May 26, 2023 – As the competition intensifies in the ongoing war for top executive talent, search firms are increasingly experiencing heightened pressure to provide an array of comprehensive services that go beyond pure retained search. The evolving landscape demands a strategic response, leading numerous firms to diversify, expanding their repertoire to encompass an assortment of supplementary offerings such as interim solutions, professional development and coaching programs, rigorous assessment methodologies, and other cutting-edge tools, all in conjunction with their search services.
In this era of dynamic market conditions and rapidly changing business landscapes, the demand for top-tier executive talent has reached unprecedented levels. Organizations are vying for visionary leaders who possess the acumen to navigate complex challenges, drive innovation, and steer their companies toward sustainable growth. Today, search firms find themselves at the epicenter of this talent battle, acting as intermediaries between businesses and highly sought-after executive candidates.
Traditionally, search firms focused primarily on retained search, a process in which they partnered exclusively with organizations to identify and secure top executive talent for permanent positions. However, with intensifying competition and the need to adapt to the evolving demands of clients, search firms are expanding their service offerings and providing a more comprehensive suite of solutions.
One notable aspect of this diversification is the inclusion of interim solutions. Interim executives offer a flexible and agile approach to addressing immediate leadership needs. These seasoned professionals can step into critical roles during periods of transition, such as mergers, acquisitions, or sudden departures, ensuring business continuity and providing stability while a permanent executive is identified. By incorporating interim solutions into their portfolio, search firms can deliver quick and effective remedies for clients’ urgent talent requirements.
Another pivotal aspect of expanded service offerings is the emphasis on professional development and coaching programs. Recognizing that merely placing executives in coveted roles is insufficient, search firms are now offering tailored coaching and development initiatives to support their clients’ long-term success. These programs empower newly appointed executives to seamlessly assimilate into their roles, enhance their leadership capabilities, and navigate the intricacies of their organizations. By investing in the growth and development of their clients’ leaders, search firms establish enduring partnerships and demonstrate their commitment to nurturing executive talent.
Furthermore, search firms are increasingly deploying advanced assessment methodologies to ensure optimal candidate selection. Rigorous assessments, including psychometric evaluations, behavioral interviews, and cognitive aptitude tests, provide valuable insights into candidates’ suitability for specific roles and organizational cultures. By incorporating these assessments into their search processes, firms can present clients with a curated pool of candidates who possess the ideal blend of technical expertise, leadership skills, and cultural alignment. This meticulous approach not only increases the likelihood of successful executive placements but also enhances the overall quality and alignment of the talent pipeline.
Search firms are also continuously exploring innovative tools and technologies to augment their search capabilities. The advent of artificial intelligence and machine learning has revolutionized the executive search process, enabling firms to harness vast amounts of data to identify hidden talent pools, predict future trends, and gain a competitive edge. AI-powered algorithms can analyze resumes, social media profiles, and professional networks to identify potential candidates who might have otherwise remained undiscovered. By leveraging these technological advancements, search firms can expedite the search process, improve candidate matches, and deliver better results to their clients.
The expansion of service offerings by search firms not only addresses the evolving needs of their clients but also enables them to differentiate themselves in a crowded marketplace. In an industry where competition is fierce, standing out is paramount. By providing a comprehensive suite of services, search firms position themselves as trusted partners capable of delivering end-to-end talent solutions. This differentiation not only attracts clients but also establishes long-term relationships founded on mutual trust and shared success.
Talent Experts Weigh In
“The implications of a recession can result in a search firm having access to a better talent pool,” said Sandy Gross, founder and managing partner of Pinetum Partners LLC. “For Pinetum Partners, this means we can cherry pick the best of the best during a recession as companies might be downsizing and right sizing with fewer but better talent. Furthermore, our coaching business historically picks up during these times as companies really hunker down and evaluate their talent. They will even spend money on coaching when times seem tenuous to help them hold onto existing top talent by providing support for employees who are producers but may need development in different areas, such as leadership training, communication, succession planning, and mentoring, etc.”
“It is important for search firms to offer additional services since online job search engines and internal recruiters can only go so far,” said Ms. Gross. “A high touch and experienced executive recruiter is not only soliciting the best talent for a company’s specific needs, they provide a deeper dive into pairing both the skill sets of the particular positions combined with the specific cultural nuances of each respective company.”
“For the last 25 years we have been providing executive coaching, personality and emotional intelligence assessments for individuals and groups,” Ms. Gross said. “Additionally, we tailor off-sites for companies to facilitate leadership growth and communication. It’s an opportunity for firms to improve cohesion at various levels within the organization.”
“Direct Recruiters has been set up for the past 12 years to offer contract, contract-to-hire, and direct hire services,” said Shayla Jastrzebski, partner and recruiting manager of hospital IT at Direct Recruiters Inc. (DRI). “As the market tightens and during a potential recession, contract and contract-to-hire services are great options for employers. If an organization has a specific project that needs to be completed in a timely manner, contract work provides the benefit of bringing on contract talent with the understanding that the contract will end at the end of the project. With contract-to-hire the employer can “try before they buy” to ensure the candidate is the right fit and mitigate any financial risk that comes along with directly hiring a candidate.”
“It is important for search firms to offer other services because no client is the same and each client has different needs,” Ms. Jastrzebski said. “By offering contract and contract-to-hire we set ourselves apart from most other search firms and provide customized solutions to each client in order to ensure we are keeping our clients happy. Direct Recruiters offers contract and contract-to-hire in addition to direct hire and executive search.”
“During a recession the focus is often on the layoffs that organizations sometimes inevitably have to turn to, less attention is given to the employees that choose to leave and transition to other spaces less affected by economic downturn, even if it means starting over,” said Yael Freimann, vice president of strategic growth at TI Verbatim Consulting (TIVC). “According to the Society for Human Resource Management (SHRM) the average it costs a company to replace an employee is equal to six to nine months of that employee’s salary. Investing in soft skills across the strata of your organization can result in innovation and productivity as an outcome and it also shows your employees you’re willing to invest in their future.”
“At TIVC we have recently rolled out workshops that support the development of soft skills,” Ms. Freimann said. “Our leading organizational change: building blocks for cultural health workshops use resilience-building leader program principles throughout three modules to prepare learners to champion resiliency and team learning at every level of an organization. These modules are particularly recommended for teams who collaborate regularly or for cross-functional groups to share strategies across an organization.”
“We are also developing curriculum on coaching with cultural orientation that will meet the 125-hour education standards for ICF accreditation,” said Ms. Freimann. “An ICF credential is a professional certification indicating that you have met specific standards and requirements designed to develop and refine your coaching skills. It is an indication that you are dedicated to upholding strong principles of ethical behavior in coaching. ICF offers three credentials, corresponding with the quantity of education and experience required to earn it.”
“Learning how to coach with a cultural orientation will equip coaches to engage clients with diverse and intersecting identities, along with helping those same clients engage with their own diverse co-workers,” Ms. Freimann said. “The skills coaches will learn through coaching with a cultural orientation will also equip them to lead and engage a diverse workforce. Ultimately, the goal is for coaches to develop skills to further diversity, equity, and inclusion with their clients and in their workplaces.”
“In 2021 we launched our new GrowthPoint solution in early 2021, offering a retained sourcing model with deferred retained payments until first and second round interviews,” said Ken Schmitt, founder and CEO of TurningPoint Executive Search. “This provides more flexibility to smaller companies with more limited resources, while still providing access to top tier talent. In March 2023, we launched our new TurningPoint human resources practice, offering fractional and project based outsourced HR support to mid and small-market companies.”
“The global pandemic made it apparent that employee engagement and mental health are at the forefront of building and retaining a world class, highly productive business,” said Mr. Schmitt. Leveraging our expertise in sourcing, screening and placing high impact talent, the executive search industry is uniquely positioned to expand into other HR solutions, solving more problems and serving as an even stronger partner to our client companies. In addition, so many mid and small market companies can’t afford – and don’t need – a full time HR leader. However, these same companies still need an HR adult in the room, and one of the best ways to benefit from the expertise of a strategic HR leader is to engage in a fractional or consulting arrangement with a search firm.”
“Prestige Scientific survived the 2009-10 market crash that affected venture backed life science companies and tightened their access to new funding,” said Stephen Provost, co-founder and managing director of Prestige Scientific. “As a result, many venture back clients extended their capital runways by hiring interim functional heads. As this market tightens, we will continue to increase our interim search business to hedge our traditional executive search services.”
“If a recession deepens and cash conservation becomes imperative, you may see an unbundling of services in some companies and added value in others,” Mr. Provost said. “For those seeking a lower price point, they may seek to utilize portions of a traditional search, while combining with their internal resources. It’s also common to provide enhanced services to remain at the same price point. That may be in the form of executive coaching, DEI advisory, or succession planning.”
“We are in a service industry and our goal should always be to help make our client’s day easier, in whatever way that may be,” Mr. Provost said. “The more services that we can offer under our brand, the less our clients will need to partner with other firms. We currently partner with other SMBs that provide executive coaching for first time leaders into ELTs by a former biotech CHRO and team building for venture capital firms led by retired CIA.”
“Cowen Partners has developed and launched a proprietary personality assessment,” said Ash Wendt, co-founder and president of Cowen Partners. “This tool measures behavioral, motivational, and thinking style assessments in one applicable tool. Offering this service to our clients helps them understand each candidate’s behavioral and communication tendencies, values, and ability to think critically prior to offer stage. We feel that accurate and reliable assessments become more in-demand during a potential recession.”
“It’s important for search firms to develop and offer services to maximize transparency and minimize risk related to the hiring process,” Mr. Wendt said. “Companies who engage an executive search firm expect to identify the right person for the right position, the first time and every time. Cowen Partners plans to develop additional tools that will prove to be the top choice among clients who value accuracy, compliance, and objectivity.”
Related: CEOs Anticipate a Possible Recession
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media