Have you identified the need to fill a critical executive level position…one that will play a key role in facilitating your strategic business objectives? In a highly competitive and dynamic business environment, selecting an executive with the appropriate skills who will contribute as a key team member is crucial. However, finding and recruiting senior level talent is becoming increasingly difficult.
Given the high cost of a poor hiring decision and the importance and timing of finding the right person, many organizations choose to engage an Executive Search Firm. As a specialized branch of management consulting, Executive Search Firms are experts in assisting clients with the critical and challenging task of bringing top executives into an organization.
Unfortunately, many organizations fail to properly qualify Executive Search Firms, often with disastrous results. An under-qualified executive could be hired, or a critical position could go unfilled. In both cases, the bottom line will be impacted…either through lost revenue, or the inability to achieve strategic business objectives.
The following list of questions (and answers) has been developed to assist in the identification and selection of an appropriate Executive Search Firm. A firm/consultant’s responses will allow you to effectively assess their experience, competence and potential to achieve a successful outcome.
1. What are your firm’s industry focuses – who are some of your current clients?
This determining factor allows an organization to assess a firm’s market and functional knowledge relevant to their specific situation and need. One must have confidence that the consultant knows where to look for the top talent, and how to engage and recruit them. This knowledge usually comes from conducting similar searches and understanding the nuances of your particular market. Confidence that your selected consultant knows the territory will support a cohesive and functional client/consultant relationship throughout the course of the project.
2. Who will be doing the work; how is your firm structured?
Given the consultative nature of search, it is critical to determine how involved and engaged the lead consultant will be during the course of the project. Will the consultant who sells or ‘pitches’ the assignment do the majority of the work? Is the research and candidate development conducted in-house, or outsourced to a third party? Does the firm have the appropriate project management and communication tools to ensure timely and accurate feedback? Who, exactly, will be accountable for your specific project? It is critical that your choice will be engaged and hands on.
3. How many searches does the consultant handle simultaneously?
Here is a good question to ask as a follow up to the previous discussion. A consultant handling six or seven projects at one time is average. Once it gets above that number, quality will drop. You need to be comfortable that your project is going to receive the time and attention needed to be a success.
4. What percentages of searches are successfully completed? Is there a guarantee should the placement fail?
The industry average for completing projects is between 65% and 70%. This is partially a result of cases when specifications and/or business conditions change, organizations restructure, or the skill set you seek does not exist. While there are many variables that can affect this number, a reliable number should be in the 75% – 90% range. The key here is to be wary of the firm that tells you that they have a 100% completion rate. This is not realistic!
Most firms offer at least a one-year guarantee to replace a candidate who does not work out for reasons that should have been foreseen (i.e. excluding illness etc.).
5. What are the timing and key milestones of the process?
In most cases, executive level searches take between 90 and 150 days to complete. Most professional and competent firms/consultants will be able to provide you a well defined and detailed outline of their process and timeline. Typically, you should expect a detailed progress review, including a list of pre-screened and qualified candidate backgrounds between weeks four and six, and begin to see candidates face-to-face between weeks six and eight.
Note: Since the Covid pandemic, all early-stage and many late-stage intervierws are conducted on line..
6. What are the firms current “off limits,” i.e., where is a firm blocked from recruiting candidates based on existing client relationships?
This is a critical question to ask either large firms with specialty practice groups, or smaller firms focused on specific functions or market sectors. Firms typically cannot recruit from an existing client for one to two years after an assignment. If a large number of target companies (those where the majority of potential candidates are currently employed) are blocked, your ability to access a strong candidate pool could be severely limited.
You must also ensure that there is agreement with your chosen firm as to the length of time they may not recruit from your organization. Be careful not to let the fox into the henhouse!
7. How is candidate quality assured?
The lead consultant needs to have a clear understanding of the performance metrics and evaluation tools that will be used by you and your organization to judge candidates. It is important to have confidence in their abilities to understand both your organization’s culture and the scope and requirements of the position to be filled.
The search consultant must function as your agent in the market to both engage and recruit the best available talent. They must have the ability to recruit the best candidate for the job, not the best candidate looking for a job.
8. How and when are references conducted?
This has continually been a key issue and one that is fraught with pitfalls. Consultants must be able to reach beyond just career history and focus references on discussing competency, character and potential. References should be sequenced into the process. We recommend that at least two are completed before you decide on a final candidate. This will go a long way in eliminating the possibility of costly and potentially embarrassing problems later in the process! Final references should be checked with a combination of supervisors, peers, and subordinates, and with individuals other than those provided by the candidate. Keep in mind that while you may want to do ‘backdoor’ references yourself, in order to protect a candidate’s privacy, all references should be coordinated through your search consultant.
9. What is the search firm’s role in candidate negotiations and closing?
This is a crucial step, one in which a professional search consultant should be both comfortable and experienced. He/she must be able to effectively negotiate and communicate with both parties to achieve successful outcomes.
10. What are the fees and expenses?
Retained search firms typically bill between 30% and 33% of a candidate’s first-year total cash compensation, paid in three equal installments over the first three months of a search. Most firms bill you for all expenses directly attributable to conducting the search, and some firm’s bill for non-itemized, or communication expenses. Upon request, firms may agree to a flat fee, or a discount based on volume of work. In some cases, firms will tie the timing of their invoices to their successfully attaining specific stage gates during the search process, including linking a portion of the professional fee to the completion of the assignment.
11. Is the search firm accredited, are a member of an Industry Association?
There are several key industry associations for retained Executive Search Firms, the most visible and important being the AESC (Association of Executive Search and Development Consultants). AESC members comprise an elite group of top-tiered, retained Executive Search Firms. All members agree to abide by the Association’s Code of Ethics and Professional Practice Guidelines and meet strict membership criteria. Membership in the AESC is the only form of quality accreditation that exists for retained executive search consulting.
Regardless of size and scope, not every firm is perfect for every search. A professional search consultant, whether a member of a firm or a sole practitioner, must provide your organization with the tools, resources, and information to make a knowledge-based decision for the recruitment of superior talent. In order to have the confidence necessary to identify and recruit the best available talent to your team, I encourage all current and potential users of retained executive search, (regardless of pre-established relationships), to evaluate and interview face-to-face a minimum of two firms, prior to making a final selection.
Reliable and non-biased information on search firms (locations, practice specialties, scope of services, etc.) is available at the Association of Executive Search Consultants www.aesc.org
We also invite you to learn more about Cornerstone International Group’s Retained Executive Search services.