Even before COVID-19, pricing professionals were in high demand and relatively low supply. With the onset of record inflation, the supply-demand gap widened.
The attention brought about by the inflationary environment will likely drive sustained investment in pricing strategies. Pricing has a quantifiable return on investment (ROI); companies can easily measure pricing decisions in dollars.
Further, the value of a pricing organization extends across commercial levers, informing various other strategies, such as discounting, when done correctly.
Organizations should strive to attract leading talent and create sustained, self-managing functions. By this, we mean the following:
- Sourcing talent at lower levels
- Developing and training said talent
- Supporting careers across the organization
Organizations that do this well are far less likely to face employee turnover and hiring risks that disrupt business.
With the supply-demand balance so heavily favoring employees, many employers wonder how to build their pricing function sustainably.
What are the best practices for recruiting and interviewing? What are the expectations across different levels? Where do leading organizations source pricing talent? Let’s answer those questions.
Best Practices For Recruiting And Interviewing Talent
The recruiting and interview processes should move at the pace of the talent. Specifically, when great talent comes along, move quickly.
A general structure should look something like this:
- Informal conversation with the talent acquisition team and/or external recruiter
- Informal conversation with the hiring manager and/or team
- Formal fit and case interviews
Organizations should also consider timing, interview format, and internal committee member selection.
Timing: This process can be executed in 2-3 days when hiring managers and interview committees recognize the need to move quickly for the right talent. Best-in-class organizations, many large multi-billion organizations with complicated HR processes, have figured out how to condense the process to one week.
Interview Format: The purpose of interviews is to judge someone’s qualifications to take on the role and fit within the organization. As an interviewer, your goal should be to ask open-ended questions – let the candidate present who they are, what they’ve done, and their interests.
From this, you should get a sense of a candidate’s:
- Business acumen
- Introspectiveness (are they someone who connects one experience to the next?)
- Growth mindset (are they someone who is constantly trying to learn and improve?)
- Fit within the team culture (are they someone who will contribute and build relationships?).
Some organizations do behavioral interviews, as well. Those can be valuable but may not tell you more than an open-ended conversation.
Whether to use a case study is a crucial decision. Leading organizations use case studies, primarily cases that require the candidate to take a question and leverage sample data to demonstrate a grasp of critical concepts.
Candidates have a few days to build a presentation and readout to the interview committee. Case studies are highly effective in gauging a candidate’s problem-solving skills, business acumen, and intellectual curiosity, all essential for success.
Interview Committee Members: Selecting the right members is critical – you need folks who will provide a positive experience for the candidate. This is just as much about your organization proving itself to the candidate as it is the other way around.
Pick people who offer diverse perspectives but are engaging and relatable. Top talent acquisition companies treat every candidate as a #1 draft pick and franchise quarterback – candidates often select employers based on who they like and who they sense likes them.
Expectations Across Different Levels
Companies should evaluate pricing professionals along three competencies:
- Functional area knowledge
- Technical and analytical knowledge
- Institutional and industry knowledge
At all levels, we advise hiring the fittest candidate with the most upside over someone with more relevant experience – always favor talent and expertise over experience.
Given that there isn’t a pricing major available at most universities and little-to-no professional certifications, it can be challenging to evaluate talent compared to more established career paths with professional credentials (e.g., accounting – CPA, finance – CFA).
You must prioritize individuals with good analytical aptitude and intellectual curiosity. You’re looking for people who desire to solve problems and resourcefully learn and teach themselves. Companies should consider almost any analytical major (engineering, computer science, economics, business, accounting, etc.).
Managers need significant aptitude in at least one of the competencies – ideally in technical and analytical – and solid competence in one of the others.
At this level, individuals are responsible for output and managing business stakeholders and analysts. They need to have the ability to prioritize and communicate effectively.
Director / Vice President
This individual should have strengths in all three competencies, but plenty of high performers get by with two. During the interview, you want to sense that candidates know those strengths and gaps and have demonstrated knowledge of influencing stakeholders and presenting to executives.
True pricing experts with an excellent strategic mindset can easily overcome a lack of institutional or industry knowledge. We’ve found that this combination is a better tradeoff for a head-of-pricing or director-level position than those with institutional knowledge but no pricing expertise.
Where Do Leading Organizations Source Pricing Talent?
As mentioned above, the best answer is to promote from within the pricing organization and source at the analyst level. Recognizing this might not be possible, here are some excellent alternative sources.
Pricing Teams at Other Companies
This can be a great talent source so long as there is an overlap in skills and responsibilities.
More mature pricing organizations like airlines and hotels have a lower bar for technical and analytical skills because long-established tools and algorithms generate many pricing recommendations.
Suppose your organization requires analysts and managers to pull data and ambiguously generate price recommendations. In that case, individuals from these industries may not be the best fit, underscoring the importance of the circumstances.
Other Relevant Business Functions
Individuals with experience in finance, analytics, marketing insights, and assortment and category planning are usually an excellent fit for pricing. Typically, they understand the core concepts and can develop quickly. The key is to make sure their technical skills match your environment.
Historically, consultants comprise the best profession to feed industry pricing roles.
Given the rate consulting salaries have increased (higher than industry), hiring consultants is likely only practical at manager or above. Further, consultants at large firms work on various projects and may have never engaged in pricing or analytically-intensive projects.
Many consultants can spend their entire tenure working on PMO projects or system implementations. That doesn’t mean this talent isn’t worth considering, but it’s essential to evaluate them as any other candidate and not assume they have all of the desired skills or expertise.
Engineering & Supply Chain Functions
Folks with this background are typically very bright and have a high ceiling. The key is to source as analysts (and maybe managers depending on the individual and what they did prior).
Evaluate their starting point business acumen and intellectual curiosity to gauge how quickly they can develop. The oil & gas engineer who says “I’m not crazy about what I do – I find myself gravitating to pricing and commercial topics when I read the WSJ” will be a great hire. Still, the leaders around them must be committed to their development.
Credentialed CPAs at public accounting firms are an excellent fit for analyst and senior analyst hires. They still fit the pay band and have basic skills from their public accounting experience (financial acumen, analysis, stakeholder management).
Many public accountants learn that their passion is problem-solving and impact, which more closely aligns with pricing.
Overwhelmed? We Can Help
Sourcing pricing talent, especially at the senior level, is notoriously challenging because of the atypical career paths seen. We hope this article helped get you started.
If you’re looking for a partner in the pricing hiring process, Jennings Executive can help. We have over two decades of combined experience sourcing senior pricing talent and would love to find stellar candidates for your organization. Learn more today!