March 29, 2019 – To thrive in today’s executive search market, recruiting firms must take “extreme ownership” of client needs, said Rick DeRose and Kevin O’Neill, managing partners of the executive search firm Acertitude, in a new report by Invenias, a global provider of cloud-based software for executive search firms.
As internal talent teams have grown more sophisticated and capable, the recruiters agreed, the expectations placed on external partners to perform and deliver an outstanding search experience have become exponentially higher. Messrs. DeRose and O’Neill co-founded their firm to drive strategic change in the search industry, which they felt had lost its focus on clients.
Established in 2015, Acertitude specializes in recruiting CEO, C-suite and executive talent in the consumer, financial, healthcare and life sciences, industrial, private equity, professional services and technology sectors.
Like the private equity firms and corporate businesses they serve, the search consultants are focused on delivering better results and better experiences. Although they take advantage of the power of digital and the possibilities offered by artificial intelligence (AI), the pair remain people oriented and committed to the value that recruiters bring in building human connections.
Mr. O’Neill said he believes that a key change in the market in recent years revolves around the increasingly sophisticated buying patterns of the clientele. “Clients have become better consumers of search,” he said. “They know what they are buying and we’re seeing far more rigor around the process used to select the right search firm — and that’s a good thing. People decisions at the board and leadership level are critical and should be considered with care.”
“We believe that if you’re not adding genuine value to your clients, you can expect the business to be brought in-house,” said Mr. O’Neill. “This is a growing trend in the industry.”
For Mr. DeRose, an equally important change has been the growing influence of private equity investments. “This has exploded over the last decade,” he said “Private equity touches over half of our business in some measure. We’re frequently tasked with identifying C-suite talent for portfolio companies, as PE firms look to build more effective playbooks that involve leadership due diligence. Or we’re charged with bolstering a PE firm’s internal team of investment professionals, operating partners and functional specialists.”
Leadership Dilemma Unfolding at Private Equity Firms
The private equity sector can expect to see an expanding bidding war for top talent. Driving the trend: persistent global talent shortages across the C-suite. Nearly every industry and function is affected, including finance, healthcare and biotech, digital and technology, among others.
“Leadership is the new bottom line for private equity operating executives seeking top talent for their portfolio businesses,” said Scott A. Scanlon, the firm’s founding chairman and CEO. “The PE sector is in the crosshairs of a widening war for leadership.”
“We are partnering with the investment community more than ever and I believe our value here is on the rise,” he said. “You just can’t execute an operating strategy and monetize a business without great people.”
Partnerships within the PE community continues to profoundly impact Acertitude’s business, said Mr. O’Neill. “There are more constituent parts to the service we provide here, taking us beyond search into far more value-added, consultative territory,” he said. “We might be asked to advise on how to present to the board of directors, or to help craft the investment strategy. How is the business going to transform and can we bring to bear our past experiences of recruitment and talent strategy in support of this?”
Balancing Digital with Human
Private equity is clearly a force of change for Acertitude, but can the same be said of digital, which many see as a game-changer in the industry? Mr. DeRose, who leads Acertitude’s technology practice and speaks on digital trends, said that for all the technological changes, recruiters must remember their core values.
“We’ve all been using digital for several years, such as digital apps, CRM tools, and marketing analytics, and we run our business on the Invenias cloud-based platform Digital 1.0.,” he said. “I see a real opportunity to move towards the next era of digital. This is where we’ll see greater use of AI and big data. While I think this will gain traction in the research and selection aspect of what we do, we mustn’t forget that ours is an industry that has evolved through personal connection, so we need to be thoughtful about how we adopt AI.”
Mr. O’Neill agreed. “I recently interviewed ‘the father’ of emotional intelligence, Dr. Daniel Goleman, at the World Business Forum,” he said. “I asked if he thought AI would replace human interactions in the talent market and he said categorically ‘no.’ So much of human communication is non-verbal and what humans bring to the mix at the highest level of search is hard to replace.”
Nonetheless, the partners said that new technologies have a significant place in the search industry, and that the essential challenge is to find the right balance. “While machines can recognize patterns, I believe that humans are the most proficient pattern-recognition machines around,” said Mr. DeRose. “The selection process is an area where we are seeing advances with AI, yielding richer data on individuals and their patterns – career moves, sectors, qualifications, etc. Adding human knowledge and experience to the mix helps to mitigate risk in terms of the selection decisions made.”
War for Talent
At the same time, the search industry must address what Mr. O’Neill said is its biggest issue – recruiting its own internal talent. “During the 10-year period from early 2000 to 2010, the recession saw a lack of new talent being developed in our industry,” he said. “This has resulted in a gap of executive search and recruitment talent today.”
The two Acertitude partners are unequivocal on the need to develop home-grown talent to resolve this shortage. Recruitment is one avenue, but it’s not enough, they said. So it was that the firm established a center in Los Angeles to develop internal talent. “We’ve made a conscious choice to invest in our own talent,” said Mr. DeRose. “We have a clear strategy to invest in recruitment, on-boarding, development, career progression, and all other aspects of nurturing our people.”
“We’re different in terms of how we approach our clients, so the challenge we face is to ensure we attract, retain, and unleash the potential of our own talent who share the same philosophy and values,” said Mr. O’Neill.
“Our people take extreme ownership of the client relationship,” he said. “Being ‘client-first’ from start to finish is in our DNA as we go to great lengths to not only drive extraordinary results – but an unparalleled experience – for our clients. Our internal talent team recognizes that this isn’t just a transactional business – it’s not about recruiting people who’ll bring a book of clients with them, but about finding and nurturing people who match our culture and mission.”
Local Focus for Global Success
The client-first ethos extends to how the business manages its relationships in a global talent market. Many of the Acertitude’s clients are global and both partners believe that to grow globally, search firms must thrive locally.
A Bright and Busy Future for Executive Recruiters
Research from CareerBuilder, Inavero and the American Staffing Association shows access to quality candidates with the right skills is the biggest pain point for more than 50 percent of hiring managers, who look to make great use of search firms in coming years.
“Global to us means local reach and expertise, aligned with the strategy and roles for a specific region or country,” said Mr. DeRose. “We bring value in our understanding of the different models a client might have for its talent across the world. There are tools to locate candidates anywhere globally, allowing searches into different pockets around the world.”
“To a certain extent this has levelled the playing field, but true value lies in the insight offered into each candidate; their character, career patterns, a view in to how they achieved the results they got, and how this aligns with the client’s need,” he said. “I believe that without this knowledge, global reach can become more of a risk than an asset.”
While big global search projects for Fortune 100 and FTSE organizations are still available, they’re not the norm, said Mr. O’Neill. Rather, companies segment their talent strategies by markets and regions. He talked about a key maturity indicator for search firms, saying that “while you don’t have to operate wholly on home ground, you need to recognize that you can’t be all things to all people globally.”
“If you don’t have the appropriate local capability, the truly mature and client-centric approach is to hold up your hands and say, ‘No, we can’t help you with your search in this region’ and recommend a better option. We’re confident our clients respect our honesty on this and realize that we ‘have their backs.’ The trust that you create from such an approach is significant.”
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Andrew W. Mitchell, Managing Editor – Hunt Scanlon Media