Top Executive Search Firm Selection
If you have been tasked with search firm selection, naturally you want to find the top executive search firms for your company. While the definition of “top” differs from company-to-company, there is a way you can discover which companies are ideally suited to your organization. To find the top search firms, apply 3 filters: the basics, the values, and the competitive advantage. Most firms that specialize in your sector will pass the basic screening questions. The values filter will winnow that list down to a short list of possible top search firms to use The competitive advantage questions will inform your selection so that you can pick the right search firm that outperforms all the others.
How to Identify the Top Executive Search Firms
When you conduct an Internet search for lists of questions to ask search firm, you’ll pull up checklists that cover the basics. An executive search firm must specialize in your industry or in the function of the position that needs to be filled. Check. They must have a good reputation and a strong track record of success. Check. They must be able to recruit from top target companies, which means they must not have those companies as clients. Check. They must have the bandwidth to take on your search and fees you can afford. Check and check. Questions to ask prospective executive search firm partners:
- Does your search firm have the capacity and geographical reach to handle our search? How so?
- Do you specialize in our industry and sector? How so?
- What client references can you provide?
The only problem with the standard “what to look for in a search firm” checklist is that it still leaves you with a long list of search firms from which to choose. It does nothing to help you winnow down your list to the best choice. You do that by applying the next two filters.
You deserve an executive search partner you can trust. While the retained search industry has long been a relationship driven business, these days corporate search buyers need more than a golf buddy or tennis partner. Your deserve an executive search firm that, in action and in word, demonstrates it is to be trusted. We recommended filtering for firms that have eliminated percentage fees and that share candidate information.
Traditional search firm charge a percentage of candidate compensation, which sets up a conflict of interest. Percentage fees provide financial incentive for the firm to inflate the compensation of the candidates that they recruit. Even though the Association of Executive Search Consultants has a Code of Conduct that states that “AESC members will avoid, or resolve through disclosure and waiver, conflicts of interest”, percentage fees remain an industry standard. However, there are firms that have eliminated that conflict and operate by flat fee. In addition to The Good Search, a handful of other firms charge flat fees including the global retained search Egon Zehnder.
Traditional retained firm refuse to provide that candidate research, making it impossible to know what they have done or who they have contacted on your behalf. They often do so claiming that information the information confidential, which is not true. There is a great deal of information that is not confidential — the kind of information you’d find on a basic business card — that they could report out to enable you to audit their work.
Values questions to ask prospective executive search firm partners:
- Does your search firm charge a standard percentage fee? If yes, why do you charge a percentage when that sets up such an obvious conflict of interest?
- What competitors of ours are clients of yours from which you cannot recruit? Are you willing to put that in writing?
- As a practice, do you provide clients with all the candidate research with contact information so that we can audit your work? If not, why not?
The Competitive Advantage
Last, there are questions about the firm’s unique value proposition. The firm must be different enough to offer you a competitive advantage. Search firms that conduct executive search the same way everyone else does — that have pretty much the same offerings and business model — lack the required ingredients for a competitive edge. When you use traditional executive search, you are using the same search firms and the same processes that your competitors use. Acting like your competitors is not how you gain the upper hand.
A Real Difference
Edge theory holds that change happens at the margins because it is free from the stifling orthodoxy of the center. In fact, experts have found that it is more efficient and more valuable to innovate from the edge than the center. While operating at the margins typically increases risk, in executive search it hold the potential to do just the opposite. Because 40% of retained search engagements fail to complete, the biggest risk may lie in doing search the same way that it has always been done for decades. The key to competitive advantage is filtering for executive search firms that search differently.
Of course, far too many search firms say they are different, but when you get right down to it they charge the same fees and conduct search pretty much the same way as it has always been done. We advise looking for search firms that have gone to the trouble of improving on the traditional search model. The questions to ask include “What do really do that’s different?”and “What expertise do you offer that I won’t find at other firms?”
Executive search requires a new kind of expertise to harness the power of data and to avoid becoming overwhelmed by it. If research is the execution engine of search, then data is the rocket fuel. A treasure trove of candidate data exists outside traditional recruiting resume databases and LinkedIn. That information can make search smarter, faster, better. Instead of uncalibrated candidates, data-drive search can start answering the question, “Who is good?” Moreover, data expertise is needed to wrangle the stunning amount of company , executive, and social network information to separate the signal from the noise. Increasingly, less qualified candidates are getting in the way of “the one” because you can’t see the forest for the trees. It is quite literally a problem of “too much information.” Other industries are investing in big data, data analytics, and more robust computer-assisted original research. A next-gen firm matches force with that trend.
Competitive advantage questions to ask prospective executive search firm partners:
- How is your firm do differently other search firm?
- What expertise do you offer that I won’t find at other firms?
- What have you done to make executive search process better?
- What, specifically, have you done to harness candidate information that doesn’t reside in traditional recruiting resources, databases, or on LinkedIn.
- What expertise do you offer that is different than other firms? What person on your team has data research and analytics expertise?