Recruitment of Star

Stephen Connor, director of research at the New York investment-banking firm of Rubin,
Stern, and Hertz (RSH), has to cover the senior research analyst position for semiconductor
industry. This is because the only and star analyst, Peter Thompson, recently resigned and
accepted an offer from one of RSH’s competitors. An upcoming deal with PowerChip
Company raises the urgency for the decision. The reasons for resignation are not explicit.

Basically he has two options: First, confirming the promotion to senior analyst of Peters
junior analyst Rina Shea, which means assigning her to covering PowerChip and the rest of
the semiconductor industry. His second option is to recruit and hiring a senior analyst from
outside RSH. Using the services of a headhunter, Stephen is assessing four different
candidates. All of them have pros and cons, but in different aspects and no one seems to fit
perfectly to be considered as the ideal person to hire.

An organization’s culture should be considered one of its strongest attributes, at RSH this
was certainly the case. In fact: “Many considered RSH’s culture one of its prime competitive
advantages. Teamwork led to superior company coverage. As an additional incentive to
teamwork, the director of research tied analysts’ bonuses not only to individual success but
also to the success of the group”.

Clearly, investment banking can be a highly competitive business especially with bonuses
tied directly with an employee’s productivity. RSH was able to bridge the competitive gap by
fostering a team environment instead of what could be a highly autonomous workplace.
RSH also fostered mentorships between senior and junior level analysts so their employees
were able to develop their careers and grow within the organization. Ultimately this led to
very low turnover at RSH and incredible organizational loyalty; however “the turnover rate
was so low that it stung when anyone resigned”. Low turnover can indicate general
employee job satisfaction, but with low turnover also comes lack of experience with
recruitment and selection. In this case, the extremely low turnover led to a lack of
replacement and succession planning at RSH and general panic whenever anyone resigned
unexpectedly.

According to Staffing Organizations, “Replacement and succession planning focuses on

identifying individual employees who will be considered for promotion, along with thorough
assessment of their current capabilities and deficiencies, coupled with training and
development plans to erase any deficiencies”. Although replacement and succession
planning did not seem to be a top priority for RSH, Stephen Connor was able to temporarily
replace Peter Thompson with Rina Shea (Peter Thompson’s junior analyst) while he
conducted the search. This allowed Stephen Connor to conduct his search without having to
panic about the upcoming deal with the PowerChip Company. Officially, Stephen Connor
promoted Rina Shea to senior analyst but was unsure whether he would allow her to
continue as the senior semi-conductor analyst, he decided he would investigate other
candidates before offering her the position as the sole senior semi-conductor analyst. If
Stephen Connor decided to offer the position to someone else he would simply “give her
some smaller technology industry”.

After Stephen Connor stabilized conditions by appointing Rina Shea he immediately

contacted an external recruiter or “head hunter” to see if there were any “star analysts”
looking to move. A senior semiconductor analyst is a highly technical position that is very
competitive, rankings of these analysts are published in the Institutional Investor (II)
magazine – if an analyst is not ranked in this magazine they are not considered “star
analysts”. The rankings are based upon institutional client’s rankings on an analyst’s,
“earnings forecasts, industry knowledge, overall service, accessibility and responsiveness,
stock selection, and written reports”. Peter Thompson ranked third on a list of fifty analysts
in Institutional Investor (II) magazine. Although this magazine provides a short list of fifty
potential candidates Stephen Connor felt he did not have the time to conduct a search
himself, and he did not want to start making calls. Stephen Connor felt the calls would
spread all over Wall Street that RSH was searching for a new senior semi-conductor analyst
months before the PowerChip Company deadline. Using a recruiter in this case was a way to
save Stephen Connor time, and prevent any rumors about RSH. Apparently, Stephen Connor
had used this recruiter before because Craig Robertson’s number (who worked for Triple S
recruiting) was on his speed dial. This indicates that RSH was completely dependent on
outsourced recruitment offices to fill at least their senior level positions. According to
Heneman et al. “Outsourcing decisions require consideration of organizational strategy, size,
and the skills required”. Therefore outsourcing should not be considered in all situations.
Due to the large size of RSH it was interesting that there was no mention of human
resources during this case, as it would be an accurate assumption that there would be a
human resources department for a firm the size of RSH. Clearly, an in-house recruitment
could have been considered if human resources were notified due to the core organization
competencies that Peter Thompson served, and the specific attributes Stephen Connor
outlined. However, since Stephen Connor was on a constricted timeline due to lack of
replacement and succession planning, an outsourced recruitment office became in his eyes
the only option.

After checking in with the recruiter and scheduling a meeting to discuss the qualities
Stephen Connor was looking for in a “star analyst,” he contacted a trusted work colleague
and “star telecommunications analyst” Tom Walters to seek advice and test the reaction to
Peter Thompson’s resignation. During this conversation the point is made that “a couple of
months ago Peter Thompson was thinking of resigning and you must know by now that he
has given notice. I considered countering for a while, but simply didn’t think it was a good
idea”. Stephen Connor had no contingency plan in place a few months ago even though it
was relatively well known that Peter Thompson was considering resigning from RSH. Yet
another indication that replacement and succession planning is not a part of RSH.
After the initial phone conversation with Craig Robertson, Stephen Connor met with Craig
Robertson to outline the necessary skills and qualifications for the senior semi-conductor
analyst position. Craig Robertson asked Stephen Connor to outline Peter Thompson’s best
and worst qualities in order to seek out the best fit. Peter Thompson’s faults included being
over competitive, doing anything to get ahead, and money being his sole motivator.
However, Peter Thompson’s attributes included, incredibly intelligent, superior analytical
skills, go-getter, taking on additional projects, industry knowledge, good writer, client
oriented, and access to upper management at companies. Overall, Peter Thompson
possessed the hard skills to be successful but was lacking in soft skills especially with his co-
workers to be successful. RSH above all wanted a team oriented employee, and Peter
Thompson was not team oriented. Stephen Connor’s final remarks to Craig Robertson were:

“I’m going to give you fairly free range on this one, Craig. If you can scrounge up two or
three highly ranked stars, I’ll be extremely pleased. But search your pool of regional firms
and local boutiques as well. And if there’s an up-and-comer out there, I’d like to see his or
her résumé. A rising analyst could improve a lot on our platform, but he or she would have
to have the right ingredients already”.

After this final conversation Craig Robertson was able to successfully identify three viable
candidates for the position. While Seth Horkum approached RSH with his own recruiter,
Rina Shea must also be considered a candidate as Stephen Connor offered Rina Shea an
unofficial promise of the semiconductor position if no one else was more qualified than she.
All of the candidates have experience as analysts in the semiconductor industry and
advanced degrees all from Ivy League institutions. Clearly, they could all perform the job,
but the question becomes who is the best match for the position and organization. After
reviewing the interviews and background information about each candidate, it is clear that
Gerald Buam should not be considered for the senior analyst semiconductor position.

Although, Gerald Baum has only been in the semiconductor industry for 18 months and
risen to eleventh place in Institutional Investor (II) magazine he does not exhibit the soft
skills necessary to become a productive member of RSH. Gerald Baum is clearly an
autonomous analyst; he does not value team work and is mainly drive by competition and
monetary compensation. He even had the gall to arrive late to the interview offering no
apology, ask about compensation upfront, and shows absolutely no loyalty towards RSH,
whenever the next best offer came along, Gerald Baum would leave RSH. He may be
wonderful with clients and produce viable results, but he is a liability due to his cavalier
attitude and documented lack of cooperation with other staff members (firing one of his
junior analysts during a client presentation). Gerald Baum would be a terrible fit at RSH due
to its team oriented culture; Gerald Baum’s should remain at his own competitive firm Gotz
& Loeb. Almost the exact opposite of Gerald Baum is Seth Horkum.

Seth Horkum has been with the same Wall Street Firm, Jefferson Brothers for over 15 years
and is an extremely loyal analyst. He pursued Stephen Connor because he felt he had
reached a point in his career where he could no longer grow at Jefferson Brothers. Since he
had been with the organization since the beginning of his career, he felt they would never
recognize him as a star no matter how many extra projects he acquired, catered to clients
by agreeing to last minute travel or how high his ranking was in Institutional Investor (II)
magazine. Seth Horkum was ranked 5th and had been ranked as a runner up but had
received no recognition at Jefferson Brothers. However, Craig Robertson did not identify
him during his recruiting process as a viable candidate for RSH, even though he was ranked
higher than Sonia Meetha in Institutional Investor (II) magazine. Seth Horkum seemed to be
habitually overlooked even though he had true star analyst potential. Although Seth
Horkum comes from a firm that is known for autonomy, he was responsive to working in a
team oriented environment. Seth Horkum would take some time to adjust after being with
the same firm for over 15 years to the team oriented culture at RSH, but he has the work
ethic, commitment and is noted as brilliant stock picker (one of the preferred qualifications)
which could make him successful.

Sonia Meetha is from a small firm or a boutique, but is trying to make the transition to a
larger firm. Originally from a larger California firm, she transitioned to the East Coast and
accepted a position at WHS. She has over 15 years of experience as a technology analyst,
and has been with WHS for 5 years but is ready to transition to Wall Street. Even though she
is from a small firm in Connecticut, she is ranked 8th in Institutional Investor (II) magazine.
She has the potential to make big changes at RSH by implementing a global initiative that
she successfully did at WHS a great feat for such a small firm. Sonia Meetha was by far the
best prepared for the interview by bringing pointed questions and inquiring about projects
she was familiar with at RSH. She was especially interested in working with other upper level
female analyst, and was excited to hear about the team oriented environment at RSH. Sonia
Meetha also discussed telecommuting options, but Stephen Connor emphasized that being
onsite at RSH was important for this position, but that RSH may be able to accommodate.
Stephen Connor seemed to be overly worried that Sonia Meetha had a family and would not
be able to balance the workload; this should not have even been thought of because she
has made her way at WHS and this was not suggested of any of the men who have children.
Sonia Meetha would be at a disadvantage at first due to her lack of contacts on Wall Street,
and inquired about assistance from other senior analysts during her first few months.
Although Sonia Meetha has the potential to make great changes at RSH through global
initiatives, she does not meet the preferred qualification of being able to “hit the ground
running.”

Rina Shea has already been doing the senior semiconductor analyst position in Peter
Thompsons absence for a few months. As Stephen Connor notes that while the
semiconductor department has stabilized he has received mixed reviews about Rina Shea’s
work at RSH. Some note that she needs to be more assertive, while others believe she is
knowledgeable and capable of doing the job. Unfortunately, not being assertive enough or
being too assertive is often attributed to women in the workforce therefore I would not buy
into this colleagues analysis. Although Rina Shea is doing the job, she is still relying on other
senior analysts for assistance. This is the main reason why Stephen Connor should consider
other candidates for the position. However, Stephen Connor should have given Rina Shea
the opportunity to interview as well so he could accurately compare her to other candidates
instead of just assessing her from afar and receiving feedback from colleagues (who may
have their own motives as well). In comparison to the other candidates Rina Shea does fall
short, mainly because of her lack of years as an analyst. Rina Shea is an up and comer, but
she should be reassigned to a smaller industry as Stephen Connor suggested.

David Hughes is already a star analyst. He has over 30 years of experience as a

semiconductor analyst. He is ranked 2nd in the Institutional Investor (II) magazine this year
and has been ranked 1st four times in his career along with other consecutive rankings.
David Hughes could definitely fulfill the preferred qualification of “hitting the ground
running.” However, the chatter on Wall Street is that he is winding down, but Stephen
Connor expressed interest in hiring a well-established star with well-established contacts on
Wall Street all which David Hughes exemplifies. David Hughes also expressed that he would
be willing to train junior analyst and pass on his wealth of knowledge, particularly meeting
the needs of the development program Stephen Connor is establishing at RSH. David
Hughes meets all the required and preferred qualifications, although some question his age
that should not be a consideration during the hiring process. David Hughes is by far the
most qualified candidate with the potential to train other staff members at RSH to have the
same capabilities.

There were many issues with the recruitment and selection process for the senior
semiconductor analyst position at RSH, however in the end viable candidates were
interviewed and could be selected for the position. First, the recruitment process could have
been on a better timeline if proper succession and replacement planning were implemented
at RSH. An exit interview should have been conducted with human resources, and it might
have shed some light on the reasons why Peter Thompson decided to resign. Also, Stephen
Connor needs to learn to “slow it down” according to “Finding the Right 1,” Nicholas Dunlap
suggests that “smart employers are slowing down the hiring process and incorporating
additional members of the management team to help interview and uncover whether or not
a particular candidate best fits the company’s culture”. Stephen Connor did not have
meetings with any upper management, other than his work colleague via phone, he only
consulted the recruiter for the most part. Even if turnover was extremely low, panic should
not be the first response when someone resigns or retires.

Second, the recruitment process could have remained in house if Stephen Connor would
have thought to contact human resources. Outsourcing recruitment is costly and it could be
extremely beneficial for RSH to have their own recruiting department as a part of human
resources on staff. Outsourcing recruiting is usually the most beneficial for smaller
organizations that do not have robust human resources department. Maybe a job
description would have been created for the position rather than simply telling Craig
Robertson your thoughts on what Stephen Connor did and did not like about Peter
Thompson. Also, if you are recruiting using an in-house team you have more access to the
recruiters and are able to provide more feedback. It is possible that Stephen Connor did not
want to use in-house recruiters because he did not want news to spread that RSH was
without a semiconductor analyst months before the PowerChip company project, but as
Tom Walter’s said “News travels fast here, Stephen”. Also, Craig Robertson did not even
identify Seth Horkum as a candidate even though he was ranked 5 th in Institutional Investor
(II) higher than both Gerald Baum and Sonia Meetha.

Third, the selection process should have been more standardized and less casual. Although
this is an upper level position and certain qualifications are assumed, Stephen Connor’s
interviewing capabilities were abysmal. He never gave Rina Shea the opportunity to
interview at all, denying her right to fair consideration. The questions he asked were vague
and catered towards each of the candidates, none of the candidates were asked the same
questions. Meaning the interviews was unfair and completely reliant on the candidate to do
the majority of the talking. Stephen Connor was so ill prepared for David Hughes’ interview
he noted to himself that he felt like he was being interviewed by David. Also, the selection
process could have greatly benefitted from panel interviews, so it was not just on one
person’s shoulders to make the decision, and then there would be a variety of perspectives
on the candidates instead of just Stephen Connors perspective. Bringing the candidates in
for a day at RSH was a great idea, but unfortunately he only sought feedback from word of
mouth, he did not have his staff fill out evaluation forms, or have them ask standard
questions of the candidates. Basically, he just set the candidates lose at RSH, other than
Sonia Meetha who requested to have a meeting with other female senior analysts. Stephen
Connor himself did not have a ranking system in place for himself either, he simply reflected
to himself after the interviews.

At the end of the case study, Stephen Connor still had yet to make a decision because he did
not have the above practices in place. However, after gathering the information from the
recruiters and the interviews on each candidate I would suggest the hiring of David Hughes.
David Hughes is already a noted “star analyst” and brings over 30 years of knowledge to RSH
which he could pass on to other RSH analysts as well making RSH more secure in the future.
David Hughes exceeds both the required and preferred qualifications therefore, he should
be selected. Although, the other candidates had great potential and could make changes at
RSH like global initiatives, David Hughes is the best fit for the position at this point with a
large upcoming project with PowerChip.