You are facing an opening on your executive leadership team and are considering what the best method should be to fill the position? Do you tap into your network and handle the recruitment internally? Do you use a contingency firm for such an important opening? Do you consider using a retained search firm knowing that they require a retainer before you even see a single candidate profile? Like most prudent leaders, you want to save money on your executive search, but at the same time you want the best possible candidate who will have the best chance of succeeding at your company.
Initially, you’re assuming it will be the most affordable to conduct the search in-house. There are no fees to pay to a 3rd party recruiter. The second option is a contingency firm where you will only have to pay if they find the candidate you hire. Finally, based off of your initial assumptions, a retained search firm is going to be your least affordable option, since you have to make a payment before you start the search.
However, your initial assumptions are going to be limited if you have never worked with a retained executive search firm before. The real critical need you have is getting the best possible value and ROI on your investment. Let’s take a look at why choosing a retained firm is going to be your best option for an executive leadership search.
Retained executive search firms only work with senior level candidates. These recruiters know the process for identifying, contacting, and working with candidates of this caliber. Hiring for a senior leadership position is very different than hiring for entry level and middle management roles. It’s like apples and oranges.
An internal HR team has competing commitments, priorities, and deadlines. Going through resumes, scheduling interviews, and communicating with candidates typically takes much longer when handled in-house.
No matter how large your network may be, you simply won’t be able to access as many qualified candidates as a retained executive search firm. A majority of the top candidates only work with retained recruiters. They look passively and rely on the discretion of a recruiter to keep their interest quiet. They also know that if the company has invested in hiring a retained search firm, it is an important search to be filled.
Additionally, retained executive recruiters have a larger network to draw from. Their years of experience has afforded them a constantly growing network of the best and the brightest talent in the market. It’s literally their job to know people.
One of the most important considerations when hiring a new executive is culture fit. The candidates are all going to have the requisite technical skills to do the job. Otherwise they wouldn’t be considered. The key to finding the right person for your opening is determining how they will fit with the company culture is where the true fit lies.
Culture is the number one reason why an executive hire does not make it at an organization. A good retained executive search firm will incorporate the use of formalized industry accepted assessments, like those provided by Hogan to assess a candidate’s cultural and personality fit from a leadership perspective. Determining cultural fit during the interview process means you only see the candidates that should thrive in your company’s culture. And top firms will continue to work with the candidate through onboarding and check-in through the first year to help with their integration.
The largest unanticipated cost of not using a retained executive search firm is the cost of doing it again and the opportunity costs. Well-known recruiter Jörgen Sundberg puts the cost of onboarding an employee at $240,000. And, according to the U.S. Department of Labor, the price of a bad hire is at least 30 percent of the employee’s first-year earnings. For a small company, a five-figure investment in the wrong person is a threat to the business. Being without an executive for any stretch of time, or being stuck with a bad one, creates lasting effects that can be felt for months or even years.
Retained executive search firms are experts in sourcing senior level talent. Their process will be faster than an internal search, require far less effort from you and your team, reach more top candidates, improve the chances of finding the right person the first time, and most importantly, make sure the candidate fits the culture of the company.
When looking at the full picture, working with a retained search firm will save you money on your executive searches every time. You should not have the stress of having to refill the position and all that goes along with that, as the chances of that person lasting will be much greater now.
To learn more about Sheer Velocity and our approach, send us a note and let us know how we can help.