Global search for new boss

Searching for talent to fill the country's top jobs often involves an international headhunt, but we could look closer to home first, says an industry expert.

One of the most prominent vacancies right now is at Air New Zealand, following chief executive Ralph Norris' decision last month to leave. Tim Kernahan, a director at executive recruitment firm Swann International, says when the head of a company resigns the first thing its board needs to do is identify the key issues the new chief executive will face.

"The new chief executive of any company may have different challenges than the person they are replacing," he says.

"But finding a replacement to head a top New Zealand company does not always result in an international search."

He says internal candidates should always be considered and compares the situation to that of a school when the deputy is passed over.

"Being an internal candidate for an executive job is like being the deputy head of a school when the head teacher leaves," he says.

"Everyone is used to seeing the deputy in a certain way and can't imagine them running the school. So the board selects a head from elsewhere and then the deputy resigns and becomes a good head teacher at another school."

Kernahan says Air NZ will almost certainly search internationally for Norris' successor, perhaps starting in Australia, but also looking in the United States and Europe.

And he says industry experience is not always top of the list for recruiting a chief executive.

" Ultimately I believe that the requirements can be distilled down to a couple of specific things. Sometimes it is essential that you have a person with a particular background, other times you may need particular qualities."

Kernahan cites Louis V. Gerstner, the chairman of IBM from 1993 to 2002. Before joining IBM, Gerstner was chairman and chief executive of cookie and snack firm Nabisco, a company whose core products are far removed from computers.

"He became one of the most successful chief executives of IBM but he had no background in computers," Kernahan says.

"He joined the firm at a time when it had failed to recognise the significance of companies moving away from mainframe computers to providing staff with PCs. IBM was struggling and needed a particular type of person to fix the problem."

Kernahan says that, generally, attracting talent to New Zealand can be problematic because of our location and size, but that those two factors can also work in our favour if candidates are seeking a different lifestyle.

"Being small and remote are fairly significant disadvantages [to recruitment].

"It is hard to offer the scale [of the operation] that some very ambitious chief executives may want to work here."

Bede Ashby, managing director at recruitment firm Momentum, shares that view. He says being a big fish in a small pond and being in such a remote location means that attracting the best people takes longer.

"But it can be done," he says. "A lot of people don't like to get out of the mainstream. They see New Zealand as a bit of a backwater, people don't come here for the salary package - it's a lifestyle choice.

"International firms see New Zealand as a good training ground, especially for Australian companies. In a national sense, once you've run a big company here, where do you go?

"The problem with New Zealand is that we don't have enough industries of a similar type. There's not much room to jump into other areas."

Kernahan says companies need to take a broad-brush approach to executive recruitment.

"Companies would look at all relevant organisations where they are likely to find a really good person. Expat Kiwis, perhaps those in Asia, are the most significant group when searching offshore because they know the country and there are no [cultural] shocks for them when they arrive to work here.

"They are also familiar with the levels of remuneration we have here and generally speaking are prepared to accept those," he says.

"Because of the size of the United States and the large companies that operate there you have to be very sure you are going to attract the right person for the job you want to offer.

"People who say, 'If you want to headhunt me out of the States you will have to pay X million dollars a year', are probably not the best candidates.

"If you find someone wanting to move here for big bucks then you are on a loser - their reason for wanting the job is an important consideration for hirers and it must be more than just money that motivates them - even those who have been approached.

"There are plenty of people who know New Zealand and whose main driver is not money. They say they'd like to work here and, in a New Zealand context, want to come and do a good job.

"In general terms, people in their early 40s may be thinking very hard about our lifestyle, particularly if they have a family, want to get out of the rat race and want a significant business challenge."

Ashby says there is always someone out there who will come to run our companies.

"New Zealand is an attractive place," he says. "You play on the fear factor of terrorism - which is a terrible thing to do - the lifestyle opportunities, the First-World attitude that we have.

"Some headhunters may say it is difficult, it probably is a bit ... you wouldn't come down here to be a hotshot."

Technology is also playing a bigger part in international recruitment. More than ever, recruiting from overseas involves videoconferencing for initial interviews - the days of jetting around the world to meet prospects are all but over, Kernahan says.

Psychometric testing is also being used increasingly in recruiting high-flyers and Kernahan says most companies ask to have this type of testing done before a formal job offer is made.

"It has to be approached with a lot of sensitivity because of the dynamics of headhunting someone," he says, and it's different compared with asking someone who has already applied for a job to sit a test.

However, Kernahan says he would never make an employment decision based on psychometric testing alone.

"Part of the recruitment process includes having someone carry out reference checks and solid interviews.

"In my experience, a preferred candidate would not be passed over because of the results of a psychometric test.

"If you have interviewed someone thoroughly, and have really got to know that person, you should be worried about your interviewing skills if the test did not confirm what you already knew."