As an executive, you know first hand the difficulty of attracting and retaining effective senior level leaders. You’ve probably been through the recruiting process yourself at one time or another in your own career. Now you’re on the other side of the equation, looking to fill an important role on your executive team, and you’re thinking, do I need a retained search firm to fill this position?
The answer is yes. Let’s look at four reasons why a retained search firm makes the most sense.
A key factor in any search is cost. Contingency search firms are typically lower in cost than retained search firms, but that is not necessarily the case when you consider all of the costs associated with a senior level hire. Contingency firms can sometimes be effective for entry and mid level roles, assuming you have an established process in place for those hires, more on that in a moment.
At the executive level, recent estimates suggest that the cost of a bad hire are anywhere from 6x to 10x their salary. That works out to more than $1 million dollars for each mistake. When you consider the initial search cost, knowledge ramp time, productivity loss, disruption to team and/or clients, open vacancy time, along with a variety of other costs, it’s easy to see how the cost of a bad hire can quickly add up.
A retained search firm is a partner in your search and has a vested interest in a successful placement. You are far less likely to make a bad hiring decision using a retained search firm. They will do the heavy lifting of finding and qualifying candidates. You save significant time and resources, while also getting only the best candidates presented to you that actually align with the needs of the position.
An executive search is often a delicate matter. There are a variety of reasons you may not want an opening to be public knowledge. Likewise on the candidate’s side, they are typically very successful in their current role and many are not actively looking. Thus, keeping a search confidential is important.
Retained search firms are very selective and discreet. Unlike contingency firms, where their goal is to find as many people as possible for an opening, retained firms are more focused and connected. Retained searches aren’t volume based in order to uncover the right candidates. Focusing on the specific needs of each client enables a targeted, quiet search.
Even if you have a large, experienced human resources department, the entire hiring process is lengthy and complex. From writing a job description to deciding where to post it, to reviewing resumes, to following up, to interviewing, to more follow up, to negotiating, and the list goes on. This process can be somewhat simplified with a contingency search, but the majority of the work will still fall on you to complete. This is a drain on your time and resources, which are better served focused elsewhere.
A retained search firm has a well-defined, structured, proven process. Not only do they remove the burdensome work from your team, they provide a streamlined process that incorporates current best practices. This provides you with the ability to find better candidates more quickly.
Culture is one of the most important, yet overlooked, aspects of an executive hire. We wrote about the importance of culture fit earlier this year. High performing executives care as much about the organization as they do compensation. They want an environment where they, and their teams, can thrive. You also want someone who will embrace what you’ve created and continue to build your company’s presence and brand.
Working with a retained search firm like ours ensures that culture fit is paramount. This is one area where you can’t make a mistake. Contingency firms are not incentivized to screen for this level of fit. Earlier we looked at the financial costs of a bad executive hire. The impact of a bad culture fit can be just as severe. From employee turnover to internal strife, bad culture fits create lasting negative effects that are difficult to overcome.
If you’re filling a key role in your organization and trying to decide the best option for your search, let us know, we’d be glad to talk with you about your options. If you’d like to learn more about Sheer Velocity’s process and capabilities, you can visit our website or connect with us on LinkedIn.