How to Select The Right Executive Search PartnerBy Jennifer Silvester
5 Considerations to Explore When Selecting an Executive Search Firm
Every senior leader understands the value and challenge of building dynamic and effective leadership teams. Whether your organization is transforming due to growth, an acquisition, or other changes – you know your business will not survive or thrive without the right leadership team in place. According to The Conference Board CEO Challenge Survey in 2021, the majority of CEOs continue to report that talent acquisition is their most critical human capital priority and potentially their biggest impediment to achieving their goals. The changing labor market and shifting candidate/employee expectations are only creating further complexity.
So, when is the right time to engage a retained executive search firm to help? And how do you determine which firm will best meet your needs? The cost of getting it wrong can feel paralyzing.
If you are asking yourself if it is the right time to hire a partner firm, you are probably already suffering some level of failure. Too often, companies have already attempted a search on their own and either placed the wrong leader or have not had success. Perhaps even worse, you have hired a search firm already, but they are not performing. These are often the scenarios we see when a new client decides to engage our team. They are already struggling to fill a role, and the need has become urgent.
If you know you need an executive search firm, how do you choose the firm who is best equipped to successfully fill the role? Like many industries, there are large, global retained search firms that are well-known. Then, there are many small, boutique specialized firms. Who should you trust with what may be the most important hire for the business this year?
The good news is, there are many excellent large and small search firms, but you should take the time to carefully consider and get to know which firm is best for your current needs. It is important to note that the “right” firm may change from one leadership search to the next. We recommend curating a small network of firms you trust.
To help you make an informed decision and choose the right partner, consider evaluating the five following areas:
Level of expertise in your industry or function AND how they approach learning your business, culture, and roles.
While industry or functional experience is important, it is simply not enough to have filled a role several times or to understand a list of competencies on a job description. To succeed in hiring the right leaders, a firm must take the time to deeply understand your business, goals, challenges, team dynamics, core-values and more.
Most boutique firms, like S&C, are built on the principal that one-size does not fit all, and success is born out of our ability to understand our clients, adapt our approach, and then assess talent uniquely against all your needs, not just the technical competencies.
Pay attention to the questions a prospective firm asks (and those they do not). This is often the biggest indicator of a firm’s approach and ability to tailor a search strategy to your unique needs. If they do not demonstrate this proactively, ask the prospective firm how they will ensure they have identified candidates who not only meet the technical requirements, but the organizational DNA as well.
What is the firm’s reputation with both clients and candidates? Our brand reputation is intrinsically linked, choose wisely.
In a well-known study done by Virgin Media’s Talent Acquisition and Customer Insights team in 2015, candidates who reported having a bad experience with a company during the hiring process, 12% said they would severe their relationship with the company and tell others to do the same, while 35% who just had a neutral experience indicated they would not promote or refer colleagues to the company. At the time, Virgin Media calculated the loss of just the customer revenue associated with a poor candidate experience to be $5.4M annually.
Employment brand and the candidate experience is a critical factor to successfully attracting and hiring high-impact talent. When you hire a search firm, they are an extension of your company and your brand in the marketplace. You may naturally engage a well-known firm in the industry. However, ask a few candidates about their experience with that search firm and you will quickly learn they are relegated to junior recruiters or have a reputation for ghosting candidates. This firm will struggle to get the passive, discerning, great talent to engage. Ask your potential search firms for their approach to crafting a positive, value focused candidate experience. Better yet, ask them for their candidate Net Promoter Score (the percentage of candidates who are likely to refer them to a colleague).
At S&C, we take time to deeply understand your business, leadership, culture, and more. We take care to represent and even elevate your brand with the care you would expect from a trusted partner. Our team has carefully curated and nurtured our candidate experience throughout every step of the journey and set KPI’s and expectations to ensure we deliver on it consistently. Importantly, we measure candidate satisfaction through an NPS score and are proud to have 89% of our candidates (even those who do not get the position) who will happily refer us to a colleague.
Research strength and approach to identifying ALL potential candidates.
We are living through the most dynamic and rapidly changing labor market in history. A great search firm understands this and will deploy the resources to execute specific research to identify and uncover new talent. If a firm leans heavily on the number of times they have filled the given role and the breadth of their network but does not demonstrate their ability to apply resources and process to conduct fresh, custom research, beware. No firm, not even the largest, knows all great talent and the worst thing for you would be hiring a search firm who will just recycle candidates. This approach also tends to exacerbate the lack of diversity among executive leadership. New research and new recruiting/outreach are critical, for every search.
At S&C, we have a team dedicated entirely to research. Our team will assign a dedicated Research Associate to each position. Working closely with the Recruiter and Practice Leader, our Research team develops a tailored research strategy for every position that we share with our clients during our intake process. We map talent and push boundaries on the upper and lower limits of skill and expertise to ensure we deliver a highly targeted, qualified, diverse slate of candidates.
It is also important to understand the hands-off limitations of a firm. Typically, retained search firms follow an ethical code of conduct in which they will not directly recruit from any client company. If you are evaluating a medium or large search firm, they may already be supporting hundreds of competitors, suppliers, or adjacent companies which dramatically diminishes the pool of candidates they can target. Ask if they have any hands-off or conflicts of interest. If they do, be informed about who those conflicts exist with before deciding whether to engage with the firm.
Who will be leading the search and who will be on the project team supporting them?
This is one of the primary reasons a client might call us to take over a search from a larger firm. Clients often begin searches with large firms working with a Partner. They assume this relationship will continue and that the firm’s name recognition will be a key success factor. Unfortunately, we are engaged months later in the process when they discover the Partner has delegated their search to a junior person, and the results have not met their expectations.
It’s important to know that there are great, large search firms who do incredible work. But there are many who delegate, especially smaller searches with smaller companies to their junior recruiters. In the early stage of a search decision, make sure you have clarity in understanding who specifically will be doing the research, the recruiting, and the assessment.
Make sure your search will be led directly by a senior person, ideally by someone with their name on the door or a partner in the firm. An invested partner will see your success or failure as their own and will act with the matching level of accountability, attentiveness, and focus.
Every search we lead has a dedicated team made up of a Partner/Practice Leader, Recruiter and Lead Researcher/ProjectManager. These three are supported by a team of administrative and data management professionals to keep our process running efficiently.
Fees and Guarantees
A key difference between retained and contingency search firms are the fees and guarantees (more on this in a previous article, Retained v. Contingency Search). Among retained executive search firms you can count on a fee agreement to be like that of a consulting engagement. You are paying for the firms dedicated time, resources, and expertise on your search – the fee is not dependent on a candidate being placed.
That said, there are many guardrails in place to help you feel confident in your decision to invest in a retained search. For example, many firms will divide their fee into three equal portions – one at commencement of the search, one at candidate presentation, and the final fee upon an accepted offer. Other firms might do a time-based fee schedule. Look for firms that are comfortable charging their fees according to performance milestones.
Executive search firms also typically offer some level of warranty should they place a candidate who is not successful or leaves the company for cause within a certain window of time. Look for a partner who is willing to guarantee a candidate’s placement for the first year. Firms with this guarantee typically commit to doing the search again at no cost. You should not only understand a firm’s guarantee but also their retention metrics. How long does an average placement stay with a company?
At Silvester & Company, we guarantee our placements for one year and our retention rate is 75%+ of our placements are still with our client company three years later.
These are some of the fundamental questions that will help you assess a firm. Each question will help you draw conclusions about how invested the search firm is in creating a long-term, mutually beneficial partnership. Every firm will say they want this, but these questions will help you assess how much effort and attention they place into making that true.
The best client and firm relationships are those that are built over years, not months. Our best clients have been with us for well over a decade and 100% of our clients have come through referrals and repeat, long-time clients. With relationship longevity, we know your business, the history, the evolution, and the leadership team. We can move more quickly each time because we already deeply know one another and have become trusted advisors. We are partners you call on when you need us. Sometimes that is often, and other times it might only be once a year.
We are rooting for your success and act like a stakeholder. These relationships are our fuel, they inspire us every day and adds pride and meaning to our work.