When you have a critical role to fill at your company, there are three basic ways to do it:
- Invest the time and effort to find candidates, interview them, and make the hire yourself.
- Hire a contingency search firm to help you find qualified job seekers interested in the position through sites like LinkedIn, Indeed, and Monster.
- Partner with an executive search firm designed specifically to help you find the best possible person for the role—usually someone who isn’t actively looking for work.
Although it requires a larger up-front cost, partnering with an executive search firm is simply your best option.
In many ways, it’s your only option. Here’s why.
There’s no alternative that’s more effective.
Consider the difference between an executive (typically retained) search firm and a contingency firm. One is designed to make sure you find the best hire—the other is not.
Retained search firms work closely with your company in a consultative partnership. The recruiters they employ are experts in landing the right people for each given role. The candidates are usually passive; people who are already gainfully employed. When I was an executive recruiter who worked on over 100 key-hire projects, I never once placed a C-Level executive with a resume on a job board.
More than likely, the right sort of talent for your key role isn’t looking for a job on Monster, and you need an executive recruiter who understands what your opportunity offers and can communicate that to executives who are already happy and successful in their current job.
Contingency firms, meanwhile, employ a completely different model. They tend to focus on candidates who are actively looking for a job. Since contingency firms don’t get paid until and unless they place someone in the role, they are focused on getting someone in the role as quickly as possible. They don’t have the financial incentive to take the time and effort needed to ensure the candidate is the best long-term fit for your company. The contingency model is fine for staff positions. But, the cost of placing someone into a key role that isn’t a true fit for that role is huge.
The significant risk of not getting a key hire right the first time.
When filling a crucial role—like that of your next CFO, for example—you really can’t afford not to hire the best person for the job the first time around.
Clockwork’s Executive Search Performance Benchmark Report shows that the average retained search project takes 123 days—4 months—to complete. If you hire a candidate who isn’t a good fit after all, it will prove to be a remarkably costly mistake.
Not only are you now faced with having to find, interview, hire, onboard and assimilate another candidate—which will likely take another 4+ months—you’ve lost all the potential productivity, momentum, and ROI the right hire would have already made during that same time period.
Getting it right the first time is a goal worth investing in.
The cost of not finding the right person truly is greater than the cost of hiring an executive search firm.
A lot of companies are deterred by the “cost” of hiring a retained search firm. Executive search firms require an exclusive retainer on the projects they take on, including an upfront payment made before a candidate is placed. Contingency firms only get paid if the company hires the candidate they present. Some companies think the contingent model is the less-risky cost structure. But this line of thought is the wrong way to think about it.
The effort you put into making the correct hire for a key role amounts to nothing less than an investment in your company’s future. Whether or not you make the right hire for such positions can be a huge determinant in your company’s ultimate success.
As explained before, getting it wrong will saddle you with debt that is much greater than any search fee. It means you might be without a key position for many months or possibly even years, and most companies can’t afford that type of delay.
To find the best possible executive recruiter, look for the firms with the best track records.
So, the question now becomes: how, exactly, do you find the right executive search firm? Not all are created equal, after all. How do you differentiate?
The best way is to consult the data. The most relevant statistic pertaining to a firm’s effectiveness is it’s failure rate. Generally speaking, you want a firm with a low one. These are the firms most likely to mitigate the inherent risk of an executive recruiting partnership.
What is a low rate? Well, for context, the Executive Search Performance Benchmark Report shows the average failure rate across all industries is roughly 30%.
Many firms, however, boast failure rates that are much lower than that, and those are the firms you should be looking for. Unfortunately, it can be difficult to obtain this data. Many firms don’t make it public.
Additionally, success and failure rates can vary within a firm depending on their area(s) of expertise. A firm with a low failure rate for finding CFOs in the retail industry may have a much higher failure rate when finding VPs of Marketing in the tech industry. That’s where our Clockwork Network comes in.
The Clockwork Network helps companies find the right retained search firm based on actual performance data. We analyze anonymized performance data from tens of thousands search projects and hundreds of retained search firms to find the best firms for every search. Based on your project’s industry, department, and/or seniority, we find the search firms that perform more effectively and efficiently than the rest.
So, when looking for your next key hire, you should make the investment to partner with an executive search firm to get it right the first time—and let the data help you find the best firm for your specific search needs.