THE RESULTS

Integré Partners recently conducted a survey, asking thousands of Private Equity, Venture Capital and M&A professionals to share their thoughts regarding hiring practices in a recessionary period.

SUMMARY

- Recessions do not appear to impact leadership changes, but do precipitate more changing out of other management.

- Only a third of portfolio companies have invoked hiring freezes.

- More than half of respondents felt hiring restrictions would persist into 2010.

- Most respondents are still making executive hiring decisions based on a static functional basis rather than using a dynamic leadership model.

THE SPECIFIC RESULTS

52% of respondents felt they would be MORE likely to make a leadership change in a recession, with 48% LESS apt to make such a change in a portfolio company. However, 76% felt they would be MORE likely to change other management personnel during a downturn.

For those who felt more inclined to a change, there was little difference in their ranking of possible reasons:

     2.2 - Need for Different Skills
     2.4 - Cost Savings
     2.8 - Drive Change in Culture
     2.9 - Board Pressure

Those who were disinclined to make a change, cited the following:

     2.1 - Postpone Leadership Change Disruptions
     2.4 - Send a Strong Cost Control Message
     3.0 - Save Recruiting Expense

Only 36% of the respondents had total hiring freezes in place, with 55% feeling they would not be lifted until sometime in 2010.

Survey participants were asked to choose the top factors they would look for when hiring a leader in a recession from a list of thirty-four factors studied over many years by Marcus Buckingham and Donald Clifton as published in Now, Discover Your Strengths, which we at Integré Partners use as a selection aid. The eight strengths continuously correlated with executive success (regardless of the business cycle) are listed below along with the top eight form the survey results:

Of those strengths favored by the respondents, the majority (aside from strategic nature and arranger/orchestrator) are primarily skills that are applied to the execution of management functions. Research has shown that leadership is dynamic and requires a person of strong ego (self-assurance) who wants to win passionately (competitive nature) and has the personality that creates followership (command presence). The most effective leaders are almost always those who consistently develop the people around them, maximizing their ability to contribute, while simultaneously enhancing the effectiveness of the organization by balancing a host of strategic and tactical elements (arranger/orchestrator).

THE SAMPLE