Recruitment of a Star

Case Analysis: RECRUITMENT OF A STAR

Problem Statement: Which candidate should Stephen Connor, the director of research at RSH, select from the given pool of prospective candidates to replace the position of Peter Thompson, the star semi-conductor analyst, who had submitted his resignation.

External Analysis: Factors

Political

Economic

Factors as in the case

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Institutional ranking

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The cyclical growth patterns in the semiconductor industry The highest-profile personnel have been shuffling firms lately The industry is presently going through a boom phase

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 Socio-Cultural

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Technological

 

Legal

Impact

 

Environmental

Internal Analysis

Investor(II)

magazine

The industry average retirement age was approximately 45 to 50 The Analyst job profile required a lot of travelling and cordial relationship with sales team and clients. Strong corporate culture in research divisions Tech intensive research and development departments/firms/industry

Star ranked analysts have a better market recognition and earn significantly higher compensation than others. Firms that have “Star” senior analysts working for them had higher credibility in the market which increased the overall business opportunities. The semiconductor business had been cyclical from the beginning, with constant rise and fall in growth patterns. There was a lot of unwillingness or/and abrupt changes in the senior level designations in the industry. The industry is presently going through a boom phase and so, there is a huge demand for prospective star performers and better investment opportunities. The industry demanded that an analyst should be tech savvy and ready to travel. The need to maintain cordial relationship with clients and sales team required a younger or well-seasoned personnel. A strong corporate culture and support system in a firm was a competitive advantage in the industry. State-of-the-art technology for research, and dedicated technically proficient staff made the difference in the industry. Timely and appropriate query redressal of clients and sales teams using various technological media was of upmost importance in the industry.

Prompt and apt response to clients’ needs and queries through email and other media. Technical expertise High chances of law suits in Customer centric, highly competitive and research intensive industry was liable to many investment banking industry

N.A

law suits. Employees have to be technically proficient and extra careful to avoid unwanted legal actions. N.A

Industry’s perspective SWOT Strength

Weakness

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Research intensive and usage of state-of-the-art technology Presence of star rated analysts and prospective upcomers

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Opportunity 

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The highest-profile personnel have been shuffling firms lately The industry average retirement age was approximately 45 to 50

Threats 

The industry is presently going through a boom phase, so better growth opportunities

Cyclical economic growth patterns

RSH’s perspective SWOT: Strength

Weakness

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Only one senior semiconductor analyst

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No proper succession planning policies

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Little support from top management for development-and-training programmes

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Difference in point of view between John and Stephen

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Iconic brand name, hence global reach Follow a team oriented approach and encourage teamwork Low turnover rate ‘Family-like’ working atmosphere Good support staff Numerous well-trained juniors and dedicated administrative staff Known for women empowerment Flexibility in employee travel scheduling Dedicated to producing high quality research Commitment to global work Formal training programs, employee engagement and mentorship Daily and regular team briefings

Opportunity   

Big deal coming up with Power Chip Company The industry is presently going through a boom phase, so better growth opportunities for RSH Consistently high rating in II magazine.

Peter’s perspective SWOT:

Threats  

Competition from other established firms Cyclical economic growth patterns

Strength  Star analyst  Incredibly intelligent  Superior analytical skills  Achiever-Go getter-proactive  Workaholic-precision work  In depth industry knowledge  Good stock-picker and writer

Weakness  Lone worker  Extremely competitive  Made others uncomfortable  Motivated by money  Shenanigans

Opportunity

Threats

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II star rating gave him better career opportunities elsewhere Access to top clients and upper management

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People started distancing themselves from him

David Hughes’ perspective SWOT: Strength

Weakness

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Good credentials (High rank) Highly recommended, ranked 2 in II Well-seasoned Razor-sharp mind Punctual Vast Industrial contacts and knowledge Team player and an excellent mentor Celebrity/Legend in Wall Street

Opportunity   

Might be able to attract more top notch clients Mentoring junior analysts Willing to take up work challenges

Gerald Baum’s perspective SWOT:

Aged Travelling will be a problem Not tech savvy Relies heavily on assistants Prefers family to work Requires a contract guaranteeing compensation for at least 2 years

Threats 

Stiff competition from other firm’s younger counterparts

Strength

Weakness

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Ranked 11th within 18 months of joining as per II. Extremely intelligent Pleasant young man Maintains active travel schedules and replies promptly Highly enthusiastic for research Work experience in Sales department

Opportunity 

High chances of moving up the II ranking

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Uncanny native sense when it comes to stockpicking Compensation centric working style

Threats  

At times cocky History of jumping companies

Sonia Meetha’s perspective SWOT: Strength

Weakness

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Mentioned by II as an ‘Up-and-comer’ 8th rank in II In depth industry knowledge Good communication skills Tech-savvy and long term industry vision Punctual

Opportunity   

High chances of moving up the II ranking Her use of financial models provides clients with better insight Seeking a lucrative job offer

Seth Horkum’s perspective SWOT:

Inexperienced when it comes to working with big firms

Threats  

Mother of two small children, hence travelling might be a huge problem Inflexibility of scheduling

Strength

Weakness

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Ranked 5th by II Brilliant stock-picker Highly enthusiastic for research Congenial personality Impressive quality of work

Opportunity 

RSH Sales team can promote his product

Always eager to please

Threats 

Other employees might take advantage of his personality

Rina Shea’s perspective SWOT: Strength

Weakness

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Hard working Strong interest for Semiconductor field Three years work experience at RSH Highly qualified Business savvy

Opportunity  

Promotion opportunity Fully up to date on Powerchip project

Inexperienced in Senior analyst profile Less preferred by Head of Sales and Trading director of research

Threats 

Suitable candidate filling up the Senior analyst post at RSH

Factors: 

Organizational commitment and ability to work effectively with Sales force, traders and buy side helps to

effectively understand the client’s needs and work efficiently.

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Willingness to work in teams and mentor junior analysts goes a long way in the growth of the firm. Proactive mentality helps to take on additional projects. Technical expertise helps to tap the industry growth sectors properly and attract prospective clients. Industry knowledge is of upmost importance for picking stock and writing proper reports. II rankings are the benchmarks that showcase the talent and worth of any analyst. Client oriented approach and customer centric focus is a key to future growth opportunities. Stock selection differentiates a true star analyst from the rest. Willingness to travel and meeting up with clients, sales and buyer teams regularly was a part of the job. Industry connections and contacts have a big impact on the firm’s trading commission revenue. Writing reports is an integral part of the job description. Punctuality was a trait that Spencer truly valued, as the job profile required traveling and meeting up with clients and sales and buyer teams regularly.

Key Factors: Critical Factors

David Hughes

Gerald Baum

Sonia Meetha

Seth Horkum

Rina Shea

2

11

8

5

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Technical expertise

Very High

High

High

High

Low

Organizational commitment

Moderate

Low

High

High

High

Contacts in the Industry

Very High

High

High

High

Low

Moderate

High

Low

High

Moderate

Moderate

Low

High

Moderate

High

High High

High High

Very High Moderate

High High

Moderate Moderate

II Ranking

Willingness to travel Willingness to work in teams and guide junior analysts Writing of Reports Stock Selection

Constraints 

Shortage of time:



Stephen Connor is not given adequate time to select the right candidate for the post of Senior analyst. The upcoming Power chip proposal is an important project for RSH and thus there is not enough time to consider other options. Compatibility with Sales team and other employees: The new senior analyst should quickly jell with the Sales team and other employees to effectively function.

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The highest-profile personnel have been shuffling firms lately in the industry: The semiconductor business had been cyclical from the beginning, with constant rise and fall in growth patterns. There was a lot of unwillingness or/and abrupt changes in the senior level designations in the industry. There is thus a limited choice of prospective candidates for the post.

Options & Evaluation: 1. Selection of David Hughes: Adv.: Well-seasoned analyst and effective mentor. Vast domain knowledge and contacts will surely help RSH. Dis-adv.: His age, doubtfulness to travel, requirement of a two year guaranteed compensation

contract. 2. Selection of Gerald Baum: Adv.: Has impressive professional traits and the technical fit for the analyst profile is high. Dis-Adv.: Low dedication towards the former employer. tough boss to work under

Less interested in mentoring juniors and seems to be a

3. Selection of Sonia Meetha: Adv.: She is considered an up-and-coming analyst by II. Given the advanced R&D opportunities and contacts available at RSH, she can do wonders. Long term vision, in depth knowledge of the industry and ability to connect with clients, Dis-Adv.: Flexibility in scheduling and travelling may be a huge problem owing to her children. Inexperienced in dealing with big clients and investment bankers. 4. Selection of Seth Horkum: Adv.: RSH Sales team can promote his product and he has impressive professional and personal traits Dis-Adv.: His eagerness to please others attitude might lead to people taking advantage of him 5. Selection of Rina Shea:

Adv.: No time delay in onboarding. Already accustomed to RSH work habits and sales team. Dis-Adv.: Not acceptable to certain members of top management. Fairly inexperienced to handle senior analyst post. 6. Try to bring back Peter Thompson by some means: Adv.: Already established star analyst and familiar with RSH working environment. Dis-Adv.: Might cause uneasiness to present employees. May have to pay a huge compensation. 7. Pull data from II rankings and Greenwich Associates and search for more prospective candidates: Adv.: May have access to candidates with better credentials than those suggested by Triple S and Clifford Associates. Dis-Adv.: Shortage of time. Have to make a quick decision due to the upcoming proposal. 8. Request Triple S or Clifford Associates for more prospective candidates: Adv.: May have access to more candidates with better credentials. Dis-Adv.: Shortage of time. Have to make a quick decision due to the upcoming proposal. 9. Bring over someone from one of the buy-side firms: Adv.: Follow the same stocks as RSH analysts, perform detailed analyses, write internal reports and interact with portfolio managers regularly. Dis-Adv.: No sales-skills and industry knowledge. Unacceptable to certain RSH senior analysts. 10. Selection of David Hughes as Senior analyst and Rena Shea as deputy Senior analyst: Adv.: Using the excellent combination of Davis Hughes’ industrial expertise and reach with the assistance of Rena. Rena can effectively take care of the shortcomings that David may have like travelling and age related difficulties. In the long term, Rena is trained to takeover David’s position when he chooses to resign. Dis-adv.: Creation of a new post of deputy senior analyst for Rena and marginal increase in costs.

Recommendation Keeping in mind the best interests of the firm and professional and personal traits required as per Stephen Connor, our Group suggests Option 10, using the excellent combination of Davis Hughes’ industrial expertise, reach ans razor sharp acumen with the assistance of Rina. Rena can effectively take care of the shortcomings that David may have like travelling, technological approach and Critical Factors

David Hughes

Rina Shea

2

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Technical expertise

Very High

Low

Organizational commitment

Moderate

High

Contacts in the Industry

Very High

Low

Moderate

High

Moderate-High

High

High High

Moderate Moderate

II Ranking

Willingness to travel Willingness to work in teams and guide junior analysts Writing of Reports Stock Selection

age related difficulties. In the long term, Rina is trained to takeover David’s position when he chooses to resign. David and Rena will effectively be able to mentor junior analysts. David can guide and enable Rina to make the necessary stock pickings and report writings even if there is any Family urgency. This option would also enable Rina to enter and then climb up the II ratings. Thus in the long term, RSH would have two star analysts. This would enable better branding and growth opportunities.

On observing the above factor table, we can clearly see that the shortcomings of both the analysts are complementary. Making best use of both the analysts’ knowledge, contact, and influence can positively contribute to RSH’s long term growth. The long term benefits over weigh the cost factor of appointing two analysts.