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- 2 Aug 2010

Exploiting risk, change & creativity

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Two leading headhunters and Luxury Society members, Moira Benigson and Maxine Martens, share insights on how luxury companies need to adapt their recruitment strategies.

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Seek candidates from outside luxury and take calculated recruitment risks

After technology, it should come as no surprise that globalisation and the economy are still two of the most dynamic forces shaping HR in the luxury industry. When the mushrooming workforce across booming markets converges with new consumer attitudes about luxury goods, it can be quite an eye-opener for recruitment

“We had a luxury search in Asia and one of the candidates came from P&G,” recalls Martens & Heads CEO, Maxine Martens. “I asked her why she would be right and she said, because now luxury is a commodity too.”

“Today luxury monogrammed goods have the same problem as soap powder — how to differentiate themselves. Luxury firms need people who are going to come in and challenge some of the assumptions behind the relationships they are building with the consumer.”

Despite efforts made by many recruiters in recent years to widen the search for high-level management and executive candidates from other industries, luxury firms tend not to be very inclusive of outsiders in the final cut.

Moira Benigson, managing partner of MBS Group, believes that this has worsened since the crisis. “I think people are now even more risk averse than before so they want to hire as close to the brief as possible which makes it very difficult,” she says. “There is no room for creativity in the search.”

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I think people are now even more risk averse than before so they want to hire as close to the brief as possible which makes it very difficult. 

But at a time of immense market upheaval and paradigm change, the temptation to play it safe with insiders might deny firms the opportunity to harness game-changing strategies brought in by people from the outside. More than one HR professional interviewed for this report described the culture behind luxury recruitment as “too incestuous” and, at times, potentially counter-productive.

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Hire more locals in emerging markets, and bring more emerging market professionals to HQ

This insular mentality crops up elsewhere in luxury HR too. Although Martens concedes that despatching expats to places like China is often the only realistic option, she wonders if the strategy behind “colonizing” emerging markets isn’t sometimes too formulaic.

“I’ve been working 40 years and nothing has changed,” she says. “The first thing is using expatriates because they bring the company’s missionary message. The smart companies challenge that person to build a local team. But if you were to look at the top executives of most of the global brands, not more than 15% of the actual operating CEOs are local.”

If a company’s motivation is not diversity or geographical parity, then Martens suggests there is at least a compelling commercial incentive for filling the higher echelons with more locals who truly understand their market. “How many French luxury firms that do 30% of their business in Asia have 30% of their top management from Asia?”

According to Benigson, even when expats are the only answer to an executive position, recruiters have begun to confront other complications in the search. With clients in once booming markets like Russia and the Middle East now cutting back due to recent contractions, the prospect of moving to these regions has become less appealing to candidates. Not only is the working environment more challenging there, but the job specs are often less attractive than they were in the past.

“We do have two big assignments now in the Middle East and they are both pretty luxurious. One is for a marketing director there. But where last year the marketing budget assigned to that position was $15 million, this year it is only $5 million.”

For recruitment in the less well-developed boom markets, it is difficult to persuade candidates to consider the lifestyle change, she says. “It’s highly unlikely that someone working in Louis Vuitton is going to [leave to] go to India.”

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Employ creative techniques for finding, attracting and retaining Gen Y employees

Back in mature markets, Benigson also sees an imminent clash over the increased demands placed on people working in luxury and filling positions on the ground.

“They want people to do more, work longer hours, be more dedicated, work harder and know more,” she says. “If you’re talking about recruiting younger people, Generation Y is not interested in that. In general, people want more of a work-life balance. Even look at luxury retail — that used to be five and a half days a week, now the shops are open all seven.”

In terms of the search process itself, professional social media sites like LinkedIn are fast becoming a complementary resource for proprietary recruitment systems, off-the-shelf software and company databases.

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If you were to look at the top executives of most of the global brands, not more than 15% of the actual operating CEOs are local. 

“Recently we were looking for ex-Gap employees,” says Martens. “On our own database, we can see every one of the 40,000 people who ever worked for the Gap at any time that we know about. Then there will be three people who are in the right category and we can go and look at them again on LinkedIn. But what is interesting is that, between just those three people, they had 4900 connections, 90% of whom were ex-Gap people. So social networking sites are very useful.”

Indeed, our recent survey confirmed that more than 60% of luxury industry professionals are very or extremely likely to actively use tools like Facebook, LinkedIn and Luxury Society to find a job and more than half are very or extremely likely to use an employer’s website in their job search.

Benigson says she too uses social media sites for research, but stressed that in her field, “you need to do more than just put a bum on a seat,” explaining that the expertise in executive search firms comes from recruiting with succession planning in mind, as well as balancing teams and analysing the impact of a candidate on the entire business.

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