Executives jumping ship: Is HR helpless to stop it?

by Cameron Edmond14 Aug 2013

As the function of executive search grows, more and more high-ranking employees are looking at moving on, even if they seem loyal and are well-paid.

A study from US-based National Bureau of Economic Research (NBER), Who says yes when the headhunter calls? Understanding executive job search behavior, analysed why the executive of today is more likely to say yes to new job offers.

NBER cited the ‘Multi-Armed Bandit problem’ as the primary driver in this behaviour. In many contemporary executive roles, chances to grow and advance are uncertain, which places current employment on the same level as new opportunities in the eyes of many executives. While taking on another position may not result in better chances of advancement, it still signifies a movement in the individual’s career, as opposed to standing still.

As such, many executives lean towards taking the gamble. What adds to this is the general way in which executive search functions. Often, the employee will not inquire about an offer, but be approached by the searcher. They also may need to agree to entering the interview/negotiation phase before many details of the opportunity are revealed.

“As a result, their decision addresses concerns about establishing causation: those more inclined to say yes are not necessarily already searching, and the nature of the opportunity cannot be driving the outcome because it is not yet known,” the paper stated.

What is most interesting is the lack of conclusion on how to prevent the movement of employers. While higher compensation appears to stop some executives from jumping ship, many executives are already in high-ranking positions and paid well, but will still consider moving. The gamble of jumping into a new position that may be more rewarding– and perhaps a desire to negotiate the contract – heavily impacts the decision of the executive.

 

What do you think of these findings? Is loyalty dead, or should employers be offering more chances for advancement to their executives?

 

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