Hager Executive Search’s Partner and Vice President of Talent was recently interviewed in the Silicon Valley Business Journal. The article, about former Zynga Marketing exec Padma Rao starting a new role as entrepreneur-in-residence at Menlo Park venture capital firm Foundation Capital, features a quote from Lamboy regarding the specialization of knowledge now required for many marketing roles.
Marketing expert Padma Rao hopes to find ‘muse’ at Foundation Capital
There are different types of Executive Search and each is effective in its own way. The difference is primarily in the level of service required and the level of experience of the desired talent. The search consultant’s compensation is usually based on a percentage of the new hire’s salary, anywhere from 20 – 33% depending on which type of search model and level of talent sought.
Retained Search – As the name implies, this search model entails an upfront retainer fee for services provided. Payment terms are usually a third of the fee up front, with another third due at an agreed upon time (sometimes 30-45 days or when a certain amount of candidates are presented) with the remaining payment due upon a represented talent accepting a position with the client. In this model, the Executive Search Consultant acts as a true consultant, advising the client company with regard to search process and thoroughly identifying, qualifying and reviewing potential candidates for specific leadership positions. Included in this model are services like:
This model is most effective for high level executive positions (Senior Director to C-Level) and/or hard to find talent where a specific and exceptional skill set is required for the role. Often referred to as “Headhunting”, Retained Search is a disruptive methodology – most of the candidates targeted are “passive”, already working in a similar position for another company. In this sense, your Executive Search Consultant acts more like a member of your Marketing Department, connecting with highly sought after talent to engage their interest in your position and company.
A Retained Executive Search Consultant’s loyalty lies with the client and as such, the consultant will endeavor to bring the best talent for consideration and present a realistic assessment of the candidate’s strengths and alignments as well as areas of potential growth. And as a contracted consultant to the client, they are free to share competitive information that they collect during the course of the search.
Retained Search is a partnership between client and Executive Search Consultant that most often results in the client finding the best and most uniquely qualified talent for their critical position as well as an enhancement of the client’s employer brand in the competitive marketplace.
Engaged Search – This model is a variation of the Retained Search model whereby an initial service fee is due upon engagement (usually a flat fee or percentage of the position salary) with the remainder due upon a talent accepting a position with the client. This model is most effective for Mid-level Executive talent (Senior Manager to Director Level) or for smaller company clients for whom a fully Retained Search is not cost effective. This model gives the client and the Executive Search Consultant the opportunity to build a relationship based on mutual trust that would presumably evolve into an ongoing Retained Search relationship. Much of the research and passive candidate sourcing is the same as with the Retained model, but the difference would be a matter of the search’s priority for the Executive Search Consultant and with the sharing of derived competitive intelligence. This model is more about providing talent to consider and less about consulting with regard to process or search innovation.
Engaged Search is a mutual understanding between client and Executive Search Consultant that results in quality candidates being introduced for consideration and the opportunity for client and Executive Search Consultant to build a strong trust built relationship.
Contingent Search – This model is most effective for entry level to junior management level roles, especially for large companies looking to fill multiple positions. Contingent search involves no initial upfront fee for the client with the recruiter being compensated upon the successful completion of a search with a commission based on the salary of the talent. The most common manifestation of a contingent search is the traditional job posting placed on a job site like Monster or The Ladders. In that sense, Contingent Search is a bit of a misnomer; most contingent recruiters will repost an employer’s job description on various job sites and not conduct an actual “search” or any candidate outreach on behalf of a client.
While there’s no commitment on the client’s part in regards to a partnership with a Contingent recruiter, that relationship is the same in reverse. The challenge with the Contingent model is often that the talent presented is of lesser quality and being reliant on closing commission based deals, a contingent recruiter will devote less attention to an individual client’s specific needs. Additionally a contingent recruiter may present the same candidate to multiple employers to maximize their chance of a placement and size of their commission and whereas a Retained Executive Search Consultant will present a full assessment of a candidate to the client, a contingent recruiter may likely downplay or omit any negative assessments they have about the talent they are presenting.
Contingent search can be effective in supplementing a client’s existing talent acquisition efforts or talent pipeline and can produce a large quantity of applicants. However, there’s often a tradeoff with regard to quality of talent and level of service.
Talent Acquisition Strategy Consulting –An additional option to consider when faced with a need to find top talent with an eye towards cost effectiveness. Some Retained search firms are beginning to offer Talent Acquisition Strategy Consulting a solution that is especially effective for start-up companies. The fee for service in this model is a traditional hourly consulting fee, enabling the client to utilize the Executive Search Consultant’s expertise without the upfront fee and with the ability to more deftly allocate costs.
In this model, the Executive Search Consultant is hired by a client to act as an in-house consultant to either supplement an existing team or act as an outsourced process solution. Many temporary staffing firms offer RPO solutions (Recruitment Process Outsourcing) whereby they operate as a client’s talent acquisition team. But whereas RPO performs inbound screening of applicants for entry to mid-level openings, the Talent Acquisition Strategy consultant would work with the executive level team of the company and in essence “teach them to fish”.
The Executive Search Consultant serves as an adviser to the Executive Team and helps them set up an Executive Recruiting process for the company with regard to sourcing strategy, understanding their employer brand and competitive landscape and guiding them through the tactical steps of finding and engaging the talent they are seeking. The responsibility for the outreach to the talent and subsequent engagement tasks would be assigned to the Executive Team so they can gain the experience necessary to repeat the process on their own for subsequent searches.
Talent Acquisition Strategy Consulting is an excellent way for smaller companies and startups to benefit from the knowledge of an Executive Search Consultant while keeping financial costs at a minimum.
Here’s the good news – The economic recovery has started. After years of speculation and stops and starts the economy is actually improving. Consumers are spending, sales are up, manufacturing is growing and finally companies are hiring. And while is certainly isn’t happening fast enough for everyone’s taste or as robustly as we all might long for, there are good signs on the horizon that the recovery is real.
As Executive Search consultants, we are privy to some inside information from our clients both large and small and can tell you that the vast majority are ramping up their efforts company wide – marketing business development, IT, R&D, all of it. The best companies are moving full force forward.
So why the scary blog post title? Because we’re also seeing a troubling and potentially dangerous development with some of the new client companies we’ve been engaging and some of the chatter we’ve been hearing. It’s a major red flag we’ve encountered in some of the conversations both on and offline that we’ve been listening to, and it’s a major concern because of the interconnectivity of the global economy.
So here it is. The Number One Way to halt (and possibly reverse) your company’s recovery:
GO BACK TO THE WAY YOU WERE DOING THINGS WHEN THE ECONOMIC COLLAPSE TOOK PLACE
While that may seem a bit obvious, we’re still seeing some signs that a few companies are falling back into the same traps that got them in trouble in the first place, especially in regards to executive level talent acquisition. (Recruiter humor: Repeating the same fruitless action over and over again and expecting a different result is called A) Insanity or B) Our Company’s Executive recruitment strategy). Having entry level recruiters matching up resume keywords from your job postings will bring you exactly the same result as before. And while “social recruiting” seems like the latest buzzword, for too many employers, that means posting generic job descriptions on Linked In and Facebook as opposed to Monster and Career Builder. Those tools may work well for mid-level or individual contributor roles, but the best executive level talent isn’t looking at job postings anywhere. They’re not looking at anything but the analytics reports of their successful companies taking a decidedly upward turn.
The concept of returning to the same old tactics that didn’t work that well in the first place betrays the very concept that lies at the heart t of the new recovery: innovation. Too often people think of innovation strictly in terms of new technology. But in truth, innovation is a mindset. Here’s an example…
We have a national client who came to us for a critical leadership position here in the San Francisco market. This client was recently rated number one in their field by the leading industry trade magazine which cited their commitment to innovation and openness. For this leadership role, they asked us to look outside of their core business community and towards talent from companies that have similar and related aesthetic sensibilities and skills but most importantly towards talent with an innovation mindset. Their open minded approach to looking for talent enabled us to provide them with several top tier candidates, each of whom brought different skillsets and experiences to bear but who all shared the client’s forward thinking approach to innovation. As a result they are not only close to a decision on their new regional leadership talent but they saw the value of the other talent we presented and are now planning on creating positions for them as part of a firm wide Innovation initiative.
Our client’s foresight into seeing the value of innovation is what made them Number One in their space. Their continued commitment to innovation is likely to keep them at the top (and well ahead of their competitors) for years to come.
If you do not innovate, if you do not challenge your team and your company to look at problems in new ways and find new solutions, you are in danger of being left behind.
How do you know if your open position should be outsourced to an Executive Search Firm and that in so doing you are making a good business decision for your organization? Below are some of the key factors to help you determine if outsourcing the search is your next step. If any or all of the reasons below exist, it may be more cost effective to outsource. With the business climate becoming increasingly competitive, finding the very best talent will be key to the growth of your organization.
Here are some factors to consider:
1. The talent you are seeking is not responding to traditional recruitment techniques
Traditional recruitment techniques such as job postings, either on a job board like Monster or The Ladders or on your company’s website, contingent recruiters, or referrals from colleagues, friends, etc. can be effective, but you need to assess whether they are bringing you the talent you really need for your critical open position. Often times the best talent will not respond to these traditional techniques because quite simply they aren’t seeking a new role; they’re passive talent, actively working in a similar position for another company. Many contingent recruiters will not seek out passive talent, but will simply repost your existing position under their brand. And some in house recruiters are not trained to proactively source for talent but only screen inbound resumes. Having a large pipeline of talent from traditional recruiting sources does not necessarily mean that your ideal talent is in queue. If you aren’t seeing the talent you need, it may be time to outsource your search to an Executive Search Consultant.
2. The position has been open in excess of 3 months
If a position has been open for more than three months and there are no viable candidates in pipeline, it’s time to reassess your methods. Every communication your company makes is a reflection of your employer brand and if a position is open for a long period of time, you may not realize what you are communicating to your audience. If the same job at the same company keeps reappearing over a prolonged period of time, you may be creating doubt and concern: “What’s wrong with XYZ Company? How come they still have that position open? Are they even serious about finding someone?” You are placing your employer brand at risk. An Executive Search Consultant can work with your hiring team to determine whether the problem is one of methodology, expectations, assessment or a combination of all three.
3. You are filling a position that is in high demand in a specific market
Companies are constantly on the lookout for talent who combine experience with innovation and who are up to date on the latest technologies and trends. The higher the level of experience/knowledge required, the smaller the talent pool. Add in more specific criteria surrounding the role and competitors seeking the same type of talent and you now have a hard to fill search. Hard to fill searches are incredibly time consuming and conducting such a search is a full time job that may require the expertise of a search firm. While you may have a dedicated and talented internal recruiting team, a hard to fill search may require a higher level of focus and expertise than your hard working team is able to provide while they endeavor to fill numerous other talent requisitions. Additionally, there’s a risk of potentially alienating a desirable talent should they be engaged by a less experienced internal recruiter who does not possess the requisite knowledge of the role and area of expertise in question. This can be especially true in markets such as the SF Bay Area that has an extremely savvy and well educated talent base.
And if you have no internal recruiting team, it may mean…
4. The search is time consuming for internal staff who are being taken away from their core responsibilities
While you certainly would want your SVP’s opinion on what type of talent is needed for your open Vice President role, having the SVP be responsible for the search will pull them away from their core responsibilities. This is especially true in smaller companies without an internal talent acquisition department but can also be true for ones that do. While the SVP may be adept at identifying the best talent for the team, finding that talent can be an altogether different matter, particularly if you are relying on traditional recruitment strategies. And if the SVP is in any way responsible for revenue growth, you are putting your organization at even greater risk; instead of “saving” money by not hiring an external consultant, you have now set back your Marketing/Sales/Business Development etc. plan by having that SVP concentrate on an area not of their expertise.
5. The search is or should be confidential
When you post a highly visible and key senior level position to the public, you post it to everyone, including your competition. You may be alerting your competition that you have a gap in senior leadership that they can use to their advantage by going after your existing clients (this is particularly true with advertising and marketing agencies) or you can damage your employer brand, similar to reposting a position over and over as in #2 (“What’s wrong with XYZ? What happened with their SVP? Did s/he quit? Was s/he fired? “). And if a high level performer has decided to leave your organization or a low level performer needs to be replaced, a mishandling of the transition or in the timing of the announcement to the internal staff could create additional internal turnover. It may be best to have an Executive Search Consultant handle your high level search confidentially.
Talent is a key differentiator between good companies and great companies. In this increasingly competitive business environment, you simply cannot afford to have anything but the best executive talent. While many methodologies are effective in finding and attracting talent, if you are seeking the best talent, not just the best talent available, an Executive Search Consultant may be the most valuable investment your company makes in 2012.
This is a good article and addresses some good points. I think there needs to be clarification around the difference between staffing agencies and search firms and why the two need to be vetted differently. Though both are classified as being in the staffing industry, they are actually very different entities and should be viewed as such.
A staffing agency is primarily a temporary firm. If you ask a staffing agency where the bulk of their revenue comes from, it is from temporary employees. The vetting process for a contract employee is very different than the vetting process for a full time staff hire and the recruiting is also very different. Most staffing agencies get the bulk of their employees from job postings as they are primarily attracting active job seekers. This is also reflective of their recruiting process for direct hire, unless they have a specific division that does true search.
Search firms are primarily targeting the passive job seeker which is a key differentiator. If you are looking for a solid recruiting process for passive job seekers, you may not want to be asking temporary staffing firms their methodology for search. Staffing agencies are great places to find contractors but you may want to specifically target search firms for your direct hire requirements. This alone may help relieve “what drives you nuts about staffing agencies”.
Source:
A decent article talking about Linked In. Glad that the human side of recruiting was mentioned (Aisha Guler’s comments were quite good – she’s a Hager Executive Search placement BTW). It sometimes amazes me when companies feel they can simply automate everything. Would you fire the carpenter building your house because you bought the most advanced hammer on the market?
Linked In is no doubt useful but it is a tool. As we’ve mentioned before it takes a great deal more work to find top tier talent than simply putting up a job posting. Why would someone think that putting up a job posting on Linked In would work appreciably better than putting one up on Monster? Good passive candidates aren’t going to read a job posting in any location. And not everyone is on Linked In. If you want good talent, you have to go out and get it.
What Linked In provides is access to online information. What search consultants do with that information is what separates the good consultants from the best consultants.
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/05/19/BU011JHRJK.DTL
Don’t know whether to laugh or cry at the line: “Rather than sift through mounds of online applications, they are going out to hunt for candidates themselves.”
You’re kidding, right? True Executive Recruiters have been “hunting” their entire careers. Just because a new form of social media has made it a bit easier to communicate doesn’t mean a paradigm shift in the good old fashioned hard work of Executive Search. The fact that some of these companies are just now getting on board is a bit, well, scary.
“Recruiters had to put in all this extra time to read applications but we didn’t get benefit from it,” she says. Now, the company is hiring different types of recruiters who specialize in headhunting, including finding candidates to poach from competitors, rather than those who are good at processing and filtering applications.
Uh, people who are “good at processing and filtering applications” aren’t recruiters, although they may carry that title. A true recruiter “recruits”, as in goes out and looks for the right talent for their client and opportunity. Having “new” technology (we’ve been on Linked In since 2005) to utilize doesn’t mean that talent search suddenly becomes easy or that anyone can do it. Low level screeners tasked with speaking with Executive level talent can damage your employer brand and lengthen the time to fill crucial positions. Professionals find professionals, not resumes.
Founded in San Francisco in 2005 by entrepreneurs Rebecca Hager and Greg Lamboy, Hager Executive Search is a Retained and Engaged search firm specializing in Executive and C level talent searches in Marketing/Branding, Business Development, Sales, and Digital Media across varied business sectors.
