| While recruiters will not discuss individual placements | | | | It is common knowledge that the best executives are |
| (especially those still in progress) they would be | | | | usually employed at the time of your search. They |
| pleased for you to know, in general terms, who they | | | | have little time to read or respond to nebulous, generic |
| are and what they do for their clients. With this | | | | advertisements, and they know that responding to |
| information, you'll be better prepared to recognize | | | | such ads can be risky. They would rather be |
| when you should seek the services of an executive | | | | approached discreetly by someone who knows of |
| recruiter in staffing your own operation. | | | | their reputation, knows the art of recruiting, and can |
| Rare Birds | | | | handle the hiring process professionally and |
| Within the wide-ranging field that encompasses tens of | | | | confidentially. |
| thousands of employment recruiting and placement | | | | If you lack a needed executive, you cannot fully |
| agencies, there are just 2,893 retained and | | | | respond to business needs and opportunities. When |
| contingency search firms: 1,153 retainer firms and 1,740 | | | | you factor this cost into the cost of mounting a search |
| contingency firms, according to Kennedy Publications. | | | | with your in-house department, using the specialized |
| Total revenues for these firms are a bit over $3 billion. | | | | and time-efficient services of an executive search firm |
| Executive recruiters are skilled specialists and paid | | | | makes good economic sense. And it frees you to do |
| accordingly. | | | | what you do best instead of what you must do under |
| Retained Firms: Great Service, and You'll Pay For It... | | | | duress. |
| Retained executive search firms are generally | | | | Their Expertise Has No Competition |
| employed to fill senior management positions. They are | | | | Executive recruiters are specialized professionals. |
| paid a retainer fee at the beginning of an assignment -- | | | | They work at the search process exclusively, on a |
| typically, one-third of the total fee. | | | | full-time basis, and survive on their ability to get results |
| Compared with contingency firms (which we will | | | | in a competitive marketplace. Most executive |
| discuss momentarily), retained fee firms play a more | | | | recruiters bring years of experience to their work, and |
| intimate and involved role in a series of events which | | | | are intimately familiar with every aspect of the job |
| ultimately lead to a hire. Access to top management is | | | | hiring process, from the initial job evaluation through |
| usually considered essential. | | | | negotiation and hire. |
| Then the search is expanded -- not merely outside the | | | | Executive recruiters cultivate a profound, far-flung |
| firm, but nationally or internationally depending on the | | | | network which enables them to research the local, |
| importance of the job and the rarity of appropriate | | | | regional, national, and worldwide marketplace, identify |
| candidates. The search firm engages in extensive | | | | currently employed prospects, and screen them for |
| industry research, networking, personal interviews, | | | | suitability. Recruiters remove a tremendous burden |
| thorough reference checking, and initial selection of the | | | | from management by presenting a small number of |
| most promising candidates. More interviews are held, | | | | highly-appropriate candidates who are prepared to |
| the client is prepared to meet with candidates, and the | | | | accept a good offer. |
| retained search firm remains involved until a qualified | | | | Executive recruiters know what to look for in a |
| candidate is hired. | | | | candidate and how to quickly find out if it's there. They |
| The executive recruiter may participate in all client | | | | know how to attract and hire a candidate who is |
| interviews with candidates, all related discussions within | | | | employed and successful. They know, too, how to |
| the client company, all negotiations, offers, and | | | | advise and counsel management so that the best hire |
| settlements. While the process may take three or four | | | | gets made -- the choice with the longest range |
| months, the hire is typically guaranteed for a year or | | | | likelihood of mutual benefit and satisfaction. |
| longer. Because a retained executive recruiter spends | | | | The objectivity and feedback that an executive |
| so much time on behalf of each client company, he or | | | | recruiter offers is invaluable. He or she can help |
| she can only work with a few clients at a time. | | | | balance the emotional reactions and biases of |
| Contingency Firms: Less Attention, But You Only Pay | | | | corporate management. Likewise, the recruiter can act |
| For Results... | | | | as a skilled intermediary -- a diplomat, if you will -- to |
| Contingency executive search firms derive their name | | | | clear up misunderstandings, straighten out |
| from the fact that they work "on contingency." You | | | | miscommunications, and tactfully convey each party's |
| only pay for their services if you hire a candidate | | | | concerns to the other. |
| referred by their firm. Their fees are also between 30 | | | | Executive recruiters have the advantage of meeting |
| and 35 percent of the candidate's first-year | | | | with candidates outside the interviewing arena. |
| compensation. | | | | Recruiters often spend significant personal time with |
| Contingency recruiters most often fill lower to middle | | | | candidates to better understand and evaluate them, to |
| management positions. Recruiters are therefore not | | | | respond to their concerns, and to ease the challenging |
| called upon to do such intensive research. The | | | | transition from the present job to the new opportunity. |
| relationship between contingency firms and their clients | | | | Recruiters Provide Strict Confidentiality |
| is less intense, with less personal contact and a lower | | | | Another key reason to use executive recruiters is the |
| level of mutual commitment. It is not unusual for a client | | | | need to keep important company decisions and |
| company to use several contingency firms on a single | | | | initiatives confidential. Executive recruiters are |
| search, pay nothing just to read resumes and interview | | | | committed to strict confidentiality -- both by |
| candidates -- and continue to employ its own efforts in | | | | professional ethics and common sense. They |
| trying to fill the position in question. | | | | understand the privileged relationship they have with |
| Contingency search firms typically provide a referral | | | | their client companies. They know that all must be kept |
| service, hoping that interviews will ensue and one of | | | | quiet until the hiring takes place. |
| their candidates will be hired. Contingency firms usually | | | | To safeguard their confidentiality, management will |
| serve many clients at a time to maximize their odds of | | | | often hire an executive recruiter to deal with only a |
| placing someone -- and getting paid. These firms | | | | single authority within the client company. Candidates, |
| usually have less time to spend with each client in | | | | too, need the confidentiality which recruiters protect so |
| understanding their special needs and qualifying and | | | | carefully. Most ambitious individuals wish to hear of |
| researching specific candidates. However, many | | | | outstanding opportunities which could advance their |
| contingency firms provide complete research and | | | | careers, but few are willing to explore those |
| recruitment capabilities, and carry on specialized and | | | | opportunities on their own, and thereby jeopardize their |
| intimate working relationships with management. | | | | current position. An executive recruiter knows how to |
| As the search industry evolves, contingency firms | | | | provide information to the candidate with utter |
| have grown in expertise and effectiveness. Many | | | | discretion, so that his colleagues and superiors are not |
| even offer retainer service, and a new generation of | | | | alerted to his possible departure. |
| quality contingency service is emerging and competing | | | | Many candidates will only consider third party |
| for senior management searches. | | | | representation by an executive recruiter in considering |
| Why Buying Help Yields Savings | | | | career opportunities. Most client companies understand |
| The services of an executive recruiter appear costly. | | | | this, and appreciate the fact that confidentiality and |
| Typically, you will pay from 30 to 35 percent of a | | | | professional mediation benefit both them and their |
| hiree's first-year compensation plus expenses, for | | | | ultimate hirees. |
| each hire you make with professional assistance. The | | | | When a company announces a key vacancy -- |
| best way to view this expenditure is in contrast to the | | | | particularly if the company is publicly held -- it can |
| cost of a bad hire. When an incompetent new | | | | create apprehension among stockholders, suppliers, |
| employee makes bad decisions, hundreds of | | | | employees, and the general business community. |
| thousands -- even millions -- of dollars may be lost. The | | | | Likewise, a company which announces a critical new |
| employee will have to be replaced (and the cost may | | | | position can inadvertently tip off its rivals about an |
| become damaging). Companies engage executive | | | | impending new product, direction, or market initiative. |
| search firms to ensure that such trauma and expense | | | | The need for confidentiality will become even more |
| are kept to a minimum. | | | | important as worldwide information access combines |
| In house personnel departments tend to be limited in | | | | with the post-baby-boom decrease in job candidates. |
| their insider contacts. Their leads are often exhausted | | | | Already-employed, proven candidates will get an |
| long before an appropriate hire can be made. The | | | | increasing number of job offers over the foreseeable |
| costs involved in preparing and executing an | | | | future. |
| advertising campaign, screening and qualifying | | | | Altogether, executive recruiters perform a vital service |
| candidates -- and in operating without the needed | | | | to business and industry. They bring expertise, |
| employee for an extended length of time -- make the | | | | effectiveness, efficiency, and confidentiality to the |
| services of an executive search firm justifiable, even | | | | process of finding and hiring executive talent. For these |
| profitable. The alternative can be an expensive, | | | | reasons, executive recruiters will play an |
| time-consuming effort which leads to a hire from an | | | | ever-expanding role in shaping are corporate futures. |
| inadequate pool of candidates. | | | | |