In this episode of GlobalEdgeTalk we are joined by Ray Tomasco, who is the Managing Partner of reesmarx USA LLC (www.reesmarx.com). For over 20 years, Ray has provided insight around issues of the organization, growth and operations, and leadership to clients and senior executives.
Recognizing and adapting to the special needs of early-stage and fast-growth companies while offering suggestions for funding, partnerships, and overall hiring and retention strategies.
Listen to the episode now on all major podcasting platforms!
In this episode of GlobalEdgeTalk we are joined by Ray Tomasco, who is the Managing Partner of reesmarx USA LLC (www.reesmarx.com). For over 20 years, Ray has provided insight around issues of the organization, growth and operations, and leadership to clients and senior executives.
Recognizing and adapting to the special needs of early-stage and fast-growth companies while offering suggestions for funding, partnerships, and overall hiring and retention strategies.
Listen to the episode now on all major podcasting platforms!
Hi, this is Alex Romanovich, and welcome to GlobalEdgeTalk. Today is August 16th, 2021. We have an interesting, amazing, wonderful guest Ray Tomasco. And I will introduce him in just a second. Hi, Ray. Hi, Alex. How are you today? Excellent. Ray is a managing partner in reesmarx, but prior to that, I'll explain what this company does. We will talk about global talent search and global expansion, which is near and dear to all of us right now. Prior to that, Ray was a partner in Urgenci Atlantic, and actually, he still is. That's a firm involved with professional services and the talent search as well in the tech sector. And prior to that Ray was a founder of the Huntington Group, which he successfully sold and became a managing partner in a follow-on from CL Tomasko LLC. He was also with Hall Kinion, but the topic of today's conversation is going to be global expansion. The topic that is very, very near and dear to all of us, which is executive search and talent search. We will talk about a variety of edgy topics related to this. Ray, welcome to our studio. Thank you, Alex. Looking forward to it. The first question I have is, and that's really more of a conversation, after the 2020 pandemic, and actually, we're still kind of in the middle of it with some states spiking, some doing well and some countries still having issues, and some countries doing well, but some predicted a complete move away from global expansion and global supply chain. And yet the free flow of goods and services remained intact. As a matter of fact, the area of logistics is thriving right now. After 2020 into 2021, the economic pressures have meant so many different things for the enterprises. They are becoming smarter right now. They're becoming more strategic about how their businesses are distributed, and the products are distributed. We're seeing quite the opposite. We're seeing more growth into the expansion and we're seeing some interesting trends. What can you tell us about that? It's interesting, Alex, as our clients are all growing and people are looking at new markets, and I think that's a change in behavior. If you didn't make the change before the pandemic and didn't make it during the pandemic, you have to keep on looking at different areas for distribution. I've heard horror stories on some of our clients getting containers in, getting a product in, but they found a solution around it. One of our clients was talking that they can't offer certain products because they can't get them, but they found other products. That's the diversity of production that you need. I think people are also looking at vulnerability. So are you vulnerable to one supply chain? It's been wonderful for our business because we're not just going into China. We have to be in India. We have to be in Europe. We have to be in Mexico. How do we diversify? You`re talking about more people in more areas of jobs, of global expansion or supply chain. I hear or read the other day that it was like 90% of executives found a new supply chain to get resilience in their supply chain. You take 90%, that's only 10% are still not doing it. They haven't gotten multiple products, or different areas to get their product into the US or Europe or Asia. I think we're on the right track. I think that's the whole idea of the pandemic too. You had to change your behavior, you had to change the way you were doing business a little bit. You can't do the same thing over and over. Yeah, it's interesting. You told me recently that about some of the situations you're working with, and the executive search projects where companies are willing to pay more for the right talent and build towards that, not just with the executives, but also the entire teams. What can you say about that? Well, I think salaries have gone up dramatically for the top talent. I think people have looked at their workforce. Some of them were bloated in the middle levels. I think you're seeing the top talent getting a little bit more, not moving as much once they find the right solution, the right place for them. People aren't looking to move as much because of the expectations they get from a hybrid workplace or working for a company that's close. But the middle talent, the middle road directors, I think there's going to be less of them going forward, but they're also going to be more qualified. There's a lot of areas that I see people staying in place, but a lot of change too, in the diversity of senior and directors and middle-level BP's staying put a little bit more. It's interesting that after the entire push towards a digital transformation and an acceleration of digital transformation in 2020, we've seen projects that were planned to be finished in three years. All of a sudden being done in six months or nine months under the umbrella of digital transformation. As a former chief marketing officer, I'm working with a lot of CMOs and CDOs, chief digital officers, head of revenue and so forth. I had a lot of conversations about what kind of skills the executives have to possess right now, the top echelon. It sounds to me like there's another skill that the executive team has to possess. And that is managing a very interesting workplace environment, which is a lot of folks are looking at the remote workplace. A lot of folks are willing to come back but on different terms. What are those skills? Are they negotiation skills? Are those team-building skills? What do you have to possess now to deal with this new phenomenon? The access of better talent - that's what we've really turned into right here. You're talking about how do I get the better talent and how do I assess it, but it's also the access. Now we have that you're not confined if we talk about San Francisco, you know, everybody goes to tech, talent goes to San Francisco. Now you've heard all the crazy stories that the salaries are absolutely absurd. Our request for some types of engineers are paying more than our executives. Because they can require that, there are so few of them out there. How do you assess the talent? Sometimes it's not the assessment of talent, but what talent can I get. We had an instance last week, clients sent over what they were looking for, and it was an engineer for a very high-tech product in the BioMed Space. $200,000 for the engineer. And we're looking at it, and we've done their executive recruiting in the past and it's getting close. We're getting close to that next level, the director level. And we told them that they can't find that person for that price. The price has gone up. They have an access to talent, but they're still going to have to pay more because everybody else has that same access now. You're spaced in Florida, in New York. It doesn't mean you have to hire anybody there. You can hire them in Tennessee. And I think everybody has moved too. I mean, the movement around this country has also helped the recruiting for us because now we have people on different time zones, that'll accept somebody from California, and that person is in New England - they'll work with them. They don't have to be on the same time zone. And that's always been our global world that reesmarx has been pushing is how to get you into that international expansion and getting them to the excitement that comes with international expansion and the diversity, and being able to get top talent. Is it in Europe, is it in Mexico? Is it in Latin America? And your prices are changing dramatically and they`re on the market need. It sounds like you have to possess as a team. You have to possess not only the digital skills and digital transformation skills, and obviously your own fundamental skills, whether it's operations or what have you. You have to have the global skills as well or come to companies like yours for help in terms of destinations, in terms of where are those pockets of global talent that are great, that are accessible. According to some kind of an optimization model, what is your approach typically when a company comes to you and says `We have a particular shortage of skill or we have a particular need`. What do you typically begin to do? We normally do an assessment. I love the stories when people come to you and they said `I want to go to India. I want to go to Costa Rica because the labor is cheaper`, but they don't think about it, and what our team does is do an assessment of what the regulatory costs are. How it's going to be associate, how are you going to be able to employ this person overseas? How are you going to be able to pay them? What are the social costs? There's four main factors why you go overseas usually. Most companies are thinking not about their employees, but the grow their customer base. That's the main reason why companies go there. Then they think about income, how we diversify ourselves. And then there's a risk to it. People always think `Oh, it's going to be easy for me to go overseas and hire people or do something`, but you're really not getting there unless you will allow us to look at the global expansion, put all the costs in. What are the social costs? What is it going to take to do technology? How are you going to get a laptop? We heard a great story in Costa Rica about what the struggle is for US company to get a formatted laptop into Costa Rica so they can give it to their new employees. That costs might overweigh the cost of hiring somebody in the US. The access to better talent- that's why people are doing it, but it's really to grow that diversity of income and diversity of staff. I always tell people `Once you say you're going overseas, you're going to improve the reputation of your company. You have a different office, you're in Canada, you're just in Canada and here's what you do - you sell software. Now that you have an office in Asia or in Singapore, you look like there's foreign investment for you`. And, Alex, you and I talked earlier, that often opens up for a midsize company in our mid market, that opens up your opportunity for more money from investments, for company looking at it. Cause you're now a more valuable company. You could be a 10 person company, but you have three or four offices, and you're expanding your revenue basis so rapidly because you're hitting other markets. Makes sense. It's a fascinating topic, actually, especially right now. We hear more of the term glocalization. With global expansion being limited in 2020, 2021 and 2022 it`s poised to explode. Of course, global expansion is one thing, but the localization, which means for companies having considerations in terms of local budgets, hiring local resources, training them, mining local laws and trends and regulatory, taxation laws and so forth. How does a company happen to this local advantages if you will be in a global company? Firstly, we hope they have realistic expectations when they're thinking about it, but you can't be, there's not one solution for that. We know that the tax laws, the legal laws, the HR laws that are all in these companies. You need a company, and in reesmarx we offer a complete solution of analytics, planning that move every step of the way and laying out those costs. We're not the total solution for you, but we can lay out what the conviction is going to be to get there. And here's what the costs are going to be. I think that companies forget about the realistic expectation of going into a new country, what their investment's going to be. And all those little pieces that you just laid out are the areas that people, when they're shocked, they've already made the decision at the executive level to go `Hey, I want to go to the Ukraine`.`I'm heading to the Ukraine. We want to open up an office there because we know labor's cheap`. And then once we start breaking it down, what the taxes are, and I can't be a tax expert, but our firm will give you an idea what it's going to be, what the cost is going to be, what the timeframe is going to be. How long do you think the person's going to be employed in the Ukraine? Do they move around a lot? Those are all the pieces that you get. Somebody in the US knows their market. And they might say `My employees last an average of three years`. Well, when they get into the Ukraine, they get into England, they get into France, all those things change. The loyalty level in some areas are better, but there's also areas that people jump from company to company. And you gotta be ready for that. Interesting trends, but sure. Let's talk about some of the other interesting trends as well. Everybody's talking about hybrid workspace. Everybody's talking about remote workforce and remote way of running business. And yet a lot of managers in some very specific sectors, financial services, for example, they're insisting on folks coming back, even in the high tech and innovation sectors, and Silicon Valley. It was a lot of movement out of Silicon Valley. For example, now the companies, wondering what is it going to take to bring folks back in. At least the management, at least some echelon of people, so they can continue, to communicate together. They can continue to manage the business together and so forth and so on. What is your prediction on how this hybrid workplace is gonna work out over the next, let's say, three to five years? The first thing is, I think, the pandemic, the last year and a half has accelerated people's focus on how they want to live their lives instead of how they want to work. We've changed dramatically. They want to fit their ideal life into the company. Now we're right to work in the United States. I think the hybrid model is here to stay, but it's going to be hard for certain people and certain companies. You said financial industry, high tech. I heard it the other day from a chief digital officer that he had to get his people back in the office. They had a set date. We need to get them back in by this date. We're going to go three days. I'm going to go four days. I'm going to go back to five. The last two weeks, what we're back, he's not going back to the office. I think it's here to stay for certain levels, but I also have a question that there's certain people that aren't going to be able to accelerate their careers like you and I have. I've been blessed to be able to go in office, go into client offices, be in, be with them. I can see how I lose some business because I'm not doing face to face. I would hate to be that mid level manager that wants to be a VP that is missing his face to face. The next side of it is what benefits are people going to get from working at home? As a recruiting firm, we had a person asked, do they pay for my home office? Now you're going to be paying for home office. That's another perk that everybody's going to want. If they're going to have a hybrid workspace what kind And I think the reason that the financial industry is trying to bring them back is because they've realized they can't have all the same technology at their home. They can't communicate the same way to make large billion dollar deals. The profit levels there work from anywhere is still going to be there, but it's going to change on who wants to accelerate and be promoted. You're going to find times that people are going to want to be home. Life changes, you and I have talked about family members that we have to take care of. Life changes when you have to do that, I want to be home. Can I be successful doing that at home? Childcare? I mean, I don't think we'll ever go back to where we were with offices, having children in those big, big spaces. Again, that means those people are going to be working a hundred percent remote. If you want to keep somebody that has childcare, the hybrid model might work, but most likely it's going to be a very scaled down hybrid model. And I think the benefits are going to change. I've had a bunch of conversations over the last month about how we're going to pay the people and how we're going to compensate them. You go to an office and you had those great meals. You and I were early on an IBM, you remember those meals that you could get, coming into you. Well, now they're going to do it for certain people in the company. What do you send to the people at home? What are you going to send them, a fruit basket? I mean, you got to send them something, they got to feel like they're part of the pizza party. I think it's here to stay, but I think people are going to look at it as where do I want to be in my life? How do I want to live my life first? And maybe I'm going to be happy being an analyst or a middle level manager. Maybe I don't need to get that next level promotion. Salaries are still going up because of the recruiting world that I'm in. Absolutely. I think it's going to be very individual in that sense.
Another trend:2020 was a stellar year for investments. And now we're seeing that 2021 been an interesting year for mergers and acquisitions type of activity, consolidation in certain markets, freelancers and folks like that going towards companies that may be acquired or acquiring companies and so forth. With this M&A activity and investment activity this almost half chaotic type of a market, where do you see the global expansion kind of fall into place here in terms of how will companies get ready in terms of integrating with other companies or maybe being the acquiring company, or what should the company do if it is acquired in terms of talent. What are your thoughts on that? I want to go back to our last question and combine these two together. Because one part of the hybrid workplace, and we've seen it already, the remote workers aren't getting the stock options. Now you got part of this, another benefit that's coming out of it. What are the perks of being in office and what are the perks of being hybrid or being a hundred percent at home? Those are one part of what we're seeing in our mid market, our small market clients. The only way to grow right now is people are requiring. We're seeing almost every one of our clients that is private merging, grabbing other pieces of other businesses, small businesses. It's amazing. Some of them are 10, 12 people, grabbing just so they can get another piece of the pie or develop a different product or a different solution, or a different service. That market is hot, and the reason it's hot is because the amount of money that's available right now. We're in a strange time, Alex. I mean, usually when things went bad, we saw the stock market crash, gas prices go up. We saw the stock market go down, everything is moving at a great pace, going up, companies are cash rich, more and more of them have more cash. And it is because they've weathered the storm. They've known how to be diversified, to make themselves more resilient on a solution. And now they can look at it instead of `Do I need to hire 50 people, but I need to know how I acquire somebody`. And that's when we usually come in on doing that integration side of it. There's always going to be that middle person to do the M&A, and we're seeing it cause most of the acquisitions are global acquisitions. If you're a US company, you're looking outside the US, like do I want to go outside the US? Do I want to put that foreign investment out there? Do I want to spend the money? Do I want to set up the entity? Why don't I just go acquire a company that's in France? Why don't I just go look at a smaller company? My investment team can do this for me. We have been touched with probably four clients over the last two years that have either expanded hiring because they were the main acquisition or they've gone the other way - they'd been acquired and everything shrinks back down. And we're looking for that out, a year or two later, when a product is done, when the acquisition is done. Let's enter the candidate space for a second. M&A activity, remote workplace, hybrid workplace, a lot of interesting trends. Some business models will never come back. What should the candidate do? Steel-level candidate, middle-management candidate, who is either being displaced because of that acquisition or is out of a job because of a consolidation, or simply wants to switch to a different lifestyle or different approach. What skills should they possess? What should they have on their resume? The rules any different than they were before. What should the candidate be mindful of? I think being displaced now is not a negative. And I guess I'm seeing, we are seeing candidates that sometimes take six, eight months off after being displaced. And that's a different mode, especially at a C level or a BP level and BP director. You don't have to do much if you have the talent. It's acceptable now. We remember the .com craze and people would jump from company to company, to company, and it was always acceptable. Then all of a sudden, we went back into our normal traditional area and it wasn't. You wanted to see that executive drive something and show success, and then move on to the next target. Now you don't have decisions. Decisions are made because of growth acquisition, and they're moving. I don't, and I think I'm going to tell you, 90% of our placements are people that are working. We're moving from one area to another. And that's because those really tough talent are not getting displaced. They're finding a spot for them. We were on a call with one of our clients and there's two CFO`s now in the company after an acquisition. And he goes `What happens if I leave? And will you guys help me find a new role? What should I say on my resume?` And I said, you don't have to say anything. You just did a successful acquisition or a successful merger. Talk about your successes. But I don't see much of a change going in the recruiting world and people that are good are always going to be working. They're always going to have an opportunity. And especially at that mid-level senior level, senior level roles. How do you hone your skills? I'm not suggesting that we should talk about people who are not good, but if you want to develop new skills in this environment, if you want to get back into the workplace after, let's say, a year, be taken off, or what have you, what skills should you have? Should global be part of your skill set, should digital be continuing to be a part of your skillset? What is that? Let's say you don't have an acquisition in your resume or something like this. What should you do? I think you have to always be improving, but you hit two of the hottest markets, the global and the digital. If you're not touching on those, every company is looking at some way or some automation, depending if you're in the manufacturing world. You have to be up on all of your skills. You have to have a broad spectrum of skills. You have to choose the right market. I can't tell you I live in a great area that people have sold their businesses. And I talked to friends of mine and they're like what's into? You know what? I've been in high-tech, but now I want to move into sustainability. What are your skills? While you might be the best financial, you might have great financial skills. Well, you can transfer that now. People are taking that transformation. It's I hate to date myself again, but going back to that .com. As long as you can do one area very well, and you understand the digital world, the global world, the automation world, you're going to be able to move from market to market. We're not always specific. We always tell clients that we're going to go after your competitors. Sometimes that's not the great area to go after anymore. They've already failed. Find somebody else that's already done something successful. Do your market research, do your research on what skills are needs. I believe that if you're not touching something global ,that's why reesmarx is around, I guess, that if you don't have those skills, how are you going to grow? Because the domestic market's too small. I don't care if you're in Canada, I can be in Americas. I don't care if you're in Europe or an APAC. You gotta be expanding and looking outwards. You gotta have more solutions for you. Ray, it`s been a fascinating conversation, a lot of great examples. Our audience, global audience will appreciate it very much. I want to thank you for being our guest. I want us to continue to talk more about this because it's such an interesting topics, especially as new trends show up over time. I want to thank you. Wish you lots of success with your clients as well with global expansion and executive talent search. And we'll get back to you very soon. Thank you, Alex. Thank you for your time.