When to Use an Executive Search Firm
You have a C-level executive opening. Your gut tells you a VP-level search will be incredibly hard to fill. Your startup has hit the hockey-stick inflection point in its growth and needs more experienced leadership to scale. Those are all good reasons to turn to a trusted retained executive search firm. But how do you know if you’re really ready?
Retained executive search is all about value. Employers use an executive search firm when a search is important enough to warrant the investment.
That is the right time to use an executive search firm. 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? Is 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.
If it is Not Important, You Don’t Need a Search Firm.
Retained search is not right for every search every time. There are some roles that are simply not important enough for that kind of investment. In those cases, you don’t use an executive search firm. 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.
If you need support, a recruiting research practice like our firm Intellerati could help you develop a list of potential candidates with biographies and contact information. They can even qualify the candidates for you. But ultimately 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.
Reasons to Retain a Search Firm
What follows are the common reasons companies decide to use a search firm.
1. Good just is not good enough
You require a senior executive 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 important
Searches for C-level positions that report to 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 Require a Rare candidate
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 created a New Position
If you are seeking a senior executive for a role you just created, it may be time to retain an executive search firm. 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 Must replace an executive
If you have a senior-level executive who is under-performing, a retained search firm can conduct a confidential search while the leader is still with the company. Search firms offer a much-needed veil of secrecy for companies that need to line up a replacement while the senior executive is still in the role.
6. Your target is a Partner Firm
If you need to recruit top executive talent from a partner corporation with which your company does business, the confidentiality that search firms offer helps avoid ruffling feathers.
7. Your Company 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. You Need a Succession bench
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 Can’t do the 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 run out of prospects
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. A search is taking too lonG
Whenever a search takes too long, it is time to call in reinforcements to speed time-to-hire for challenging searches and those with compressed timelines.
12. You Need Stronger Executives
Retained search firms are in the business of delivering top performers — the 20% who are so effective that they are responsible for 80% of the results. Anytime 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.