One of the fundamental reasons for using an executive search firm is simple- most of the best prospective job candidates are sufficiently comfortable in their current positions, and they are not looking to make a change. This raises obvious questions about how and where to find great job candidates, and how to reach out to them. Naturally, the issue of confidentiality is also very important for both hiring companies and job candidates. Indeed, most senior level positions are not advertised to the general public, and executives who are interested in and qualified to fill such positions are not likely to have a resume posted on the internet. This creates a serious challenge for firms seeking to hire the best possible employees.
On the other hand, many mid to senior level managerial positions are posted on both the hiring company’s and internet job boards, and there is often no shortage of applicants willing to submit their resumes for posted positions. This leads to another problem- too many applicants, usually with the vast majority being completely unqualified for the position to which they have applied. This leaves the hiring manager or Human Resources Department caught up in culling resumes and trying to glean which applicants are worth contacting. This can easily become a costly and unpredictable ‘numbers game’ where finding good candidates is full of uncertainty.
Another issue pertains to ‘sourcing’ those high-quality candidates who are already employed elsewhere. Imagine if a Human Resources Officer or hiring manager from a company started calling employees at a competitive firm in an effort to hire away top talent. Such a practice would be foolish, unethical, likely to result in breaches of confidentiality, or even litigation.
Even where good prospective candidates can be found, the process of assessing their true qualifications becomes the next hurdle. It has been our experience that most companies lack a robust and consistently effective methodology for screening and assessing candidates. Indeed, hiring practices, especially at the mid and senior management levels, is a core business competency that most firms lack and, as explained above, are simply unable to execute effectively. This is particularly true for higher level positions, and even more of an issue for positions requiring a combination of technical and managerial competencies. While many candidates might represent themselves as well qualified, how can you know for sure? If you don’t have a structured, methodical approach to hiring- something thorough, consistent, and comprehensive- you are probably leaving too much up to chance. You run significant risk of a hiring failure.
This is where the use of an executive recruiting firm can, and often does, make a huge difference. Executive recruiting (also called “executive search”) firms can serve as a talent sourcing and evaluation entity and also maintain confidentiality among the parties involved in the process. There are, broadly speaking, two different types of firms that engage in executive recruiting, retained/exclusive search firms and contingency firms. There are significant differences between the two.
The biggest difference, is the fee arrangement. A contingency search firm will only collect a fee if their candidate is hired by a client company. Contingency recruiters usually do not have an exclusive arrangement with their clients, so they work in competition with other contingency firms to place candidates. Contingency recruiters may also present multiple opportunities from different firms to a single candidate. The very nature of contingency recruiting makes it a game of both speed and numbers. These recruiters are competing with each other to be the first to identify job candidates and introduce those candidates to the hiring company. Thus, there can be an incentive for a recruiter to inundate their clients with candidate resumes as quickly as possible, hoping that one among the many will be hired. Thus, the client, or hiring manager, is often flooded with resumes and is therefore confronted with the challenging task of culling through them- the same problem that arises when they post jobs on the internet themselves. For this reason, contingency search often requires considerable involvement from Human Resources for screening, interviewing and evaluating job candidates.
The quality of service one might receive (as either client firm or job candidate) from a contingent fee recruiter can vary considerably. In any event, the client/recruiter interaction is based more on a given transaction than an ongoing relationship. In a contingent recruiting relationship, the recruiter has no guarantee of receiving payment for services rendered. Thus, they can’t afford to invest much time in a search beyond basic candidate identification and submission of resumes. With a retained search, the client has the full commitment of the recruiter; who therefore has the incentive to commit considerable resources and effort to the engagement.
Contingent firms tend to focus on the ‘low end’ of the executive search business, often sourcing candidates for positions such as sales representatives, technical specialists (such as a chemical engineer or computer systems technician), as well as mid to upper level managerial and professional positions. Less emphasis is placed on finding an excellent candidate, and more about presenting candidates who are, at the very least, potentially qualified for a position so that the client can conduct their own assessment about the candidate. Contingent firms will sometimes also represent job candidates if they have access to someone with a possible good ‘fit’ with a client company.
Retained search firms generally work at the higher end of the job market to recruit senior executives for key positions. Search assignments are performed on an exclusive basis, usually with an initial retainer, staged payments, and final payment due when a candidate is hired. Much greater emphasis is placed on hiring the most qualified candidates. This process begins in a collaborative effort in a consultative relationship between the recruiter and client. They must work together to clearly define the details about the position to be filled, and the characteristics and capabilities of the ideal candidate. The consultant must take the time and make the effort to know the client company thoroughly, and to work through the intricate details of the position to be filled. This includes reaching agreement on a clear definition of the professional competencies and personal qualities of the ideal candidate before the search process begins.
The retained search process is a much more proactive and systematic process that often requires a good deal of diligent ‘sleuthing’ to find and reach out to the best possible candidates. Of course, candidates are always presented to one client at a time. A good consultant will provide insightful feedback to the client about the perceptions of their company by prospective candidates and other industry contacts, and also provide intelligence on matters such as compensation and company culture.
Ideally, the recruiting consultant will have a deep knowledge of the client’s industry. Many successful recruiters have worked in the recruiting and human resources industry for much of their careers. This may raise the question about how capable are they of accurately assessing the true competencies and personal qualities necessary for evaluating how successful a candidate might be for a position requiring specialized knowledge in a specific business or industry. Some of the best retained search consulting firms are staffed by experts who have extensive, direct experience in the niche or industry they serve. By making a ‘second career’ out of executive recruiting, they are often most adept at sourcing and evaluating the best possible candidates.
Indeed, many recruiting firms, both contingent and retained search, specialize in one or more industries. Of course, some firms will claim to specialize in such a wide range of industries that it may cast doubt on their true level of expertise in a given field. It’s also safe to say that some job positions are far more ‘fungible’ than others, and therefore much easier to fill. In other words, calling yourself an ‘expert’ doesn’t make you one, so it is advisable to verify the credentials of a recruiter claiming to specialize in a given industry before committing to a retained search.
The best recruiting firms will go through an extensive, disciplined candidate assessment and evaluation process before the candidate is presented to the client. The client should have no doubt about the candidate’s professional competencies and personal qualities that are necessary to succeed at the position to be filled. This is where the GDI Talent Acquisition Practice greatly surpasses other executive search firms. We specialize in recruiting for the manufacturing and distribution industries only, and we understand hiring is a core business process that must be executed excellently.
Using our own proprietary assessment and evaluation instruments, GDI’s Talent Acquisition Practice specializes in matching the best candidates with each position we are engaged to fill. We have a far-reaching network of relationships with high-performing manufacturing and distribution industry talent, giving us unparalleled capabilities to fill almost any management and technical position within these industries. Our clients value our deep industry expertise, valuable insights, rigorous candidate evaluation methodologies and commitment to the success of clients and candidates
At GDI, we are leading national experts in the manufacturing and distribution industries- we know it better than anyone, and we have extensive contacts throughout these industries. Through years of extensive research, we have developed a systematic, proprietary framework to assess candidates – with remarkable accuracy – and to predict their ability to perform effectively in a given position. The things that enable an employee to excel is surprisingly not what you think. Technical skills alone are not enough to foster high performance in any individual, and experience is a poor predictor of superior job performance. Our candidate evaluation methodology is a thorough, disciplined, comparative process designed to assess all relevant forms of competencies and personal qualities, as well as individually rank all leading candidates for a position.
We take the uncertainty out of the hiring process!
This article was originally authored by Steven Kirkpatrick.