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Did you know the key to your business success is hiring the right leaders who can lead your company and its people the right way? Often, CEOs and C-suite executives identify the inability to attract and retain top talent as their most pressing business issue. If you too are facing the same problem, an executive search firm with a rock-solid history of delivering results can help you find the top talent that can profoundly impact your business and take it to the next level.
If you are still hesitant to join hands with a reputed executive search firm, know that the market size of the executive search industry has gone up considerably (almost three times) between 2012 and 2021. Need some additional impetus to decide?
In 2021, the size of the Europe Executive Search (Headhunting) Market was valued at USD 4,862.85 million. By 2030, the market size is anticipated to reach USD 11,551.80 million, with a CAGR of 10.46% from 2023 to 2030. Among the seven segments of this market, namely Industrial, IT, Healthcare, FMCG, Retail, Automotive, and Others, the biggest market share of 30.09% was held by the Industrial segment in 2021. But during the forecasted period, the IT segment grew with the highest CAGR of 13.89%.
With the above data indicating the growing importance of having an executive search partner in your corner, perhaps you will now agree that hiring one can indeed help you to fill your C-suite positions fast with the best-fit talent and a streamlined hiring process.
But before you hire the first executive search firm you come across in your hurry to find the right talent, there are a few things you should consider to make an informed decision.
Not sure what they are? Don’t worry because we have got your back.
1. Retained Search vs. Contingent Search – What Do You Need?
Retained search or executive search refers to an extremely personalised, high-touch recruitment process, which companies and organisations often use when they want to source and hire for niche or executive-level roles. The term “retained search” comes from the word “retainer,” which you, as the business owner, will have to pay the executive search firm upfront to employ it for the complete duration of the recruitment process.
Contingent search refers to a hiring process where the recruiting firm will just get the agreed-upon search fees after a candidate is hired by your company.
In a retained search, the firm typically works closely with a handful of clients to decide what they need in terms of location, skills, and salary to find the right candidate. Recruiting firms handling retained search also consider the company’s workplace culture and the objectives it’s aiming to achieve to find the most qualified candidates for the vacant position.
In contrast to retained search firms, contingent search firms usually juggle multiple clients at a time. Since their pay is tied to their performance, these firms are often in a hurry to produce potential candidates for their clients, even if they aren’t necessarily the right fit for the role.
Before you hire an executive search firm, it pays to determine what you really need. If you are ready to work with a retained search firm in the long run and have the financial means to cover the costs, you can go ahead and join hands with such a firm. But make sure to ask the services on offer to decide what you truly need.
For example, you can ask your short-listed firms if they provide competency modelling, culture shaping, candidate assessment, employer branding coaching, performance management, employee engagement, organisational mapping, or other services to make an informed decision.
2. Area of Specialisation – What Are You Looking For?
Consultants at leading executive search firms are experts in their field and can apply their in-depth, industry-specific knowledge to identify and attract the candidates you need. Though most of these firms usually work with clients in different sectors, some may specialise in specific areas while others are generalists.
If you are looking to fill out a niche vacancy or find suitable candidates for an executive role with an unusual skill set or one that needs a unique perspective and specific qualifications, hiring an executive search firm specialising in the domain is your best option. For instance, to recruit a chief technology officer (CTO), one of the firms specialising in IT is your best bet.
3. Who Will Be Working on Your Assignment?
Before you hire an executive search firm, it’s important to learn about and meet the team or a particular headhunter who will be working on your company’s search assignment. You could even put a request that the team disclose the resources it will use to support the candidate sourcing strategy and assignment. Additionally, it pays to know the average placement time.
Since executive search can be called the blend of an art and science, the hiring process differs based on each assignment and the client’s specific criteria. Various other factors, such as candidate pool, confidentiality, etc., too may impact placement time, which makes it vital to ask about the average placement time. However, estimating it could be often pretty difficult due to the diverse influencing factors involved.
In case you need the candidate urgently, you should clearly communicate it to the search firm, along with your preferred deadline, so they can do their best to meet it.
4. The Number of Searches Handled At a Time
Before hiring headhunters for your company’s C-level open positions, it pays to know the time and attention those professionals will dedicate to your assignment and hiring process. You should ask your short-listed executive search firm about its business model and search methodology employed typically to predict the number of searches it will take on simultaneously.
An executive firm that works to fill high-level positions like CEO, CFO, COO, CTO, etc., will have a handful of assignments at a time and is likely to assign a member or a small team to work with you on an exclusive basis. But if you choose a recruitment company that functions on a contingent basis, chances are higher of your assignment being one of the many it handles.
With an executive search firm, you will get professionals who come armed with deep industry and functional knowledge, follow a strategic and high-impact approach, and invest adequate time and focus to provide you with a more thoughtful and targeted result. Thus, filling your critical, most senior roles will be faster and more seamless.
These professionals also have access to diverse candidate pools, including passive candidates (who aren’t actively looking for a change), and can persuade these top talents employed at other companies to consider moving to your organisation.
5. The Process Followed For a Fair and Equitable Search Process
Today, most organisations’ hiring strategies focus on diversity, equity, and inclusion, which makes it important to understand how your chosen executive search firm ensures a fair and equitable search and selection process. You should find out if the firm uses validated third-party assessments or asks all candidates the same questions and makes them pass through the same qualifying processes.
If the firm’s targeted search assignments exclude any candidates based on race, ethnicity, gender, or other such biases, prejudices, and discriminations, or the firm has a past track record that doesn’t sit well with your organisation’s DE&I policies, it will be wiser to take your business to another executive search firm that can help you find a diverse slate of candidates to hire from.
6. The Payment Structure
Executive search firms generally charge approximately 25% of the starting salary of the position they are recruiting for. Later, they might include commissions and bonuses. Some retained firms could even charge 33.33% of the yearly compensation of the recruited candidate.
Some companies may decide to pay their executive search partner in three separate stages, where 25% to 50% is paid upon the signing of the contract, 30% once a job offer has been made to the deserving candidate, and the rest of the balance when the candidate joins the organisation.
You could even negotiate any other terms with the executive search firm based on your company’s unique needs and the budgetary restraints you are working with. But it’s always better to ask and have a clear picture of the payable amount, how much to be paid at what stage, and how the contingencies will be covered, if any arise.
7. Client Communication Protocol
It pays to ask and understand how the executive search firm will communicate with you and your organisation throughout the search process. It’s equally vital to know how you and your team will communicate with the search firm. This will help ensure your expectations are aligned.
Not sure how to ask and what to ask? You can ask about the number of meetings to be held between you and your executive search partner, when and how candidates will be presented, and what’s the typical time to hire. If you have any specific business requirements or expectations regarding transparency and communication, you should express them clearly to ensure the search firm can meet them.
Final Words
Before hiring an executive search firm, you should determine the kind of search your business needs (retained search vs. contingent search) and the area of specialisation you require. You should also ask about the professionals or team who will work on your search assignment, the number of searches handled simultaneously, and the steps taken to ensure a fair and equitable search and selection process.
Knowing about the payment structure of the firm you are planning to hire and its client communication protocol is equally important.
Now that you know all these, go ahead and use this checklist to hire a suitable partner for your executive search. And if you find it difficult, let InHunt World executive search help you find, hire, and retain top talent, thus facilitating your business to grow and thrive.
This article was written by Sonali