Why use a retainer fee-based executive search firm?

This past week, I was reminded yet again of the need for experienced professional help with an executive recruitment mandate.  Along with my core work in retainer fee-based executive search assignments, the demand for, what I like to call “Job Acquisition” help (as opposed to Career Coaching) has proliferated in the last few years.  I’ve been coaching a senior professional with their job search efforts, and have been privy to their recent hiring process with one of the ‘top-notch’ companies in their particular industry.  They advertised through social media avenues – and this job seeker’s first point of contact , after submitting their credentials directly to the “Hiring Manager”, was an email from the “Recruitment Manager” directing them immediately to an online questionnaire and psychometric assessment.  No “Hello, How are you?”, no personal touch with a phone call – just a simply formulaic email directing the applicant to spend their time answering some 100 questions under a timed scenario.  This particular individual with some 20 years of experience did manage to move forward with an interview – but the interview was disjointed, without any written prepared agenda or questions, and no real articulation of the mandate from the potential employer.  It seemed the potential employer was somewhat ill-prepared in interviewing, assessing and simply knowing how to go about defining what they wanted – in a job and in the ideal candidate.  This is not an uncommon issue.

I’m often challenged by potential clients with this question:

Why should we go through a lengthy and an “expensive” executive search process when we can advertise the role through social media?

For many organizations, using an executive search firm is looked upon as a cost rather than as a strategic investment. With documented success rates for the large “brand name” retained search firms somewhere around the 65% mark, it is no wonder organizations are hesitant to engage in an executive search process.However, the question above also generates a certain misleading impression. An executive search process, conducted competently, need not be viewed as lengthy or expensive when you consider the alternatives.

Focus

Unlike advertising for executive talent, an executive search is focused, targeting all appropriately qualified candidates and sources of referrals in the marketplace. Advertising often produces hundreds of applicants but no suitable candidates. Time is wasted screening off-the-mark resumes.

Passive Candidates

An executive search solicits the best and brightest for a client’s role. These are, more often than not, passive candidates – that is, individuals who are not actively looking for a change and would not entertain replying to an advertisement. However, they will entertain a discreet and confidential career discussion with a respected Executive Search professional.

Feedback

An executive search process will provide valuable and timely marketplace feedback. This may help our clients re-evaluate their expectations regarding a suitable candidate, or re-adjust their own business plans.

Confidentiality

Using an Executive Search professional ensures that an organization’s strategic hiring initiatives remain confidential. Yes, a blind ad could be placed in the newspaper; however, it is unlikely that any passive and employed potential candidates will respond.

Division of Labour

It is simple Economics 101 – Adam Smith’s concept of division of labour. Your organization’s core competencies are unlikely to include executive search. Conducting an executive search for important strategic hires is best left to skilled professionals who have years of delivering results in this area. This will allow you to get on with running your business.

Opportunity Cost

This is one of the most over-looked issues – the cost of a foregone opportunity.

The decision to bring on a key member of a management team is an important one. Overlooking the costs associated with a “bad” hire or mismanaged search process could spell disaster. Recent estimates put the cost of replacing a senior executive due to a “bad” hire somewhere at 200% to 300% of the executive’s salary – this may include severance costs, additional recruitment costs to replace the individual, lost time for remaining executives needing to manage another hiring process, lost opportunity for the business, and all the original costs to bring on the mismatched executive in the first place.

Conversely, the ROI (return on investment) for a well-orchestrated executive search may be limitless.

________________

David Laws is a seasoned Executive Search professional with more than 20 years of experience helping organizations across North America find and hire the very best qualified talent for their needs.  As a retainer fee-based consultant, he strives for excellence in results, with completely satisfied and happy clients.

He can be reached directly at 416-885-6600 or via email at david@davidlaws.ca

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