12 Reasons Why Companies Hire Executive Search Firms
March 29, 2017 – Employers typically use an executive search firm when a top job opening is important enough, senior enough and when discretion is at a premium. These three factors warrant the investment of bringing in a search firm. And an investment it is. Retaining a recruiting firm will likely cost a minimum of $75,000, but that figure can rise dramatically with the seniority and pay level of the position. Once you start recruiting executives for your C-suite that cost can easily run into the hundreds of thousands of dollars.
Usually, the search firm will charge one third of the position’s compensation package. But everything is negotiable, especially if you’re asking the recruiter to search for multiple professionals simultaneously. If the cost of not filling the role with just the right candidate is significantly higher than the cost of the search, then you might be ready to consider investing in the services of an executive search firm.
U.K.-based executive recruiting franchise, CNA International, set out to discover why and when retaining a headhunting firm is advantageous. The firm often brainstorms with senior executives about ways they can build their senior management teams without incurring the expense of bringing in the firepower of trained executive recruiters. But at the end of the day, while you can get a lot of lift from employee referrals, job postings and of course the big daddy of them all – LinkedIn – there is no service available (at least not yet, though IBM is working on it) to simply download a thoroughly vetted, interested and qualified A-player. Nothing, it seems, is comparable to an executive recruiter.
Select the Right Search Firm
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12 Ways to Recruit Top Performers
Recruiting top performers, according to the best search consultants who ply their trade day in and day out, is an exacting science – it is labor intensive, complex, and requires a rare set of people skills and business expertise. This might be why tens of thousands of recruiters roam the earth – and why most of them are in hot demand today.
Here are a dozen reasons why you need to consider bringing in an executive recruiter for your next important hiring mandate, along with tips from leading recruiters themselves.
1) Good is just not good enough. You require a senior executive candidate who is truly great. If hiring top performing talent is important to your company, a search firm can help you do the rigorous work required to nab game-changing hires. “It is important to look at the impact these professionals can have on a company,” said Craig Buffkin, managing partner of executive search firm Buffkin / Baker. “If it turns out you’ve identified and hired a game-changing leader, your company stands to make significantly increased revenue or profit gains.” He said the real value great recruiters often bring is their ability to assess all of the available talent, and that means looking inside your company for leaders, or those with potential to become great leaders but who might have been somehow overlooked, as well as examining the field of external candidates. For the latest news and updates on Buffkin / Baker, visit their Industry Media Center profile page.
2) The search is incredibly important at the senior executive level. Searches for C-level positions that report into the chief executive officer are just too important not to go out to an executive search firm. Executives within the C-suite often make or break a company. A search firm, said Robert A. Foster, president of recruiting firm Foster & Associates, can help mitigate the risk of hiring for these coveted positions. “During my 15 years at Korn Ferry,” he said, “I developed a Rolodex that was deep and wide. In my own firm over the past eight years, my clients have come to know that I have many contacts who are with leading companies, as well as alums of those organizations, and who won’t be off-limits to me.” As a result, he said, his searches can be completed thoroughly, expeditiously and with a much reduced possibility of an accidental, or bad, hire. For the latest news and updates on Foster & Associates, visit their Industry Media Center profile page.
3) You are seeking a candidate with a rare mix of skills. If you have an important search in which you are seeking the proverbial needle in the haystack, a search firm can help you get it done. The better recruiting firms will deliver a slate of candidates with the right mix of knowledge, skills and abilities. But the very best ones will also advise on things like culture fit, ambition and emotional intelligence. Today, these sorts of things matter more than hard skill sets ever did. “Companies solve their most specialized needs when they partner with firms like ours,” said Jay Rosenzweig, founding partner of search firm Rosenzweig & Co. and a noted expert in designing, building and attracting world class executive teams. “We develop a rigorous, disciplined process,” he said. “Our experience has been that when companies develop a disciplined approach to their talent problems, disciplined results will logically flow.” For the latest news and updates on Rosenzweig & Company, visit their Industry Media Center profile page.
4) You have a search for a senior executive position that you just created. When an executive search falls outside your area of expertise, a recruiting firm can plug the knowledge gap with their domain know-how. This might be why specialist recruiters have grown in importance and prestige – and why these are some of the most sought after talent hounds in the field today. “It is critically important to bring a depth of knowledge and insight into any space that recruiters work within,” said Mike Bergen, managing partner and human resource global practice leader for Allegis Partners U.S. For him, that means bringing market intelligence and thought leadership from the expansive HR field to every project he works on and completes for clients. “Our job is to help our clients, at times, challenge their own thinking and status quo by sharing trends and best practices,” he said. That is the best reason why specialist recruiters are in big demand. For the latest news and updates on Allegis Partners, visit their Industry Media Center profile page.
5) You have to replace an under-performing executive while he is still in the role. For companies that need to line up a replacement while a senior executive remains in the role, search firms offer a much-needed veil of secrecy. “Trust and confidence are key elements to a successful search partnership,” said Dale Jones, chief executive officer of Diversified Search. Sometimes companies need to take recruiters into a higher level of confidentiality in order to meet their special requirements, he noted. “A quiet phase for finding the right leader gives the client and search firm the chance to calibrate on the key must-haves in a search.” While a veil of secrecy is needed on occasions, he added, “we must also move to trust and transparency.” For the latest news and updates on Diversified Search, visit their Industry Media Center profile page.
6) You have to recruit from a target company with which your company has good relationships. If you need to recruit top executive talent from partner companies with which your organization does business, or even from direct rivals which is often the case, the confidentiality that search firms offer helps avoid ruffling feathers. According to leadership advisor Marlin Hawk, one fourth of American businesses have experienced a surge in talent raids, but most companies have done nothing about protecting themselves. In fact, 54 percent are virtually defenseless against corporate poaching, according to a recent study by the firm. All indications are that the problem isn’t going away anytime soon. Some may be skeptical about search firms working to protect client companies against talent raiders when as often as not they are the ones aggressively trying to lure away top talent. And though Mark Oppenheimer, Marlin Hawk’s chief innovation officer, agreed that executive recruitment firms campaigning for talent retention might seem hypocritical, that’s not necessarily the case. “We genuinely want to protect the great hires we make for our clients,” he said. “That’s why we make such a big deal about preparing to onboard candidates and integrating them post-placement. In our role, we talk to a broad range of candidates and gain valuable insights into why people want to stay with their current company or move on. We can’t work miracles, but we can bring our insights to the table and partner with clients in developing strategies to maximize executive talent retention.” Now that’s service. For the latest news and updates on Marlin Hawk, visit their Industry Media Center profile page.
7) Your senior leadership team lacks diversity. Because not all backgrounds of candidates are well-represented at the senior executive levels, search firms can help level the playing field by conducting original research to ensure equal opportunity for all candidates. “Large numbers of companies are not informed on the diversity of senior level professionals that exists in the workforce,” said Milton Hall, president and CEO of Human Capital Consultants LLC. Consider this, he said: “Less than two years ago, 37, or about seven percent, of Fortune 500 companies were led by minorities, while 463, or 93 percent, were white male led.” But, he noted, more than one million people of color hold at least a Master’s Degree. “Clearly, the talent pool is chock full of qualified, ready candidates of color to fill senior level positions.” Executive search firms, he said, often underestimate the power that’s at their disposal, and those who do provide a disservice to the companies handing them hiring mandates. The very best recruiters are those that can scale every network and access every talent pool available – and check their unconscious bias at the door. For the latest news and updates on Human Capital Consultants, visit their Industry Media Center profile page.
8) You lack internal bench strength and have few successors to your senior executives. If you sense a key executive might be on the verge of leaving or that you could benefit from top-grading, a succession bench might help you tee up executive hires in advance of need. Three quarters of HR leaders in a recent poll identified leadership succession as their primary internal challenge. And it is at the very top of companies where succession planning can, and often does, go lacking. “My advice for every company is to be prepared,” said Russell S. Reynolds Jr., founding chairman of RSR Partners, a leading board and executive search firm based in Greenwich, Conn. Mr. Reynolds said that beyond fiduciary and human resource reasons, it is simply good business sense to “know who your successor is at all times.” Proper corporate governance, he added, warrants that boards and sitting chief executives be “very close on the issue” and have a confidential succession game plan in place at all times. “One has to assume that things can go wrong, and they often do,” he said. “Any good CEO or board chairman worries about this and has a plan.” A good search firm, he added, can of course be a huge help.
9) You do not have the time or the resources to take on an executive search. If you already have too much to do and too little time, taking on an important executive level search can quickly become its own full time job. That is what search firms do, full time, day in and day out, all year long. “At HealthPlanOne, we hire over 800 seasonal people per year and it is critical to effective hiring to utilize our internal recruiting team,” said chief human resources officer (CHRO) Jennifer Buchholz. “This team understands and lives the culture, the skill set we require and our internal processes resulting in improved efficiency and speed in our recruiting.” While in-house recruiting is, indeed, a new prerogative for companies like this, many others now rely on a combination of in-house recruiting and external searching when trying to uncover the absolute best talent that money can buy.
10) You have tapped out your personal and company networks for candidate referrals. If you have exhausted your network of connections for possible referrals, it is time to access another network. Executive search consultants are among the most well networked people in the business. “While the underlying premise of social media is to create a readily-available platform for people to connect, the single most valuable aspect of cultivating credible one-on-one relationships with talent is trust in the relationship,” said Smooch Repovich Reynolds, managing partner for the investor relations and communications search practice at DHR International. And that means meeting them on their turf and in their inner circles. People, she noted, are not meant to be transactional puppets, but rather valued partners in the executive search process. To that end, Ms. Reynolds suggests keeping good relationships with recruiters and keeping every option open and on the table. For the latest news and updates on DHR International, visit their Industry Media Center profile page.
11) You have an important executive search that is taking too long. Whenever a search takes too long, it is time to call in the reinforcements to speed time-to-hire for challenging searches and those with compressed timelines. “Our consultants have detailed knowledge and expertise of the discipline and the sector in which they work, and that means we can quickly interpret client requirements to ensure we are completely aligned prior to the search commencing,” said Adam Hillier, marketing and digital practice lead at London-based Wickland Westcott. “We work collaboratively with our clients and agree to a clear plan and associated timelines for every assignment, and that can oftentimes reduce our lead times.” Because he and his colleagues constantly ‘trade’ in the market, they have cultivated an extensive network of exceptional talent. “This enables us to deliver clients a comprehensive and rigorous search, at speed, resulting in best-in-class service.” One more reason why going outside to experts who know their craft so well works almost every time.
12) You want to give your company a strategic advantage through better hires. Executive search firms are in the business of delivering top performers – the 20 percent that are so effective and are responsible for 80 percent of the results. Any time you have a senior executive search, it is an opportunity to trade up to a top performer and to drive results. “We are often more effective in recognizing what top performers are and look like since we have the chance to see and evaluate them more frequently than our clients do,” said Jim O’Malley, partner of TalentRISE. Interviewing and assessing talent is mostly ‘event driven’ within organizations, he said. In other words, seldom does an executive take the time to interview and assess talent unless he or she has a specific need or current opening within their organization. (To find out how to best leverage an external executive search partner here’s a further read from TalentRISE: ‘Thirteen Rules for Hitting the Sweet Spot in Your C-Suite Search’). “As professional recruiting consultants, all that we do is interview and assess top performers. Therefore, it would stand to reason that we are much more experienced at assessing and identifying top performers since this is what we do, day in and day out.” For the latest news and updates on TalentRISE, visit their Industry Media Center profile page.
Contributed by Scott A. Scanlon, Editor-in-Chief and Christopher W. Hunt, Publisher — Hunt Scanlon Media