What are the top 3 reasons to use Executive Search?
In a world in which information is so freely and readily available, many may question the need or requirement for Executive Search firms. As the world continues to evolve and as automation becomes the norm, it would not be illogical to assume the same fate is to be met for Search firms. However, this is where you would be wrong. The Executive Search industry has continued to grow continuously and has consistently adapted to new market challenges, the entire Executive Search market is up by 4.2% on a like for like basis against GDP growth for the same period of 2.0%.
In this article we highlight why this is the case and subsequently why your business should consult the experts in Executive Search for your next senior appointment. There can often be confusion as to what separates Executive Search firms from the high-street recruitment agency, this article will also address that question. If you are considering using an Executive Search firm for your next senior appointment here are the 3 key points to consider. Market Intelligence and Expertise Whilst it is indeed true that the world in which we now live in has readily available data and information at their fingertips, this does not necessarily correlate with expert knowledge. Whilst the information may be available, it is how you are able to use such information that holds true value. An Executive Search consultant may be looking at the exact same piece of information as yourself, however, may see elements that you do not. These elements can be the difference in what constitutes a good candidate from a great candidate. This is where Executive Search firms come into their own, their market intelligence is such that it enables a consultant to target the necessary areas to investigate in order to find the right candidates for their clients. You may be under the impression that anyone with a set of data and information could achieve the same task, but this would be a false assumption. We have already conceded that information and data is readily available to all, however the key word in this discussion is market intelligence. Candidate information is easily accessible through mediums such as LinkedIn but this does not give a full indication of this candidate. Their achievements are visible but their cultural fit to your business is not. In other words, whilst general information is often available freely in every sense of the word, information that is sufficiently specific, validated and well presented to be of real use to decision-makers often requires a specialist market intelligence provider.
The Executive Search firm’s specialist market intelligence enables them to accurately pinpoint the candidates that match the needs of their client’s business, this extends far beyond their LinkedIn achievements. Through this market intelligence the Executive Search firm are able to assess the cultural fit of the candidate, the candidates career trajectory and to understand their market worth. This ensures that every candidate that is placed in front of their client is one that is of absolute interest, allowing the client to be sure that when they make their final decision they can be confident that they have truly chosen from the best possible candidates. This leads on to the subsequent reasons for using an Executive Search firm to hire your senior appointments. Executive Search firms obtain this market intelligence, to ensure only the best talent is put in front of the client, through their extensive resources and infrastructure, their credibility within the markets they serve and the approach in which they take when attracting the top talent within the market. This ultimately leads to a partnership between the client and the search firm in order to guarantee success on their appointments. Expertise and Credibility A search firm can have all the resources available to them, but without credibility in the markets they serve, those resources do not count for much. This is where the expertise of the consultants is paramount. Their expert industry knowledge and understanding of the markets in which they operate enable consultants to create a catalogue of candidates that they can turn to when instructed on a new mandate. However, this is not the same as when a recruiter turns to their database of thousands upon thousands of outdated CV’s, but this issue will be explored later in this piece.
What is the benefit of credibility and expertise to the client? Well, it seems trivial to point out but it cannot be overstated that the credibility of a firm is key in developing relationships with candidates and clients. The benefit to the client is such that; they can be rest assured in the knowledge that the firm and the consultant working on their mandate has professional relationships with the top talent they are hoping to attract. This enables the consultant to entice potential candidates in taking an interest in the client’s organisation. The credibility of consultants and the firm as a whole comes from their expertise and knowledge of the industry they operate in. In the very best firms, the consultants will be experts in their field, having extensive industry knowledge and extensive knowledge of candidates and clients whom operate in those industries.
Having the expertise and credibility is crucial when delivering a mandate, the value is such that clients will only be presented with candidates that are truly the top talent available in the market for the position they are recruiting for. This point also holds value for candidates as they can be sure the search firm focuses on their best interests as well as the clients. What truly shows the quality and credibility of a search firm is their ability to make a mandate mutually beneficial to all parties involved. As vital as it is to ensure the client is satisfied with their appointment, it is also crucial that the candidate is truly pleased and committed to their new role as if this is not the case, it could lead to a whole manner of problems further down the line. How can a Search firm ensure that the risk of a costly bad appointment is nullified? Resources and Infrastructure It is important to remember the key reasons why clients may elect to use a search firm, they are either unable to allocate the resources necessary to adequately research a market or lack expertise within a market. For example, a client in the hospitality sector may wish to appoint a candidate into their business who has a specific set of skills, seldom found in their market, therefore they wish to look further afield for this person but may not know which sector this person may be in, whereas the Executive Search firm has the expertise to know where to find this candidate. Executive Search firms have the necessary resources and infrastructure to undertake an in depth and wide-reaching search of the market for candidates that suit the needs of the client. The Search firm has the resources and knowledge to understand the relevant industries in which to focus their search. For example, through their market intelligence, as discussed earlier, the consultant will know which sectors will complement their client’s sector, enabling them to ensure that all of the talent that may be suitable for this position are mapped and screened.
They are able to do this as the firm has the resources and infrastructure in place to enable a wide-reaching assessment of top talent. If a client were to undertake the search themselves, they may lack the time necessary to conduct a comprehensive search of the entire market of talent which could lead to the appointment of the best candidate that was actively looking for a role. However, this is not necessarily the best candidate for the position. This is because when an organisation makes senior appointments through their own talent acquisition teams, they often lack the resources or infrastructure to contact ALL of the talent. What can occur is that the talent acquisition teams contact candidates that are readily available, but they are often readily available for a reason.
By this it is meant that the Executive Search consultant is in regular contact with a wide network of senior candidates across a wide range of sectors and disciplines who are not actively seeking a new role. This means that the consultant can contact the candidates that are not looking to move from their current position often because they are happy where they are and are over achieving in their current post. Thus, if a client elects to make their appointments using their resources it is likely they are only getting access to the pool of candidates that are actively seeking a new opportunity. Consequently, they are thus missing out on truly quality candidates that the search consultant has access to through years of networking.
The search firms purpose is to find the very best talent available for their clients and therefore the resources and infrastructure are in place to ensure that consultants working at the firm have the means necessary to create long lasting relationships with candidates. Why is this beneficial to the client? As touched upon above, it is these long-lasting relationships that enable the consultant to interest the candidate in the role their client is looking to appoint. Without this relationship, the candidate would not even be aware of the client’s role as they are not actively seeking a new position. It is the consultant that creates the interest in the role and in the organisation as they act as a brand ambassador for their clients, representing the client’s business in front of the candidate.
In house talent acquisition do not have the resources and infrastructure available to continue to nurture and develop these long-lasting relationships that ultimately are the deciding factor of whether or not a candidate will register an interest in your role. Without the necessary resources and infrastructure that a search firm has at their disposal, these relationships would not be possible and would ultimately lead to the client missing out on the truly top candidates available in the market and instead appointing the best of what was readily available, which is not the same as appointing the best talent in the market. As a direct consequence of this situation, it is likely that the organisation will not be satisfied with their appointment and thus will eventually look to replace their appointment, costing more money in the long run. Oxford Economics found that it costs an employer more than £25,000 due to loss of productivity when making a new appointment, this is due to the time it takes for a new appointment to get up to speed with the business. Now, couple this with making the wrong appointment and having to rehire from the beginning, this figure becomes £50,000. Perhaps the expert Executive Search fee wasn’t so large after all… The Service In the face of automation, Executive Search has the upper hand over your high street recruitment agency. With forecasts expecting around 20% of UK jobs to be lost to automation by 2030, there is a key reason as to why Executive Search will survive Wall-E and his army of robots, the service. Unlike contingency recruitment, Executive Search focuses on the establishment of relationships between their clients. This is beneficial in a plethora of ways, but the main advantage is that the Search firm can fully understand the need and the culture of the client’s business. This is imperative for both the client and the Search firm, since if the cultural fit is not correct, it does not matter how credible and talented the candidate may be, they will not succeed in the client’s business.
Along with expertise of the market that was discussed above, this understanding of cultural fit, which comes from the service offered by the Executive Search firm, is one of the primary reasons as to why Executive Search will survive automation and always be distinguished from your average recruitment agency. Your average recruiter will be purely contingent, meaning they do not get their agency fee until they place a candidate in a role. What does this mean for the client? Ostensibly, it means that the client only has to pay a fee when the recruiter successfully places a candidate and they begin working for the client. This seems favourable, payment on success, that makes sense you may think. Well, yes, it does make sense, however, because the agency only receives their fee from the client upon the placement of a candidate, this means 90% of the work the recruiter does is unpaid by the client. In the majority of cases this results in 90% of the work in a recruitment process being rushed to get towards that final 10% when they finally get their fee. For the client, this means that they have paid a fee to receive only 10% of the service. This does not seem like a good investment.
Further to this, as the recruiter wants to speed through the 90% of work that is unpaid, it is likely they will simply go to their database full of thousands and thousands of CV’s and simply send vaguely appropriate ones to their client, hoping one will stick. When you go through a recruitment agency, the fee you are paying is essentially for access to their database. Now, this does not mean when you pay for retained Executive Search services you are not in part paying for their network of candidates. However, you would be mistaken to equate the two networks as the same. The network the recruiter operates in is one of available candidates in that moment. This means when they fill your role, the candidate placed is often, not always, one who was actively looking for a new role. What can this mean? It could mean a number of things, they were unhappy in their role, they had limited progression opportunities, or it could mean that they were underperforming, could not handle the pressure and did not hit targets.
This is where the difference between a recruiter’s network and an Executive Search consultants network is made explicit. An Executive Search consultants network is full of candidates whom are not actively looking for a move away from their current role because they are performing well and happy in their position. You may raise the valid question, ‘what good is a network of candidates not looking to move?’ as discussed earlier in this piece, the value of this network is paramount. For months, sometimes years, the consultant at the search firm has been building relationships with candidates so that when the right opportunity becomes available they can at least get the candidate interested in the client’s business. This is the service the client is paying for, the consultant and the Search firm have the power to influence the candidates to take an interest in the clients role, a task that the client would not be able to achieve, since a cold approach from an internal recruiter within the client’s business does not have the same effect as a warm approach from a consultant whom many candidates regard as an industry friend. These are candidates the client nor a regular high street recruiter would not be able to access, never mind interest in a role.
Returning to the contingent nature of your average recruitment agency, there can often be a dichotomy of expectation between client and recruiter. When you retain the services of an Executive Search firm both parties are clear on the service expected and desired, the retainer is a symbol of trust between the firm and the client. It indicates to the Search firm that you are committed to them and have faith in their process. This also allows the consultant to immerse themselves into the client’s business, so they can act as a brand ambassador when contacting candidates and ensures that expectations will be met on both sides. The trust that comes from the retention of services is paramount to the consultant, it shows the client is committed to them, therefore, they are committed to the client’s business. As discussed earlier, a Search firm has a wide pool of resources available to them when conducting a new mandate, upon the retention of a firm’s services, these resources, such as the expert internal research team within the Search firm will begin mapping appropriate candidates for the position. Due to the resources available, the research team will be able to cover the entire sector and other comparable sectors in order to map only the best talent for the client’s position.
Every search is a new process, the database starts empty, CV’s are not plucked from the shelf like an old book. It is a search process. At every stage of the firm’s service, the Client is taken on the journey of the process, the benefit of this is that at any point during the process, should the client wish to alter the brief of what they were initially looking for in a candidate, the firm can be flexible to these needs and alter their search accordingly. This nullifies the possibility of a candidate being put in front of a client that is not suitable for the brief or position. With four in ten employers (39 per cent) admitting that the interviewing and assessment skills of their staff should be improved, the Executive Search firm takes care of this in the early stages of the process. Therefore, the client only sees the very best talent for their role, thus making their final decision competitive as all candidates that go to the final client interviews are entirely suited to the position. At the fundamental level, that is the goal. But the process as a whole is one that is designed, by definition, to be executive. For the client this means welcoming the very best executive into their business and for the Search firm it means the hope of retaining the client’s services for their next senior hire. The process is designed to form a relationship between client and Search firm that is mutually beneficial, fruitful and long-lasting. This is what distinguishes a recruiter from an Executive Search firm and is the primary factor as to why Executive Search will always be a valued service by businesses.
If you would like to find out more about Executive Search or would like to speak to a consultant, feel free to get in contact with us. Our contact details can be found on our website at www.barrettclark.com we look forward to hearing from you.