We’re often asked by new potential clients “How does this work?” For those unfamiliar with Executive Level Search models, we’ve provided this basic primer on the most popular methods of finding top talent for your team.
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 25 – 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:
- Consulting with hiring manager(s) and principals to review/ revise job profile/description
- Creation of a recruitment strategy and ideal talent profile
- Research of competitive talent landscape and client competitors
- Positioning/profiling of passive talent and initial talent contact
- Conducting of candidate interviews and presentation of viable candidates
- Scheduling of phone and in-person interviews between candidates and client
- Gathering of feedback with interviewers and the candidates
- Continual updates/progress reports to the client throughout process
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 skillset is required for the role. Often referred to as “Headhunting”, Retained Search is a proactive methodology – most of the candidates targeted are “passive”, already working in a similar position for another company and unlikely to respond to traditional talent acquisition methods like job postings. 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, Retained Executive Search Consultants are free to share competitive information collected during the course of the search, which can be of value to the company as they continue to grow.
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. Sometimes referred to as a “container” search, 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 or is seeking a shorter more flexible relationship for various reasons. 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, the length of the engagement and with the sharing of derived competitive intelligence.
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 trusted 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 Indeed or Linked In. In that sense, Contingent Search is a bit of a misnomer; many contingent recruiters will simply 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 can sometimes be that the talent presented may not represent the best fit for the client; being reliant on closing multiple commission based deals, a contingent recruiter may devote less attention to an individual client’s specific needs and may not be as thorough in their scrutiny of the talent as the client would like. Also, many Contingent recruiters are fairly new to Executive Level Searches and having a less experienced recruiter act as the first point of contact to highly sought-after talent may cause damage to a client’s employer brand.
Additionally a contingent recruiter may present the same candidate to multiple employers to maximize their chance of a placement and size of their commission. 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.
Additional options for finding talent
Contract Recruiter – Many companies who do not employ a recruiter as a full time staff member opt to work with contract recruiters. Generally contract recruiters are paid on an hourly basis (sometimes on a per project basis as well) and can represent a very flexible solution for companies that are keeping an eye towards costs. Their duties can vary with some simply working in house and holding responsibility for screening inbound talent sourced from the client’s career portal or postings while others will be more proactive in their sourcing methodologies.
While there may be an initial up-front cost savings when using a contract recruiter, there may also be some tradeoffs. As with some contingent recruiters, the contract recruiter may be less experienced and lack the knowledge and understanding of a high level position and thereby be less effective in bringing top passive talent to consider. And as the relationship between a contract recruiter and client is usually short term, there may be some compromises as far as level of commitment to the client.
Contract Recruiters are usually tasked with filling multiple openings and can be an effective solution for junior to mid-level roles. And while some are called upon to handle Executive Level recruiting assignments, it’s wise to ensure that the contract recruiter’s experience is commensurate with the level and type of search(es) you are asking them to conduct.
Talent Acquisition Strategy Consulting – An additional option to consider when faced with a need to find top talent with an eye towards cost effectiveness, many Retained search firms also offer Talent Acquisition Strategy Consulting. This solution is especially effective for startup companies. The fee for service in this model is a traditional hourly consulting fee or a flat rate fee, enabling the client to utilize the Executive Search Consultant’s expertise 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. Some Executive Search Consultants will also provide a short list of talent that they advise contacting to ascertain fit, or a list of competitors or related companies where the client might find a suitable talent source. However, the responsibility for the outreach to the talent and subsequent engagement tasks would be assigned to the Client, which can be used as a valuable training tool for the clients’ internal 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 start-ups to benefit from the knowledge of an Executive Search Consultant while keeping financial costs at a minimum.
Expectations
It’s important to remember no matter which type of partnership you choose to help you build your team, whether it is to retain an Executive Search consultant or work with multiple contingent recruiters, your expectations need to be in line with your choices. Know what level of service you are seeking and what type of service you can afford.
Using multiple contingent recruiters will most likely result in a great deal of volume in terms of the talent you’ll see which can be extremely helpful, but may result in talent that are not as closely aligned with your needs. As the contingent model relies primarily on postings and sourcing of active talent, it’s unlikely that you would see high level passive talent as a result.
And while a Retained Search Consultant would be better able to ascertain your business goals and bring you a short list of closely aligned talent, it’s unreasonable to expect them to work without a retainer for their consulting and research efforts.
3rd party talent acquisition partners can provide a valuable service in your company’s effort to build a winning team. But each work under different philosophies and different methodologies so the key here is communication. Ask your potential search partner to explain how they work and the methodology they employ. Explain your needs and expectations and ask them (and yourself) how they would go about assisting your company. If you’re needing high touch, strategically focused service, a Retained or Engaged model will represent the best route. If you have flexibility with regard to the talent experience and specifications or need multiple positions filled, the higher volume approach of contingent search or a contract recruiter might be the best fit.
It’s important to remember that Executive Search is a partnership and both client and search consultant need to work together towards success.
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As one of the premier Executive Recruiting firms in the country, Hager Executive Search was founded in San Francisco in 2005 and has developed a reputation for being the first call executive search firm for companies seeking talent in marketing, branding, business development, digital media, leadership and innovation. As retained and engaged executive recruiters, Hager Executive Search aid their clients in finding top tier talent from Senior Director level to C level. Find out more at https://www.hagerexecutivesearch.com