Employers typically use an executive search firm when a top job opening is important enough, senior enough and when discretion is at a premium. There are times when your gut simply says that a C-level executive opening will be tough to fill. Sometimes a start-up has hit the hockey-stick inflection point in its growth and needs more experienced leadership to scale. All of those are good reasons to turn to a trusted retained executive search firm. But how do you know if you’re really ready?
“I use the word investment for a reason,” said Krista Bradford, founder and CEO of The Good Search, in a recent report. “A retained executive search will likely cost you a minimum of $50,000 and averages $100,000 or more — one-third of a candidate’s first-year total cash compensation. Typically, these are senior-executive roles with salaries averaging $300,000 or more.”
If an executive search has to be worth the investment, how do you do the math? “The importance of a senior executive role can be measured financially,” Ms. Bradford said. “How much money might this executive make for your company? If you don’t find the right person, how much money might this company lose? If the cost of not filling the role with the right candidate is significantly higher than the cost of the search, then you may be ready to consider investing in the services of a retained executive search firm.”
Is the Time Right?
Retained search is not right for every search every time. Some roles are simply not important enough for that kind of investment. In those cases, you don’t use an executive search firm. “I often brainstorm with senior executives about ways they can build their teams without incurring the expense of an executive search firm,” said Ms. Bradford. “You can get a lot of lift with employee referrals, job postings, and LinkedIn. If you need support, a recruiting research practice like our firm Intellerati could help you develop a list of potential candidates with biographies and contact information.”
Krista Bradford is founder and CEO of The Good Search in the Greater New York City area. Ms. Bradford has recruited board, senior executive and technology luminaries to clients that range from startups backed by top-tier venture capital firms to Fortune 100 corporations counted among the most powerful and successful media and technology companies in the world. She also leads the firm’s recruiting research practice Intellerati.
“They can even qualify the candidates for you,” she said. “But ultimately you have to have the time and bandwidth to do the recruiting yourself. Recruiting top performing executives is labor intensive, complex and requires a rare set of skills and expertise. That is why retained search firms exist. In fact, they are in such demand that their average fee for an engagement has increased in recent years, despite disintermediation by LinkedIn.“
Ms. Bradford shared 12 common reasons companies decide to enlist a search firm:
1. Good just is not good enough. You require a senior executive candidate who is truly great.
If hiring top-performing talent is important to your company, a search firm can help you do the rigorous work required for game-changing hires.
2. The search is incredibly important at the senior executive level.
Searches for C-level positions that report to the chief executive officer usually are too important not to go out to a retained search firm. Executives at that level can make or break a company. A retained search firm can mitigate the risk.
3. You are seeking a candidate with a rare mix of skills.
If you have an important search in which you are seeking the proverbial needle in the haystack, a search firm can help get it done. Better executive search firms will deliver a slate of candidates with the right mix of knowledge, skills and abilities along with the requisite cultural fit.
4. You have a search for a senior executive position that you just created.
When an executive search falls outside your area of expertise, an executive search firm can plug the knowledge gap with their domain know-how. “If you have a new executive-level role to fill, your company may lack the institutional knowledge to know what kind of candidate you need,” said Ms. Bradford. “That is often the case for senior-level technology roles, such as a chief AI officer. Often clients come to us without knowing whether they need a candidate who specializes in deep learning or predictive analytics. Search firms that specialize in the functions and sectors that are new to your organization can help fill that knowledge gap.”
5. You have to replace an underperforming executive while he or she is still in the role.
For companies that need to line up a replacement while the senior executive is still in the role, search firms offer a much-needed veil of secrecy. “It is difficult, if not impossible, for a company to conduct a confidential executive search to replace an executive while he or she is still in the role,” Ms. Bradford said. “You risk having the incumbent find out. Search firms offer a cloak of confidentiality. When retained firms manage a confidential search, they can recruit candidates without even mentioning the name of the client company.”
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6. You have to recruit for a target company with which your company has good relationships.
If you need to recruit top executive talent from partner firms with which your company does business, the confidentiality that search firms offer helps avoid ruffling feathers.
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7. Your senior leadership team lacks diversity.
Because women, Black and Latinx candidates are not well-represented at the senior executive levels, search firms can help level the playing field by conducting original research to ensure equal opportunity for all candidates.
8. You lack internal bench strength and have few successors to your senior executives.
If you sense a key executive might be on the verge of leaving or that you could benefit from top-grading, a succession bench help you tee up executive hires in advance of need. “Developing a bench of external candidates as possible replacements for your executive team is a best practice,” Ms. Bradford said. “This is especially important for key roles that would impact the company’s ability to operate. Identifying and prioritizing possible replacements for mission-critical roles is key. “At our firm, we develop online org charts of target companies, so clients can easily pick and choose the talent they wish to pursue as possible successors,” she said. “Clients often refer to online org charts, clicking into the biographies, throughout the process.”
9. You do not have the time or resources to take on an executive search.
If you already have too much to do and too little time, taking on an important executive search can quickly become its own full-time job. That is what search firms do.
10. You have tapped out your personal and company networks for candidate referrals.
If you have exhausted your network of connections for possible referrals, it is time to access another network. Executive search consultants are among the most well-networked people in the business.
11. You have an important executive search that is taking too long.
Whenever a search takes too long, it is time to call in reinforcements to speed time-to-hire for challenging searches and those with compressed timelines. “If a search is taking more than six months, it is time to hit the reset button,” Ms. Bradford said. “We frequently have clients come to us after trying to fill a role for a year. To fix broken searches, a firm should review the ground that has been covered to inform the search strategy.”
12. You want to give your company a strategic advantage through better hires.
“Retained search firms are in the business of delivering top performers — the 20 percent that are so effective they are responsible for 80 percent of the results,” Ms. Bradford said. “Anytime you have a senior executive search, it is an opportunity to trade up to a top performer and to drive results.”
Search Consultants Weigh In
“Search firms are an extension of the organization needing a search, not a replacement for leadership development or succession planning,” said Shawn Hartman, VP and COO of education-focused executive recruiter Academic Search. “Search firms can often help facilitate difficult conversations around equity and inclusion, poor performance, and other challenging scenarios.”
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“However, and in most cases, they simply bring a subject matter expertise that does not exist in the organization’s current recruiting structure,” he said. “Search consultants often become a partner with their search committee and, as a trusted advisor, will often provide ongoing support after the search is concluded.”
“Executive recruiters have the ability to identify, contact and engage talent that is beyond the reach of employers who elect to go it alone,” said David Ris, principal at The McCormick Group. “And complete the process quickly.”
“If a company is searching for an executive whose skills are in high demand and specialized, they gain a great competitive advantage by engaging a boutique search firm,” said Joyce Brocaglia, CEO of Alta Associates, an executive search firm specialized in cybersecurity and IT risk leadership. “Our cybersecurity specialty and deep trusted industry relationships allows Alta Associates to identify candidates that have the specific nuance of skills that companies are looking for when hiring a chief information security officer. And because we know the market so well, we are able to deliver a diverse and qualified slate of candidates quicker than any contingency firm or internal recruiting function.”
“The added value that a specialty firm brings is their expert advice regarding the job description, reporting structure and competitive compensation guidelines,” she said, ” Also, 50% of Alta’s searches are filled with diverse candidates. So if finding underrepresented candidates is a priority, clients will benefit from partnering with a search firm that has a track record of diverse placements.”
Andrew W. Mitchell, Managing Editor
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. Original post here.