Right at the end, when every stage has been completed (the business case discussion, the partner interviews, the psychometric test and so on) and the contract is on the table, the candidate calls to decline: openly irritated with the headhunter, citing some pretext to the client.
Candidates pulling out at every stage of the process is normal. Some decline after the first approach or never respond at all. The main reasons: they’re happy in their role and with their employer, certain places to live and work are ruled out, they’re expecting a promotion, or their personal circumstances get in the way.
The further the process has gone, the more costly a withdrawal becomes. And “application process” is often the wrong term anyway. When approaching rare talent, in ESG, AI, complex transformations or post-merger integration for example, it’s often the future employer doing more of the applying than the candidate.
The closer the withdrawal comes to signing, the more expensive it gets: search firms have already run a demanding search for specialist talent, candidates have often been through a multi-stage selection process, references have been taken and contract negotiations are often well under way. Apart from the intermediaries’ fees, the costs are usually hard to measure and disappear into the company’s overheads.
Even experienced decision-makers keep making the mistake of changing the basic hard facts, or not clarifying them early enough. Of all the criteria on a candidate’s mental checklist, three always stand out: reporting line, location and total compensation. If these aren’t checked properly at the very start, complications keep arising. Often there’s a political process going on in the background about the maximum salary the company is willing to pay. Companies changing their minds about salary or reporting line mid-process happens too. So it makes sense to raise salary expectations head-on at the first approach, to avoid disappointment later.
In private equity there’s always one more complication: existing long-term incentives. Spotting potential problems early is the intermediary’s job, even if they aren’t involved in the detail.
In a future post, we’ll look at what else shapes a process like this: the invisible players at the negotiating table, the quality of the process, and the soft facts of a company’s culture, which the company itself often sees very differently from the candidate. PE firms have to take these factors into account if they want to win top talent.
