As a hiring manager, how do you know when the time has come to seek out a retained executive search (RES) firm? The answer to that question is simple: Every single time you are hiring a senior level executive.
Leaders may toss around figures like 50k and 100k, but the cost of an unfilled position is likely much larger than numbers written on a single check. How much does it cost to divert the work of others to fill the gap until the role is filled? How much business is lost? How much goodwill could you potentially lose by openly poaching from partner companies? How long is it going to take to personally find an individual with the precise mix of skills that you need?
Residents of the C-suite should rather take a holistic approach to finances when it comes to hiring senior executives. Using a RES firm is slightly more expensive than using contingency firms (no hire/no pay), but truthfully, when it comes to hiring executives for top positions, the latter are less suited to the task.
Compare and Contrast
Consider: Contingency firms get a list of requirements, sort through their files looking for reasonably close matches, and then forward some CVs in the hopes that you’ll hire one of them, and then the contingency firm will get paid. While this is a legitimate working system, the time and detail dedicated to ensuring that a particular candidate is “the one” is significantly less. This is not to downplay the work or necessity of contingency search firms; simply to display how a different set of needs (i.e. filling an executive/c-level role) requires a more comprehensive approach.
The nature of contingency firms requires them to be less invested in one particular prospect; simply due to the mere volume with which they are dealing. Contingency firms serve their purpose; they provide a broad range of candidates for many generic executive positions. The candidates are vetted, but in all likelihood, not as thoroughly as you are going to need for a senior executive.
The last thing you want is to hire is someone with an obscured track record of failure. If you don’t find out first, your competitors will, and they will likely have the ability to use it against you. For instance, the last thing you want to discover is that your CFO was implicated in a pension scam in a foreign country, in a position that he or she held for only two months; one that was likely omitted from their resume.
RES firms provide thorough vetting of all candidates. They approach them directly, interview them face-to-face, and then provide detailed assessments of the candidates to the hiring companies. The reports often include intelligence assessments, aptitude assessments, and personality traits (a type of “psychometry”, if you will), as an aid to determining their compatibility.
Time is Money
More importantly, RES firms provide credibility. The “cream of the crop” that you are looking for may not necessarily be looking for you. Top executives are well treated, well paid, and well compensated. This amounts to them being passive candidates that are most likely not looking for a change.
Most top executives only work with RES firms. It would be atypical for them to even consider working with standard headhunter who is looking to build a portfolio of candidates. If the recruiter doesn’t come to the table with a solid, fascinating offer, there are plenty of other ways that an executive can use their valuable time to achieve their goals.
Skill and Experience
Even if the position isn’t the precise one which that executive needs, they are now aware that this recruiter has serious, legitimate offers. Plus, studies have shown that executives are much more open to discussing their capabilities, desires, and accomplishments with a third party, rather than directly with the competitor looking to lure them away from their current position.
The fact of the matter is that these candidates are willing to discuss their goals, their plans for the future, and their ambitions. Simultaneously, RES recruiters have the advantage of getting to know the executives, not just for their capabilities and accomplishments, but for how they integrate with other team members.
Retained executive search recruiters decipher the environment in which executives will thrive; they can place them in corporate cultures that match their personalities and tendencies. It is in the company’s best interest to obtain an employee for the long term, because the length of time that the average senior executive spends in a particular position is only three years.
If they are matched with the right company, the affiliation could technically develop into a years’ long employment relationship. That, in turn, is going to save the cost of replacement, downtime, diverting other people to cover the necessities of the position until it’s refilled, and all sorts of other needless annoyances.
The Takeaway
Ultimately, the RES firm will provide much greater value. They have a vested interest in being successful because that will establish a business relationship, and then you will work with them again. Better yet, you’ll recommend them to others.
Free up your HR department to do their real job of managing your people on a day-to-day basis. In reality, they are likely not equipped for senior executive searches any more than contingency firms. Hire a RES firm and let them get on with the job, solving your problem quickly and permanently.
Stewart, Cooper & Coon, has helped thousands of decision makers and senior executives move up in their careers and achieve significantly improved financial packages within short time frames. Contact Fred Coon – 866-883-4200, Ext. 200