge. It may take a month or two to get up to speed.

Maureen Farmer: Mhm.

Scott Calderwood: But that person's success, no matter whether it's sales or not, it's just, that's the one that came to mind most. That was the biggest surprise I had into the recruitment world because it was opposite of the way I thought. But I had top performing teams. I was blessed enough to be a really strong hunter and to be successful and got to go on the club trips and things like that. And so I understood what the makeup was and I had find fantastic people. But they, they hadn't sold this, but they've sold something similar. But no. And it's usually because the uh, hiring leader doesn't want to take the time to train.

Maureen Farmer: Yeah, good point.

Scott Calderwood: They think they're going to have a faster ramp up with someone with industry knowledge. But you know what if you take a one month hit or two month hit just for a little bit slower ramp up but you get someone that's a superstar no matter what role it is. You'll, you'll win in the end by hiring the person with that passion, with that capability. But we can see to our clients what they want and that's what we, we go after.

Maureen Farmer: So the last question. Well, second last question. Uh, we put together a restaurant list here every year and send it out to friends of Westgate. Love to get your favorite restaurant or two we can put on the list. So what do you have for us, Scott?

Scott Calderwood: Uh, there's. Oh boy. You're going to challenge my memory. There's two places in Whitefish, Montana that are favorite and one is a little Italian restaurant called Ciao Mambo Now. It might be called Mambo now or Ciao. I think they modified the name. But if you look up Chow Mambo you'll find them just fantastic little Italian place. It always has lineups. You have to make a reservation if you're going to get in there, but it's awesome. And the other place is the Whitefish golf course. They have a nice dining room and my wife and I had our anniversary there a couple of years ago. And it's very rustic. It's in like an old cabin setting, big old cabin setting. But the food was fantastic. It's one of those meals where everybody's like, oh my goodness, I can't believe how good this is. Yeah, I'm pretty picky. So those would be my two, my two favorites.

Maureen Farmer: That's awesome. Last question. How can people get in touch with you? Scott?

Scott Calderwood: The best way is email, which is. Scott, uh, calderwoodsearch.com or just give me a call. 403-800-6651. I love to meet new people and even if you're just looking for some advice or you want to pick my brain about the market, you're not ready to do anything. I'm happy to engage. I really enjoy helping people. I'm a relationship guy and I, uh, invest time into those types of relationships and hopefully I'll be top of mind when the time is right.

Maureen Farmer: That's awesome. Scott. Thank you so much for joining the Get Hired Up Podcast.

Scott Calderwood: Thank you for having me. I appreciate it.

Maureen Farmer: Thank you so much for joining us for this episode of the Get Hired up podcast. If you enjoyed today's conversation, please take a quick moment to subscribe, rate and review us on your favorite platform. It helps us to grow this community. Westgate is the founder led firm behind this podcast and it's sole sponsor, bringing more than a decade of work with CEOs, board directors and private equity backed leaders navigating complex transitions. I'm Maureen Farmer, founder and host of uh, the Get Hired up podcast. Thank you for being a part of our journey and here's to getting Hired up. This podcast is dedicated to the memory of my dad, Stuart Raven. This is for you dad.

Mattie Sheares: Thanks for listening to Get Hired up with Maureen Farmer. If you enjoyed the show today, please tell a friend and leave a review for us on itunes, Spotify or wherever you listen for customized resources to help you get hired up to your next C level position, win a paid board seat or attract a new investor. Visit westgatebranding. Com.