by David Portney, Marketing Manager
Stiles Associates

There are fewer more important responsibilities for a company than having the right senior leadership. Ideally, this would be accomplished by developing employees and promoting from within, but that’s not always feasible. In situations where top executive talent must be brought in from the outside, organizations can tap into their own talent acquisition abilities or partner with an executive recruiter to achieve the same goals. Making the right decision here could be the difference between a company bailing out a ship or reaching their destination ahead of schedule.

Here are the five considerations needed to make that decision:

1) The internal team responsible for hiring the next executive

Understanding this team’s (or person’s) knowledge of the functional role and their capacity to execute the search is absolutely essential. Time constraints can doom a search even if the team has a deep understanding of the ideal candidate and knows the ins and outs of the position. Especially in the current labor market with still-high demand for the A-players, it takes time to simply find the right candidates who could be interested, let alone move quickly through the interview, vetting and offer processes.

Some companies have a talent acquisition army at the ready to find the next Chief Operating Officer, but is it able to properly find candidates for a position that requires a deep technical and cultural understanding? If the answer is yes, terrific! However, most companies can’t afford to chance an executive hire to those without the experience and track record for hiring these types of roles.

2) Access to top passive talent

Having longstanding relationships with an industry’s top executives who aren’t actively looking is a binary situation: Either they have it or they don’t. For those that don’t, companies need to partner with those that do. Executive recruiting firms like Stiles Associates can have decades of experience establishing and cultivating relationships with leaders who reliably return calls and messages. The benefit of this level of access is even if a particular executive is not interested, this person often has knowledge of other individuals who could be – thus, the network of qualified candidates continues to organically expand.

3) Budget

One of the biggest barriers to partnering with an executive recruiting firm is cost. Many companies feel they simply can’t afford to pay hiring fees, as that money needs to be saved to make competitive offers to the candidates. However, there are other costs to consider: The labor cost of doing it yourself and the cost of hiring the wrong person.

There are many estimates that peg the average cost of a bad hire to be up to 30% of the new employee’s first-year salary. That means if the new COO starts with a $300,000 salary, hiring the wrong one costs an additional $100,000 – and that doesn’t even include the cost of onboarding and potential negative cultural effects. The best way to hedge against bringing on the wrong person is to outsource it to a recruiting firm. In fact, many will offer some type of guarantee, so if for any reason it doesn’t work out within a window of time, they will keep working with companies to get it right.

4) Time

Rushed tasks have a low success rate and are riddled with errors, and hiring is no exception. It must be done efficiently, carefully and intentionally, which can be difficult for internal teams to accomplish. Executive recruiting firms have historically faster lead times due to a proven process and a dedicated team. If time is money, spending extra time than needed to hire the right person is actually costing companies more than they think.

5) Confidentiality

Replacing a senior leader who is still on the team can be difficult and uncomfortable. Sometimes, the leader doesn’t want to announce their resignation until a replacement has been found, or perhaps the decision to move on isn’t amicable. In those cases, the most discrete way to execute these kinds of searches is keep the internal team tight and outsource the bulk of the work to an executive recruiting company. There’s only so much work and time an internal team can handle without colleagues figuring out what’s going on.

By considering the above factors, companies can evaluate whether partnering with an executive recruiting firm is the right decision. Each hiring team will have its own criteria to consider, but sailing to success is best achieved by partnering with experts in their areas – whether that’s already within the organization or outside it.