7 useful questions on executive search firms
The end of the executive search industry?
Everything has a natural cycle; birth, growth, zenith, decline and death. Empires, companies, products, services, people, insects; everything. Look at some of the things we thought would last forever like the USSR, Oldsmobiles, Pan Am and corduroy flared trousers, that are now consigned to memory. And this process just keeps happening and, if anything, it seems to be getting faster, or maybe that’s just my age. So how do we get from these lofty philosophical musings to the end of the executive search industry?
Well, like everything else it has a life cycle and we maintain that this industry, in its traditional form, has reached its zenith and now faces a decline (short or long it doesn’t matter) until its inevitable demise. Here are a key questions you might ask to challenge this assertion:
Is using a search firm the only way to hire senior people?
The search business is part of the recruitment industry, but has managed to persuade us that it does something different. Clients need candidates. The search teams will find, screen, interview and test candidates. They manage the employer and candidate through an interview process, negotiate the terms of any job offer, and then move onto the next assignment. There really isn’t anything more mystical, and it’s actually the same process run by every good recruiter, all around the world.
2. Do search firms find candidates others can’t?
Search firms will promise you access to a hidden cache of candidates known only to them after a thorough search. But with so much information now available through the internet (think Google and LinkedIn for starters) is anyone really hidden? Let me share a secret with you – all of the best recruiters know how to map out companies and sectors and know how to build networks to access those “hidden caches”. You might also find that search firms actually keep a database of candidates either left over from a previous search or from direct candidate enquiries. So if a search firm really does a lot of work for one client, or in one sector, is it really credible that they start from scratch every time?
3. Do I need search firm support because I’m in a specialist sector/industry?
Even easier to find good people. It is remarkable how often the hiring leaders will know of all the people they might consider hiring and are unsurprised by the names the head-hunter finally produces. Many employers don’t want the risk of hiring someone from outside their sector (despite their initial briefing assurances), which makes finding the right candidate even simpler.
4. Do I need a search firm to make a confidential approach?
Of course not - all professional recruiters rely on their reputations for confidentiality. There is however some apparent kudos in being contacted by a search firm (a mark of success someone told me!) but the level of confidentiality is no different from any reputable agency contact. I do find it ironic that when I visit any head-hunter I’m often asked to sign in to a public reception book - all those coming after me can see who I am and where I’m from - so much for confidential!
5. The expertise and depth of relationships with search recruiters must count for something?
Of course. But knowledge of a sector and/or profession is not exclusive to the executive search specialists. And a great recruiter, from an internal function or an agency supplier, will be just as strong for the quality of their relationships – they will have built reputations as trusted advisors often despite exceedingly competitive market environments.
6. All search firms must offer value for money with guaranteed results?
Everyone grumbles about the cost of executive search. Both I, and most of my senior colleagues have long complained about how much search firms charge and the way those fees are structured - the notorious third, third, third based on a hefty percentage of the new hire’s first year remuneration (including all the extras). A shocking number of search assignments never progress past the first or second payments. So when asked “was it worth spending all that money”, their are plenty of people I know, who don’t think search firms deliver.
7. But the service must be great?
Not necessarily. I hear that search partners are on eye watering salaries. They have teams of junior people who handle the process work. You’re lucky to be deigned some of their valuable time. It reminds me of the traditional accounting firm where you paid for a Partner, you talked to a Manager, and your work was actually done by a junior clerk.
What’s my choice then?
Well, you can keep on paying a lot of money for a service that may or may not deliver.
Or you can change.
Try investigating the new search models being developed by modern thinking search firms. Built around a very different fee structure (often significantly less than the traditional search model); the emphasis is on service partnership, more streamlined processes and technology use, and speed of delivery; without impacting on quality of result.
Try those truly niche search agents who really do have deep expertise in a profession or sector – they don’t need to start searching from scratch every time, and their expertise should create a more favourable branding impact for you with prospective candidates. They should also be more nimble given they don’t have cumbersome overheads to support.
Don’t let the tail wag the dog. Be clear with your search partner on the delivery timelines you need, rather than you accommodating other workload priorities of your consultant. Ask what other types of “value add” service they provide, and then expect these for every hire. You should feel like your search firm is a high performing business unit of your company and NOT another overhead.
Ask for ownership of research – you’ve paid for it, and it’s a talent pool you could be accessing in the future.
Think about demanding a short list up front – do you really need those long lists of people who might be of interest, and might be interested in the role; or do you just want to know about the best people who would accept your employment offer? Do you really have time to read all those reports?
Think about an embedded search practice. You can secure many of the skills and benefits of a great search firm, for a fraction of your annual spend. Structure it the right way, and I guarantee you’ll get exacting results, that will keep all of your Execs happy, and take away your hiring pain. You’ll wonder why you hadn’t done it sooner.
So the executive search profession is doomed?
Yes. And no. I believe that there is considerable value that the executive search profession can and will continue to offer. But I think about companies everywhere, having to operate in a smarter, sleeker mode to stay ahead of the curve. They cannot hide behind shrouds of mystery – ease of mass communication across the international public has ripped that away. They’re having to change their work practices, their pricing models, and deliver real value to the buyer.
The executive search profession must do the same thing. We predict that traditional firms must step down off their pedestals and join the real business world, or go the way of the dinosaurs.
About the Author
Leanne Morris is well known as a both an outspoken advocate and critic of the HR profession. With long standing networks across 94 countries in all specialist areas of the function, and a multi- continent work history, she is a sought after subject matter expert on international HR hiring trends and HR hiring best practice.