Hiring an executive level placement is a huge undertaking. As such, you need the right retained executive search firm to help you undergo this task.
Hiring a retained executive search firm is a mission in itself which is why it’s important to consider every aspect when it comes to selecting the right firm for your needs. This includes understanding what makes retained executive search firms unique and what factors to take into account to determine if a firm is well equipped to take on your project.
Whether you’re still questioning the value of hiring a retained executive search firm or debating what questions to ask, here are some tips to help you through this selection process.
Why Use a Retained Executive Search Firm?
You might still have some doubts as to whether hiring a retained executive search firm is worth the price you pay and the answer to that is YES. Ultimately, filling an executive-level role is a huge undertaking that only a retained firm is equipped to handle. There are three main benefits of hiring a retained firm.
You Get a Higher Quality Placement
The retained executive search process is one that accounts for the complexities of finding and hiring an executive placement. As a result, the quality of the placement is significantly higher since the firm knows what to look for in an executive candidate, where to look for them, and how to go about this search.
This is all thanks in part to their process and skills. A retained firm’s process is comprehensive in the sense that they know how to properly evaluate an executive against a complex list of criteria. They also know how to pitch to a passive candidate and win them over on a role that they wouldn’t have considered otherwise. This is especially true if this is a search firm that specializes in an area that the role resides in (more on specialization to come).
Additionally, their skills include but are not limited to knowing how to establish a search strategy, how to conduct research efficiently, how to conduct reference checks at the executive level, etc. These are all crucial skills that are paramount to a successful executive search process.
Another reason retained firms are able to place higher quality placements is that they have access to the right network.
Recall the difference between contingency and retained executive search firms. Contingency firms place their emphasis on candidates who are actively applying since they are able to be placed fairly quickly. A retained firm, however, will focus on candidates who are passive. In other words, they focus on recruiting candidates who are successfully employed as this often signifies that their chances of thriving in future roles will be just as successful.
So, in order to find these passive candidates that can be elusive at the best of times, a search firm needs to know where to look and who to contact. Since retained firms tend to have a network that is not only extensive but relevant, their chances of finding a quality placement are significantly higher.
Your Search Project Is Guaranteed to Be the Firm’s Priority
Because of the way that a retained executive search firm is structured, they are incentivized to place your project as their top priority. This is due in part to several factors, one of them being an exclusivity clause.
The reason why most contingent firms focus on placing candidates as quickly as possible is because of a lack of exclusivity. If they’re competing with other search firms to find the best candidate for their client, naturally there is going to be an element of urgency in the search. Because of this, the emphasis placed on the quality of the candidate tends to fall to the wayside in favor of a speedy placement.
And since retained firms tend to include exclusivity clauses in their contracts, this tells you that they are ready to commit to your project and focus on finding the best possible candidate without the added burden of competing with other firms.
Furthermore, because the executive search process is so hands-on and collaborative in nature, this motivates a retained search firm to devote 100% of their effort towards placing the best possible candidate. Otherwise, they risk ruining their reputation as a credible retained search firm.
Significant Cost and Time Savings
Like we mentioned earlier, retained executive search firms have the knowledge, the network, and the process to conduct an executive search. This ensures an additional level of efficiency that neither you nor most other firms possess. In turn, this cuts down on the time spent on a project and minimizes the chances of errors, earning you a higher ROI on an executive that can be placed sooner rather than later.
Say for example you tasked your in-house recruiters with finding an executive for a new role you’re trying to fill. This search is more likely to fail since in-house recruiters don’t have the extensive network that a retained firm has, resulting in wasted time AND effort.
There are additional consequences to hiring the wrong firm to handle your executive search project or handling the search yourself which includes hiring the wrong candidate. If this candidate decides to leave 6 months into the job, this saddles you with a new search project that you have to conduct which, again, leads to more time wasted and more money spent.
All in all, it benefits you to hire a retained search firm to handle your executive recruiting projects considering the value they can bring to your company in the long run. But how do you ensure you choose the right retained executive search firm for your needs? Here are some factors to consider when selecting a retained executive search firm.
Key Factors to Consider When Selecting a Retained Executive Search Firm
When it comes to selecting an executive search firm, the cost tends to be one of the most important factors that companies concern themselves with. This is because there is a common fear among companies that retained firms will try to find the most expensive candidate possible to get a bigger payout, a concept known as ‘uptick.’
While the cost of hiring a retained executive search firm is definitely something to consider, keep in mind that there are very legitimate reasons why you might end up hiring a more expensive candidate.
Needs change for example and you might realize later on during the search project that you require the skills and knowledge of someone more expensive. Alternatively, your expectations of what the market will bear might differ from what you actually discover.
It pays to hire a retained executive search firm to take on your search project. That said, it pays even more to hire a retained firm that specializes. There are 5 common areas that your firm can specialize in:
- Company Size/Stage
If you hire a retained firm based on the executive you are trying to hire, they are better able to pitch to relevant candidates as well as identify those that are more qualified. Take this into consideration as it can have a significant impact on your search project.
Online Collaboration and Transparency
It’s one thing for a retained firm to tell you what the current status of the search project is. It’s another matter entirely if they’re able to show you.
Transparency is a crucial element of a successful search project. Make sure you work with a firm that values online collaboration via their recruitment software platform as this will enhance the quality of your project and enable you to provide better input along the way.
Most importantly, online collaboration guarantees an increased level of efficiency and effectiveness over a traditional, antiquated one-sided process.
As our Executive Search Performance Benchmark Report shows, retained search projects with online collaboration have a 21% greater chance of ending with a successful placement.
Diversity and Inclusion
As diversity and inclusion in executive leadership become a higher priority, so too does the need for retained executive search firms with experience recruiting diverse candidates.
If diversity is something you are looking for in an executive then make sure you hire a retained search firm that has experience recruiting diverse executives and values diversity as much as you do.
Take into account how selective the pool of executive talent is and how much smaller that pool will be adding diversity into the mix. You want to partner with a firm that has the resources and motivation to commit to this level of executive search.
Questions to Ask When Selecting a Retained Executive Search Firm
How Long Will the Search Project Take?
It’s a good idea to get an estimate on the time it will take to hire a new executive, especially if you’re keeping a pretty tight schedule.
According to our Executive Search Performance Benchmark Report, a good executive search project can take an average of 123 days and this can vary depending on the firm’s specialization and experience. This is why it’s crucial to ensure that you select a firm with a specialization pertaining to your particular project.
What Is the Likelihood of a Successful Executive Placement?
Also according to our Executive Search Performance Benchmark Report, the average successful placement rate for retained firms is 71%. While you can use this as a starting reference point, also keep in mind that placement rate can vary based on the firm’s specialization.
How Do You Handle Sensitive/Confidential Materials?
This is a critical question seeing as you don’t want sensitive details spreading like wildfire without your consent or before you’re ready to handle it.
Only a retained firm will be able to handle an executive search while still handling sensitive information so that it’s not exposed to outside sources or competitors. If you can’t trust a retained firm to handle confidential information then you likely wouldn’t want to trust them with your search project.
How Do You Prioritize Diversity and Inclusion Throughout the Recruitment Process?
Here are some additional questions that you can ask along these lines:
- What experience do you have recruiting diverse executives?
- How do you track diversity and inclusion metrics?
- How do you ensure candidates are evaluated equally?
- Does your interview process account for unconscious biases?
The more experienced they are, the more thorough the process and the better chances of hiring an executive that is not only qualified but diverse.
What Areas Do You Specialize In?
Many retained firms will have several areas of specialization which can range from very niche to somewhat broad. For example, some firms might specialize highly in filling VP of Finance roles for smaller architecture firms in Los Angeles or they can specialize in placing COOs in a small range of industries.
No matter the case, make sure the retained firm you select has experience with search projects similar to the one you want them to take on.
How Collaborative Is Your Search Process?
You want to ensure that retained firms have your best interests in mind which is why you want to confirm that they have a highly collaborative process. Get an idea for how they will include you in their process, what their deliverables are, what their feedback structure is like, etc.
Retained executive search is a two way street so ensure that there is plenty of communication between you and the retained firm you select.
Hiring the right firm means hiring someone that has the skills and the resources to take on your executive search project. This can vary depending on a variety of factors such as their specialization and process. These elements can make a huge impact on the success of your executive search project so remember to ask the right questions and make note of the most important attributes of a firm as they pertain to your executive search.