How to…Get the most out of an Executive Search Firm
By Lisa Cheong
The search for great talent is often a long and arduous process. Not only can one bad hire cost your organisation time and money, but for senior positions, it may also cause your organization to lose its competitive edge and even weaken business relationships.
This is why organisations are turning to executive search firms for assistance in attracting, interviewing and hiring mid- to senior-level employees. In the past, cost factors meant that these services typically remained in the realm of larger organisations. But now, even smaller and mid-sized firms are starting to recognise the benefits of hiring recruiters for tasks that range from crafting compelling job descriptions, generating a pool of qualified candidates, vetting references and speeding the hiring process.
When is it beneficial to engage an executive search firm? There are many reasons why it is beneficial for companies and HR practitioners to do so. The most common reasons are due to attrition or expansion, and companies are looking for suitable talent to fill in the headcount gaps. Other times, companies look to recruitment firms for knowledge into a niche or specialisation where HR practitioners may not be familiar with. For instance, a company that is venturing into a new business industry may not have a good pool of candidates to pick from. In instances like this, organisations may want to tap onto recruitment firms and their wide range of contacts.
The need for discretion is also one reason why companies are opting for the services of search firms. For certain key positions, companies may need to keep their search discreet, and hiring a third-party vendor may enable them to keep their search confidential. In fact, some companies engaging the services of executive search firms may do for proactive reasons.
Even though the organisation may not have an opening, executive search firms can help create a list of desirable candidates for the company and keep close tabs on their careers as well. However, for this to be possible, there needs to be a strong relationship between the client and the search firm, especially if the search firm is privy to its client’s changing HR issues and is included in its succession-planning meetings.
The selection process
Search firms come in various sizes, from companies which span across the globally or across the region, to boutique firms that only specialise in a particular niche or industry. One consideration HR practitioners have to bear in mind is the various types of search firms and how they structure their fees.
- Contingency firms: These firms are transaction-driven, meaning that they only get paid if the organization hires the candidate they put forward. As a result, these firms typically focus on a mid- to lower-level positions, as they prioritise their time and energy on realistic opportunities. Contingency firms are typically paid a certain percentage of the hired candidate’s salary.
- Retained firm: Driven by an exclusive relationship with the organisation, a retained search firm is hired for a specified time period. Retained firms usually scout for senior-level management positions where there are fewer qualified candidates. As for compensation, retained firms are also paid a certain percentage of the hired candidate’s salary (although the figure is higher than contingency firms’) but also are paid regardless of whether the candidate is hired or not.
- Hybrid firm: A blend of contingent and retained firms, container firms usually paid an upfront fee to initiate the search process. If the position is filled, organizations would pay the search firm a percentage of the candidate’s salary.
But whichever type of search firm you choose to go with, the selection process should be based on several factors, which include:
- Expertise: Does your headhunter or search firm have the requisite knowledge or experience searching for candidates in the particular field? Is your headhunter or executive search firm well-versed in your industry’s trends and knows what skills are in-demand?
- Speed: How quickly can your headhunter or search firm work relative to your hiring needs? At the same time, the organisation needs to be realistic about the quality of the search given the time constraints they are working under.
- Representation: Is your search firm able to portray an accurate representation of your business in the
- marketplace? Is your headhunter or recruiter able to sell your employer brand well, or even create a compelling proposition for candidates to make them want to join your company?
- Communication: How well does your headhunter communicate with you? Are there frequent updates to keep you informed on the progress of the job search?
- Deliverables: What are the metrics in which the recruiter would be measured against? Some benchmarks include number of days to first submittal, number of days to fill a position, retention rate, average salary of filled positions, interview to offer ratio.
During your due diligence process, you should take some time to check their references. Doing so may involve contacting several candidates who found jobs through the search firms to understand how the candidates perceived the recruitment process. How did the recruiter present the opportunity? How well did they represent the client and the job offer?
The best foot forward
Good HR practices are built on good business relationships, and the recruitment process with your selected executive search firm is no different. Here are some tips on how to enhance your working relationship with your recruiter.
- Be focused on your results and what you want to achieve. Instead of listing down all the traits that would be nice to see in a candidate, being focused on your priorities can help your recruiter narrow the search to help you attract the candidate that best fits your organisation.
- Be a good communicator. If you see that the recruiter isn’t getting the right candidate profiles early on, providing prompt and thorough feedback will allow recruiters to make changes swiftly.
- Establish accountability. Appointing a person within the company who will take charge for the recruitment process will help ensure that all communication is focused and well-managed.
- Allow your recruiter access to the senior executive team and workplace. This allows the recruiter to better understand your organisation’s culture, its values and people to determine if a candidate would fit well in the company.
- Be decisive. Good people who fit into your organisational culture are is always hard to come by. However, candidates who are highly-sought after would usually have several competing offers. Thus, it is important that HR practitioners work decisively and quickly to ensure that your candidate is not lost to a competitor.
In the end, a good recruitment process requires trust, communication and commitment from both parties. Only through this would your recruiter be able to help your organisation win the war for talent by attracting, hiring and retaining the best employees out there