A Look at How Executive Search Continues to Evolve with the Times
January 22, 2024 – As the business world continues to shift, so must the recruiting tactics of top companies and the executive search firms that assist them in finding top talent. In a recent survey, more than half of companies reported that they are making changes to their talent-sourcing strategy to close skills gaps and meet changing demands. A new report from Cowen Partners outlines what executive search firms are doing to ensure their clients find the talent they need in a challenging recruiting landscape.
Businesses, including executive search firms, have used ATS systems for years. Additionally, search firms have been able to use asynchronous video interview platforms to allow candidates in any jurisdiction to participate in the interview process, according to the Cowen Partners. “However, advances in technology have allowed executive search firms to take things much further,” the study said. “With AI on the horizon, those conducting searches can use technology in many new ways. Generative AI tools like Chat GPT have come a long way. Because AI tools draw on big datasets that are likely to include common job descriptions and qualifications, you can have these tools write a series of in-depth interview questions based on the specific set of skills you’re looking for in a candidate.”
Contact a Larger Pool of Candidates
As recruiting becomes more competitive and finding qualified candidates becomes more difficult, Cowen Partners explains that it’s even more important for executive search teams to widen their candidate pool.
“AI tools can scrape the internet for candidate-related data such as job titles, location, skills, and specific keywords,” the report said. “This can help recruiters find passive candidates and those with a narrow set of qualifications that are well-matched to the open position.”
Identify Patterns From Previous Searches
AI tools do an excellent job of analyzing historical data and patterns and pulling out trends in that data, according to Cowen Partners. For example, they can identify patterns in the types of candidates a company has hired before and the success rates of those types of candidates to help the company make better, more data-driven decisions in the future.
Related: Predicting 2024’s Talent Acquisition Trends
“With the right AI tools, your team can comb through your job descriptions and written communications to find language that may encourage or discourage certain applicants from applying or responding to your messages,” the search firm said. “Identifying and addressing cultural or gender-based biases can help companies better meet their diversity, equity, and inclusion goals and create authentic workplaces where people feel they truly belong.”
Predict Which Candidates Are Best and Rank Them
Cowen Partners also notes that AI software can analyze candidate data and select the best ones based on how well their qualifications match your job description or stated expectations. In some cases, the firm says that AI tools can even help HR professionals rank possible candidates for the position and using technology like this can result in higher success rates for executive search firms.
Putting Soft Skills Front and Center
There’s no doubt that hard skills are critical for executives. For example, Cowen Partners says it’s important that a chief financial officer understands the technical aspects of handling corporate finances, from analyzing all sides of an M&A transaction to overseeing all FP&A activities. However, this explains that soft skills cannot be denied in terms of their relationship to workplace and business success.
The Current State of Executive Recruiting
Look back three months and optimism was high. Everyone was hoping for a rebound and many were willing to believe certain data points—a market rally, continued growth in executive hiring—served as confirmation we were there—or, at least, almost there. Despite stubbornly high interest rates and global conflicts, Q2 was a proof point for the optimist. But that was then and now it seems those flurries of activity were anomalies, according to a just released report from Thrive. PE and VC deal values are at six-year lows, and the S&P and EMCLOUD gave back much of Q2’s gains. Against that backdrop, the study found that Q3 opened search volume dropped 13 percent quarter-over-quarter, erasing nearly all of the executive search market’s growth over the first half of the year. Now, comparing Q3 to Q4 2022, opened searches are up just five percent.
Perhaps most notable, however, was how that decline happened. “In past quarters, at least one asset class has bucked the trend of the market, growing when the market was otherwise declining or declining when the market was otherwise growing,” the Thrive report said. “Not this quarter. Every asset class—public, private, PE, VC—and stage were in the red. And macro conditions didn’t seem to create any quantitative silver linings.”
According to SHRM’s State of the Workplace study, 77 percent of HR professionals believe that improving employee’s soft skills plays a key role in shaping the future of the organization. Leaders who display these important stills are often better able to motivate employees, foster a sense of camaraderie among teams, and make decisions that balance the needs of the business with those of their customers and employees, according to Cowen Partners.
The firm notes that soft skills that have been shown to be particularly helpful for executive candidates include:
• Effective Communication: Poor communication leads to stress, project failure, decreases in performance and innovation, and low morale among employees.
• Emotional Intelligence: This skill helps leaders better manage relationships, facilitate and manage change, and influence the people around them.
• Teamwork: More than 70 percent of organizations that prioritize teamwork report better customer service, increased employee productivity, and better profitability.
• Conflict Resolution: Managing difficult conversations is a key skill that helps executives get things done under pressure and cultivate positivity in the office.
• Flexibility: This trait helps leaders more quickly adapt to changing circumstances so they don’t lose momentum.
• Decision-Making: Even in the face of mounting challenges, leaders must be able to make good decisions that balance risks and opportunities in order to achieve the desired outcome.
“These soft skills can not only create day-to-day success for a candidate but also contribute significantly to their chances of longevity in the position,” the Cowen Partners report said.
Maintaining a Commitment to Diversity, Equity, and Inclusion
When it comes to successful recruiting, DEI is more than just a buzzword. A commitment to fostering belonging in the workplace for people of all genders and cultural backgrounds helps the company not only attract and retain top talent but also stand out from the competition, according to a report from McKinsey. Companies in the top quartile for gender diversity are 25 percent more likely to have higher-than-average profitability than companies in the fourth quartile. There are similar findings for companies with greater ethnic diversity in leadership.
Cowen Partners notes that as many of today’s top enterprises seek to diversify their leadership teams and boardrooms, executive search firms have no choice but to follow suit if they want to help their clients achieve maximum success.
Changing Values Mean Changing Search Tactics
The sole mission of an executive search firm is to source and recruit qualified candidates for leadership roles. As company sentiments and values change, so must the tactics used to find and hire top talent, the Cowen Partners report says. “Search firms and their clients are now placing more of an emphasis on soft skills,” said the firm. “Though technical expertise still reigns supreme, having the right soft skills in place helps leaders manage employees, projects, and processes in a healthier, more productive way that leads to expected outcomes. Additionally, diversity is becoming more of a priority, as having leaders from varied backgrounds increases innovation, productivity, and profitability.”
Because finding candidates with this specific combination of qualifications takes a pipeline with more breadth and depth, executive search firms are now using advanced technology to better target their search for the best candidates. The Cowen Partners report concludes that with the help of artificial intelligence, search firms are better able to compete for top talent and help their clients meet their strategic goals.
Related: How Fear of a Recession Impacts Talent Strategy
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Executive Editor; Lily Fauver, Senior Editor – Hunt Scanlon Media
