by David Portney, Marketing Manager
Stiles Associates
Finding and bringing in the industry’s top leadership talent is one of the most important responsibilities companies have, yet they often struggle to define the best methods to secure those individuals. Many turn to their own internal human resources departments to spearhead the searches, but they can easily overwhelm a staff and prevent them from performing their many other responsibilities. If companies even have specialized talent acquisition employees, they often don’t have the network that’s required to truly access the A-players.
This is why organizations across the globe have continued to use executive recruiting firms for roles considered Director level and above. While this requires additional financial resources, the money is well worth it if the true cost of a bad hire is considered, which the Department of Labor estimates at approximately 30 percent of the individual’s first year expected salary.
For companies considering this option, it’s important to note three of the most common types of searches that can be conducted on behalf of a client.
Retained
A retained executive search, which is how Stiles Associates conducts most searches, is the lone entity recruiting for the role and has either an upfront fee or a payment schedule that requires the client to pay a percentage as they reach certain benchmarks in the search process. For example, they may have one-third of the total cost due at the search kickoff; one at the moment a candidate accepts an offer; and the final payment due in the weeks or months after the hire’s first day.
The benefit of this type of search is it forges a close relationship with the executive recruiting firm and the client, holding regular check-ins, updates and recalibrations to ensure the process is nimble and efficient. This gives the firm the freedom to utilize a quality over quantity method, so the client only formally interviews the top pre-vetted candidates without spending excessive time putting lower-level talent through a lengthy evaluation. That’s not to say retained firms don’t move quickly, but those recruiters are incentivized to find the best leaders for the long haul – whether that takes two weeks or two months.
Utilizing their proprietary networks allows them to target passive candidates, pitching those who aren’t actively looking for a new role but would consider it for the right opportunity. These passive individuals are more likely to be in higher demand with better qualifications and are less likely to apply via an online job board than active candidates.
An advantage to maintaining this bond is as candidates are presented and assessed by both the firm and client, they together fine-tune the role itself; more astutely evaluate candidate backgrounds and experiences; and offer a competitive compensation package based on current market demands. Essentially, they stick with the client throughout the process and aren’t afraid to voice their opinions if any red flags appear or if there are bright spots the client might have not previously considered. This is truly a more personal experience focused on quality.
Contingency
A contingency search means the executive recruiting firm only gets paid if the client organization hires one of their proposed candidates. This encourages the firm to put forward a higher quantity of candidates – often using online job boards to attract more active job-seekers – instead of the highest quality ones, placing the hones back on the client to do additional evaluating, screening and vetting of the resumes that come in. Companies can end up spending a lot more time kissing frogs than they had likely anticipated, ultimately causing them to spend less time focusing on their non-recruiting departmental needs.
The nature of the relationship is typically very different than its retained counterpart. While a retained search incentivizes constant communication with the client and recalibration of the role, contingency firms often work more independently. With time being money, their priorities might shift from search to search if a bigger reward drops in from a different client. When a company only gets paid at the end of a search, they’re more likely to place greater emphasis on those that can get them there in a quicker fashion.
The pool of true top talent is quite limited, so it’s not uncommon in contingency searches to have multiple entities reaching out to the same A-players about the same roles, ultimately making the hiring client look sloppy and disorganized. For this reason, contingency searches might be more useful for clients on the hunt for less senior roles.
Interim
Unlike retained and contingency, Interim focuses exclusively on temporary roles that are usually paid at an hourly, weekly or monthly rate. For companies bridging a talent gap, undergoing a cultural transformation or needing to address a critical temporary need – hiring an Interim leader is a great solution. Many scramble to fill these gaps and suffer significantly for it because these temporary needs are often urgent – and sometimes existential – to the company or project. When organizations need immediate help, recruiting firms with explicit expertise in this area, like Stiles Associates, have a special network of individuals at their disposal who are able; willing; and qualified to step in and make an immediate impact.
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