Considering the impact that a company’s key employees have on its success, it is not surprising that professional executive search firms are in great demand. Specifically, recruiting the best C-suite candidates for the job can lead a company down the path to wild success as compared to the almost certain failure that will result from poor hiring decisions.
The two main types of recruiting companies are contingency or retained firms. At first glance, contingency firms seem like the best deal for a company seeking to keep costs down. These companies only get paid after they successfully recruit and hire a new employee. While that sounds like an excellent proposition on the surface, it is not necessarily an effective solution for companies interested in hiring the best talent for the job.
Comparatively, retained search firms are more likely to successfully fill a mission-critical role, since they focus on client needs as compared to a contingency firm that works on many projects at once, with a low rate of success for the majority of the projects they work on. Retained firms are more likely to be successful since they strategically approach each search with a focus on technical experience, core values, soft skills and cultural fit. Companies who want to find top executives must be willing to pay experts for the services they need, effectively retaining the services of a search firm and paying them up front to make the client’s search needs a top priority.
1. Saves time and money
The time it takes to conduct a first-class search for a c-level employee is substantial and can take away from other important in-house HR responsibilities. HR professionals who have many other duties to perform in addition to recruiting often feel like the search for top talent is like having a second full-time job. Whether a company is recruiting a CEO, COO or VP, a retained search team can save them considerable time and money.
While the fee for conducting this type of search can be as much as 30 percent of the annual compensation package associated with that position, it is still a bargain when the cost of a bad hire or a position left open for too long are likely outcomes without the help of expert search professionals. The damage that can be done by hiring the wrong person can be significant. When a company is forced to part ways with a new executive who was recently hired, the consequential instability, downtime, and interruption in leadership can have a dire impact on productivity and morale.
When a company conducts a traditional search for a COO, CEO, VP or another c-level manager, they often run ads, review resumes, and conduct preliminary phone interviews. Considering the large number of candidates interested in attractive, c-level opportunities, HR departments are easily overwhelmed by the sheer amount of paperwork that has to be reviewed.
One drawback to this type of in-house search is that the best candidates may already be gone by the time HR reviews their resumes and credentials. It is a known fact that good candidates don’t stay on the market long.
Since retained executive search firms only accept a limited number of searches, they can devote the focus necessary to fill a position in less time without the diversions that in-house staff members face on a daily basis. There is no substitute for the specialized services of professionals who spend all their time networking and building a referral base.
Managing the hiring of a new executive is not a simple process. These delicate negotiations can fall apart at any time without expert and deliberate attention to every detail. Executives have a lot at stake when they move from one company to another.
Change is stressful. For this reason, a new executive recruit requires a lot of time and attention during the recruiting and onboarding process. Until the new recruit has tendered his resignation at his prior company and has officially started the new job, there is a risk that he will decide to back out and stay comfortably where he is.
2. Opens up the search to passive candidates who will not answer employment ads
Retained search firms go beyond what inside-HR departments and most contingency search companies are capable of doing. One of the most effective strategies that retained firms use is to recruit executives from industry competitors via introductions over lunch or other discreet meetings after regular work hours. Many executives will entertain a new opportunity only if they are approached in a discreet and professional manner, knowing that any sign of disloyalty before they give their official notice might harm their career if they decide to stay where they are.
This type of careful and deliberate approach takes time and excellent people skills. A retained recruiting company knows how to leverage contacts with finesse to get the necessary names and contact data they need. It can be almost impossible to reach people by phone these days. Personal introductions in other social settings may be the only way to connect with busy executives who are perfect for key executive positions.
3. Protects the confidentiality of the hiring company
Under the best circumstances, positions open up due to promotions and retirement. On other occasions, an employee is underachieving and must be replaced. In this situation, it pays to conduct a confidential search to keep the underperformer in the job as long as possible, thereby minimizing the disruption of operations until the company is ready to make a smooth transition to the new employee.
A retained recruiting company can work behind the scenes and recruit a new executive without alerting the rest of the company. Confidentiality is required for a seamless transition, especially in situations where a high-level executive is being replaced. There can be serious ramifications when an executive preemptively finds out he may be losing his job.
Another reason confidentiality is crucial is in situations when an executive is recruited from a partner company where it is important to keep relationships friendly and cooperative. For obvious reasons, it is best that any recruitment efforts remain confidential.
4. Harnesses unique expertise, skills, and contacts of a search firm that are unavailable in-house
Search firms involved in executive recruitment are in a position to hire outside the hiring company’s network, which means they can be instrumental in broadening the search to include candidates with different types of backgrounds. Diversity has become a prized asset for companies interested in fitting into an increasingly global marketplace catering to different cultures. Times have definitely changed for the better with companies opening their hearts and minds to a more diverse workforce.
One of the main benefits of retaining the services of a recruiting firm is that the firm’s networks that have been established over time are now a resource that can be leveraged for the benefit of the hiring company. Due to the nature of the search business, there is no doubt that these types of search companies are in an excellent position to work with their established network and reach a wider audience than the typical in-house recruiting team.
Professional, 24/7 recruiters are likely to know the companies where they can find executives who are looking to make a change. As an insider, privy to industry secrets, it is much easier to know exactly what the top industry talent wants and which competitors are vulnerable and can be exploited as a result. Networking in social situations such as lunch or dinner is an excellent way to gather this type of information.
5. The company needs a strategic advantage to hire the best person possible for the job
When companies are in trouble or struggling, they are often desperate for new leadership to save the company. As dire as this reason sounds for retaining a search agency, companies look for new leadership to bring fresh ideas and processes for their organization’s new path to success. for the organization.
Recruiters who are well versed in the industry can offer guidance to client companies about how best to attract new leadership and find passive candidates. Recruiters spend their careers listening to what executives want. Since it is not always easy to entice an executive away from a stable company to take on the challenge of an unknown entity that needs rescuing, search consultants can advise clients about what it will take to get the talent they want.
Anyone successful in the field of executive recruiting has learned how to persuade other people to make life changes. This is a skill that is extremely valuable and necessary for any company who hopes to hire the best.
Conclusion
A company is no more or less than the hard work and vision of its leadership. Essentially, companies evolve or devolve based on the wisdom of their hiring practices. Astute company managers recognize the fact that the process of hiring key players must be taken seriously and viewed as some of the most important decisions made on behalf of the organization. Retaining the expertise of professional executive recruiters is an excellent investment in the future of any business.
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