Hiring executives is one of the toughest recruiting challenges. It is not easy at all. If you’re considering hiring an executive for your organization for the first time, you have probably tested the waters by now — spoke to mentors, maybe read a few resources on how to hire an executive yourself, and perhaps reached out to a few executives too..
Where did it lead you? Did your efforts materialize? Maybe. However, there’s a better alternative to hire executives, which is, to hire through executive search firms. These firms can specialize in hiring business executives for multi-national corporations, boutique firms, or small private firms.
Executive search firms operate very differently from traditional recruiting agencies. Search firms take anywhere between 6 months to a year to fill a position while recruiting agencies to fill several positions for a single company in a month. The roles filled by these agencies are necessary to run a company. Search firms, on the other hand, look for C-suite roles who are responsible for building organizational policies and move spearhead business functions.
How executive search firms operate?
The major difference between recruiting agencies and top executive search firms is in the way both of them operate. Executive search firms work on a retainer basis, meaning as long as the firm doesn’t fill the role, the firm will be paid. Typically, the fee is 33 percent of the annual salary– including bonus, signing bonus– of the role for which the firm is hiring for.
Given the high fee and to avoid conflict, only one search firm works to fill a role.
On the other hand, recruiting agencies are hired on a contingency basis. This means recruiters are paid only if they fill a position. In such cases, a company may hire several agencies to fill multiple roles. They usually earn 20 to 25 percent of the role’s annual salary including bonus and other monetary perks.
This way executive search firms can cost much higher than recruitment firms.
How to check if a firm is right for you?
Now the question is – how do you find the right firm for your executive searches?
Generally, executive search firms work in a specific sector. For instance, some firms might specialize in the financial sector, while another firm may have a good network of healthcare leaders. These firms have a network of passive leaders. If the need arises, they can easily connect you and match you to your company’s needs.
To qualify an executive for your need, there are certain questions that you can pose to prospective firms. Like, who will lead the search? Ask about the team members and their backgrounds who will make the search team. Who will be leading the team, researching the role, sourcing, and taking initial interviews?
In addition to questions, there are intangibles to consider too. For instance, a sense of trust and open communication should be there. The trust factor should exist between client and firm. John Keller, put it another way, “Is this someone you can live in the trenches with?”