When Should I Use an Executive Search Firm?

When Should I Use an Executive Search Firm?

When to Use an Executive Search Firm

Generally, employers use an executive search firm when a search is important enough to warrant the investment. I use the word “investment” for a reason.  A retained executive search will likely cost you a minimum of $50,000 and averages $100,000 or more — typically one-third of a candidate’s first-year total cash compensation. Typically, these are senior-executive roles with salaries averaging $300-thousand or more.

First, it needs to be worth the investment

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. How much money might this executive make for your company? If you don’t find the right person, how much money might this person 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.

Retained search firm is not right for every search every time. There are some roles that are not worth making that kind of investment. I often brainstorm with senior executives about ways they can build their teams without incurring the expense of an executive search firm. You can get a lot of lift with employee referrals, job postings, and LinkedIn. But 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, despite the economic downturn, their average fee for an engagement has increased.

Companies and hiring executives retain executive search firms for any one of the following reasons:

1. Good just is not good enough. You require a senior executive candidate who is truly great.
If hiring top performing talent available 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 into 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 you 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.

5. You have to replace an under-performing executive while he 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.

6. You have to recruit for 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.

7. Your senior leadership team lacks diversity.
Because women, Black and Latino 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. Your 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.

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 to long, it is time to call in reinforcements to speed time-to-hire for challenging searches and those with compressed timelines.

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% that are so effective they are responsible 80% of the results. Any time you have a senior executive search, it is an opportunity to trade up to a top performer and to drive results.

The Good Search is a retained executive search firm in the Greater New York City area that specializes in media and technology. We are here to answer any questions you may have when you are ready to move forward with a search engagement.

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Top Executive Search Firms List: How to Build Your Own

Top Executive Search Firms List: How to Build Your Own

Top Executive Search Firms List: How to Build Your Own

A short list of the top executive search firms is readily available in the minds of most CEOs, Chief People Officers, Heads of Talent Acquisition. But what’s a company to do if the search firms on that short list start to come up short? What is a C-Level executive with an important opening to do if her current retained search firms are not delivering the value she needs? What if the search firms a board member knows are great at some searches, but not all?

Well, you used to be able to pull up The Directory of Executive of Professional and Executive recruiters published by Kennedy Information. That directory detailed the kind of search firm (retained or contingency) and the firms’ specialties, Yet it is no longer being published.

Directory of Executive & Professional Recruiters

The reason we thought we’d put together a list of the top executive search firms because the lists on the Internet are pretty haphazard. In fact, at least one of the sites appeared to be bogus.  TopExecutiveSearchFirms.com was created by a search firm that then inserted itself into the fake list of Top Executive Search Firms that the website made up. We’d been tracking this website for some time until ultimately we decided to contact the firm’s CEO and ask for a quote for a blog post on the phony site. Shortly thereafter, the site was taken down. (You can still find it in the Internet Archive.) This is just one pretty stark reminder that you cannot trust everything you read, especially stuff you come across on the Internet these days, alt-facts and one. One must always consider the source, and if that source is murky, be especially cautious.

In other words, as a best practice, it is always good to assemble your own list of Top Executive Search firms. To assist in that effort, we have a few suggestions.

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12 Reasons to Hire a Headhunter

12 Reasons to Hire a Headhunter

Hire a HeadHunter

If your company is experiencing dramatic growth or is in the midst of a corporate turn-around, chances are you need to hire a headhunter. The reason is simple: senior executive searches are simply too important.  Executive leaders at that level can make or break a company. Consequently, while the business landscape may change, the need for high-performing executives remains a constant. What follows are the dozen reasons to hire a headhunter.

Dozen Reasons to Hire a Headhunter

1. You require a top performing senior executive.
If hiring the best talent available is important to your company, a search firm can help you do the rigorous work required for game changing hires.

2. You have a C-level leadership opening that must be filled.
If bad things will happen if the role is not filled, or if the cost in lost revenues and missed opportunities is too high, a search firm can mitigate the risk.

3. You have a senior executive position that is extremely nuanced.
If you are seeking an unusual blend of knowledge, skills, and abilities along with the requisite cultural fit, a search firm can help you thread the needle.

4. You have entered a new market or created a new senior executive position.
When an executive search falls outside your area of expertise, an executive search firm can plug the knowledge gap with their domain know-how.

5. You have an incumbent executive that you need to replace.
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.

6. You need to recruit from sensitive target companies.
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.

7. Your senior leadership team lacks diversity.
Because women, Black and Latino 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. Your senior executive team could use some back-up.
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.

9. You do not have the bandwidth 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 network 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 to long, it is time to call in reinforcements to speed time-to-hire for challenging searches and those with compressed timelines.

12. You cannot provide concierge-candidate care.
If you lack the time or inclination to hold the executive candidate close through to hire, you risk losing the candidate to a competitor. Candidates often confide more in search consultants, enabling then to address concerns before they threaten a successful outcome.

An executive role needs to be senior enough to justify investing in an executive headhunter. Senior leadership positions that report into the Chief Executive Officer, including C-Level executive position ( COO, CFO, CMO, CIO and CTO) are usually too important not to retain and executive recruiter. As the dozen signs above suggest, there are a number of reasons to call in executive recruiting experts. The competitive advantage when you hire a top performing executive is often game-changing.  For executive search to be successful, it takes industry and functional insight, a rigorous process, and unrivaled access. Based in the Greater New York City Area, The Good Search is a retained executive search firm that outperforms traditional search firms by making executive search smarter.

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Idiotic Questions Not to Ask Executive Search Firms

Idiotic Questions Not to Ask Executive Search Firms

Questions Not To Ask Executive Search Firms

If you are shopping for an executive search firm to conduct an important senior-level executive search, don’t be fooled by the lists of search firm screening questions available for download on the Internet. Those lists are not entirely objective. Retained search firms have cleverly marketed lists of screening questions, that when answered, will lead you directly to their doorstep. Even human resources associations and other seemingly independent organizations often get spoon fed the same questions by a friendly search partner or firm. In other words, we suggest those cooked lists contain questions that are not in your best interest.

Of course, you might wonder, who are we to talk? That is a perfectly reasonable question. The Good Search is a retained search firm, after all.  However, we do not benefit from criticizing the concocted lists of screening questions — not when they promote the kinds of services we offer. However, The Good Search believes it is good business to help executive search buyers become more informed consumers.  I founded this practice because I believe there is a better way to recruit top talent. Executive search has to get smarter.

Still, when you get right down to it, it doesn’t matter who we are or what we believe. We simply suggest that you be on the lookout for bias in search firm questions and think about more relevant screening questions to ask. Draw up your own list of questions. To that end, I’d like to share my thoughts on a few of the common screening questions. Sometimes the obvious answer isn’t always the best.

Questions Not to Ask Executive Search Firms

  • How many searches have you conducted for this kind of role in the few years?

The implied preferred answer is that the more executive searches a firm has done for a similar role the better. Yet, that’s not necessarily the case. In retained executive search, the more identical searches a firm conducts, the more likely it is that they’ve done business with the companies you’d want to recruit out of for your engagement. Because they’ve done business with those target companies, they are likely off-limits to that firm.  In other words, retained search firms can’t recruit out of target companies that happen to be their clients. When they can’t go there then you can’t go there. Too many identical searches are not a good thing. In fact, search firms that rattle off a long list of similar engagements should be screened out, not in.

  • Will the executive search firm consultant I meet with actually be the one doing the work?

The implied preferred answer is “absolutely”, leaving the buyer with the impression that the partner is elbows deep in the engagement each and every day. However, every major retained search firm works on searches in conveyer belt fashion. First come the researchers who identify candidates, then come junior associates who qualify the candidates; and after that come the consultants and partners who do more in-depth interviews, assessments, and manage the engagement through its successful completion. Smaller firms and boutiques may cut out a layer or two, but teamwork in executive search is pretty standard practice. In our view, what is more important is whether those working on the engagement offer serious research expertise, business acumen, and added reach — the ability to tap candidates out of the grasp of other search firms.

  • What is your time-to-complete?

The most frequently measured metric cited by executive search clients is how long it takes to complete an engagement. But here, one must ask why that is. Often, a search firm has little control over how long it takes a company to schedule interviews and, ultimately, to make up its mind. A more telling metric is how long it takes a search firm to present the candidate who ultimately is hired. Without a doubt, finding, recruiting, and getting a top executive onboard in a timely fashion is tremendously important. Vacant executive positions exact a real cost in lost revenues, lost opportunities, overworked team members, poor morale, and increasing customer dissatisfaction. However, time-to-hire dominates because it is an easy metric to capture. Value is much harder to measure because it is qualitative. Yet value remains the most important metric of all.

 

What Does Executive Search Cost?

What Does Executive Search Cost?

Executive Search Firm Pricing

Search firm pricing is a top concern of executive search buyers. Whenever employers have an important board or senior-level opening to fill, it is reasonable to ask,”What does executive search cost?”

Of course, there is no easy answer: it all depends on how your company prefers to recruit and how important getting top talent is to your corporate strategy. The wide array executive search firms and recruiting services available means that executive search prices vary wildly.

However, I can give you a sense of what companies typically spend on an executive search by sharing common price ranges of various executive search services.

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Is Your Executive Search Firm Ready for Big Data?

Is Your Executive Search Firm Ready for Big Data?

The executive search industry has witnessed a dramatic shift in how board and senior-level executives are recruited. But what has not changed in how traditional retained search firms recruit. In fact, executive search “best practices” have stayed pretty much the same since they were first developed a half-century ago. And that’s a problem.

The average executive search firm lacks the data expertise to harness the power of Big Data. There is now a treasure trove of data available on candidates. However, in most cases, it is not current, it is not complete, and increasingly it is not structured. Moreover, there is so much information available, recruiters are suffering from information overload. Increasingly, they are missing top talent, not because the candidates are hard to find, but because they cannot see the forest for the trees.

Executive search “best practices” were never designed to deal with Big Data. In other words, the so-called “best practices” are no longer the best.  Moreover, traditional retained search firms haven’t invested in the serious research expertise needed to mitigate the risk and to harness the power of Big Data.

Wrangling all that information takes deep investigative and big data analytics skills — expertise you typically do not find in the world of recruiting. It represents both a threat and an opportunity.

(Of course, our retained search practice is wrapped around our robust research division Intellerati.)

We welcome your thoughts and comments on recent trends you’ve witnessed.

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What Are the Top Executive Search Firms in NYC?

What Are the Top Executive Search Firms in NYC?

The Top Executive Search Firms in NYC

We frequently get asked what are the top executive search firms in NYC  in the retained search firm industry. It is a common question we get asked by chief executive officers, board members, and venture capitalists. Every year, The Good Search meets with more than 100 buyers of executive search as does our executive search research practice Intellarati. Since we advocate for better executive search and recruiting practices and make our feelings known (on this blog and elsewhere), we frequently get asked for our for our insights on the best retained search firms in the Greater New York City area.

In the interest of objectivity and putting a little good karma out there, below is the listing of executive search firms in NYC that includes our competitors. These firms conduct senior executive search in the tristate region of Connecticut,  New Jersey, and New York.  While everyone has their favorites, these executive search firms have solid histories of providing Manhattan.

Question for the reader:

What do you seek in the executive search firms that you use? What qualities distinguish those that you consider to be among the best? We welcome your thoughts and comments . . .

What Are The Greatest Myths of Search Firm Selection

What Are The Greatest Myths of Search Firm Selection

What Are the Greatest Myths of Search Firm Selection?

Search firm selection is tricky business. Over the years, retained search firms have provided guidance to prospective clients on how to select a search firm. That guidance is a one way they market their services. The search firm selection document recommends using search firms that resemble the search firm offering the guidance. Yet a number of their assertions have been adopted as the gospel truth, when that simply isn’t the case.

Moreover, the track record of traditional retained search firms is underwhelming. 40% of retained searches fail-to-complete. An estimated 40-50% the executives who are recruited don’t make it past their first year. Clearly, something needs to change. A good way to begin is by exposing some of the myths regarding what an employer should look for in selecting an executive search firm. To search smarter, we must begin to challenge old assumptions and to think for ourselves.

Myth #1: You need to specialize in our industry

On the face of it, specialization seems to make sense. Clearly, you want a firm that understands your business and its players. But beware. Industry specialization sets up client blockage. A search firm, particularly the larger firms, will not be able to recruit from all your favorite target companies. The reason? A number of those companies are already clients of the firm.

Of course, the search firm will promise to tell you whenever there is a conflict. But why should you believe them? If they base their fees on a percentage of compensation, they already have demonstrated they are comfortable with conflicts-of-interest. The best way to avoid client blockage is to do business with boutique search firms.

Myth #2:  30% Fee is Acceptable

Retained search firms, on average, charge 30% of annual first year total compensation of the candidate they place plus expenses. While it isn’t technically price-fixing, don’t you find it strange so many retained search firms charge exactly the same percentage? Moreover, percentage fee sets up an inherent conflict-of-interest. It rewards any firm that artificially inflates the salary of the candidate they recruit. That conflict could be avoided entirely with a fixed fee.

Myth #3 – Find a search partner who knows all the best candidates.

If a retained search partner tells you they know “all the best candidates”, that simply is not true.  Great retained search partners work their sources the way a great reporter does. (As a former award-winning investigative reporter, I know a great deal about the care and feeding of sources.) But there is a theoretical limit to the number of people with whom we can have a social relationship. Dunbar’s Number. We humans top out at about 150 people and that includes teachers from schools and family members. Moreover, just because a retained search partner knows an executive does not mean he can recruit that person. Executives do not accept jobs just because a golfing-buddy headhunter told him. Conversely, do not assume that a candidate will refuse to engage just because they’re hearing from a recruiter for the first time. Gifted headhunters have ways of getting their calls returned, regardless. In light of the many ways we can reach out and touch a candidate, what seems to matter most is the ability to uncover all viable candidates. You usually don’t do that work from the 19th hole.

More on the myths in future posts.