Choosing to use an executive search firm is a major investment. Often, companies will spend between $50,000 and $100,000 (and sometimes more) to find the best candidate. A good estimate is that the firm’s fees will total about one third of the new hire’s annual salary, but some searches will incur even higher expenses.
While engaging an executive search firm has a number of benefits for a company, the expense is not always worth the high investment. When companies approach recruiting from a variety of angles, including referrals, job posting, and online methods, they can often find a wide range of excellent candidates. At the same time, some situations are too sensitive or important to accept the risk of autonomous searches.
One of the major benefits of working with an executive search firm is the guarantee of finding the right candidate without wasting the company’s valuable time and resources. The following are some of the situations in which companies consider investing in an executive search firm:
Replacing an underperforming leader.
When a member of the executive team is underperforming, it can prove extremely disruptive to launch a large, public search. In addition, carrying out a covert search autonomously can prove extremely limiting, which might result in the company again recruiting an underperforming individual into the position. Executive search firms, on the other hand, can look for candidates in a confidential manner to ensure the privacy of all stakeholders and avoid unnecessary business disruptions. Using a professional firm also helps guarantee that the new hire will be able to meet the high demands of the position.
Using a hire to evolve the company in a strategic direction.
Sometimes, companies hit creative walls, or their profits begin to slow for other reasons. In these situations, it is not uncommon to bring in a new executive to turn things around. Whether the new hire is a completely new position, or someone is stepping down from a current position, the future of the company largely depends upon the success of the recruited executive. Executive search firms often have a great deal of experience working with companies going through such evolutionary steps, and this expertise can help make the process as smooth as possible.
Executive search firms typically have a great deal of advice to offer based on experiences with other companies. They also offer several options for where to begin the search and understand how to structure job descriptions to bring in the right candidates. Further, they can conduct interviews to vet a candidate’s readiness for taking on the required responsibilities.
Searching for a specialized expert.
Positions that demand a high degree of specialization are especially difficult to fill because the market for talent is so competitive. Executive search firms have an intimate familiarity with this market across industries and geographic locations, which allows them to develop the best strategies for a company’s needs. Firms generally have a very wide reach and a large network of resources they can call upon to find people with the needed specializations. The firm’s consultants can also collaborate with the company to improve the hiring process to make it more appealing to top candidates and provide feedback on employee retention initiatives. When it comes to highly specialized candidates, companies must put equal emphasis on retention and acquisition.
Aiming to increase diversity.
Executive teams with a wide range of opinions, backgrounds, and experiences ultimately make the company more stable by ensuring that each voice is heard when the time comes to make difficult decisions. However, many firms struggle to find people from different backgrounds using traditional recruiting channels. When companies actively want to make their executive teams more diverse, they can benefit from the wider net cast by executive search firms.
Seeking to increase internal bench strength.
As companies grow larger, they often want to increase the readiness of their talent pool by recruiting people who will likely serve as successors to current senior executives. Whether companies are sensing that an executive is getting ready to leave, or they just want to have options ready for an emergency, executive search firms are an ideal partner to help decision makers strategically plan for the future and build natural lines of succession that make sense for the organization.
Sidestepping internal constraints.
Autonomous executive searches can require a great deal of time and resources that may be best used elsewhere, especially in small companies. For companies in this situation, investing in an executive search firm is typically a wise decision that saves money in the long run, especially if the company wants a quick hire.
Another internal constraint that organizations frequently face is a tapped network. Employee referrals and other forms of networking are an excellent way to identify potential candidates, but once these resources are used up, it can prove exceedingly difficult to think of new avenues for talent acquisition. An executive search firm removes this headache and brings in candidates that the company could not otherwise reach.