Durler Consulting Rail

When choosing a recruitment company, it is a good idea to consider carefully what you want from the relationship and choose a recruitment company to suit your circumstances.

Agencies

Clients (companies seeking to hire) often tend to work with contingent agencies when filling mid- or low-level positions. Agencies generally rely heavily on their ability to generically process in advance a large number of candidates and therefore concentrate on mainstream roles to template the processing effort. They seldom work on an exclusive basis, therefore it is not rare for a client to work with a large number of contingent recruiters on the same assignment at the same time, in order to maximise the volume of candidates’ (job seekers’) CVs they receive. Contingent agencies do not get paid until the placement is made, and thus the cost and risk of conducting the search is shifted almost entirely to the agency or agencies. Moreover, contingent agencies often work with clients on a lower percentage fee basis relative to retained search firms, as they are mitigating their risk by swiftly filtering (often solely using their IT systems) a large number of pre-screened candidates. Agencies typically have a scarcity of people to fill roles (which are often relatively high turnover) and therefore operate in a ‘candidate driven’ market and consequently try where possible to advertise to attract candidates.

Agencies or contingent search

A second option (a variation on the first) is to hire one firm and give them an ‘exclusive contingency’ arrangement so that the money is still paid at the end of the search, but there is only one firm working on the search. This gives the firm the benefit of time to truly focus on quality and the hiring manager is not flooded with CVs. For more senior non-confidential or mid level roles, a client may start with the contingent search firms for a low-risk look at who is available on the market. With a role carrying a reputational risk or the need to quickly hire the best possible individuals available, this would often represent an unacceptable compromise on quality and speed. While contingency search firms offer a service with no money up front, like agencies they will often only work on those assignments that can be executed quickly and do not have the time to focus on high-quality candidates. This is simply an economic reality.

Executive search

A third option is to pay a firm an engagement fee or commit to a retained assignment. Retained executive search firms are firms paid on a retainer structure and tend to recruit at a very senior level or where skills are very rarefied. Almost invariably these firms are exclusive as well and therefore have more resources available to them and also bring a level of professionalism sought by many upper level candidates. At the retained level, a client would pay an increment to start the search, a payment when candidates are submitted and final payment when the candidate starts. These are success based milestones and are normally a third of the overall fee in each case. Fees typically vary from 25% to 50% of the first year’s remuneration package.

Executive search is typically used for filling purely senior roles (it is important that the target audience has some kind of reputation, otherwise the referral mechanism does not work; they also need to be senior enough to be inclined to network internally and externally, for the same reason). The roles are sometimes confidential by nature, or where there is a difficulty identifying high quality talent in a market crowded by mediocrity, or where there is a scarcity of talent generally.

Executive search firms

An executive search firm, or head-hunter, is a type of employment company that specialises in recruiting executive (senior) personnel for companies. True executive search consultants typically have a wide range of personal contacts within the area in question, a detailed specific knowledge of that area, and typically operate at the most senior level. Executive search professionals are also involved throughout all of the hiring process and beyond, conducting detailed interviews as well as only presenting candidates to clients where they feel the candidate in question will fit into the employment culture of the client. Retained recruiters work for the organisations who are their clients, not for job candidates seeking employment. Clients often prefer to work with head-hunter s who have performed in the past for them and by working exclusively and on a committed (retained) basis, the client generally develops a much deeper relationship with the recruiter, and receives a much higher level of service.

Types of executive search firms

There are broadly two different types of retained executive search firms in operation. Global firms tend to cover numerous different sectors. Such executive search companies will have many offices all over the world and the consultants will typically be split by which sector they are expert in. These firms are often publicly listed and may have dozens of offices in major generic business hubs. Boutique firms tend to be more sector specific. That is to say that they will cover only one sector and within this sector, they may only look at certain aspects and may have a single office (or very few) whose location is relevant to that sector.

Off limits and exclusivity

Search firms generally commit to off-limits agreements. These agreements prevent a firm from approaching employees of their current clients as candidates for other clients. Since they act as management consultants working in the best interests of the clients for whom they conduct searches, it would be a conflict of interest to simultaneously remove talented executives from those client companies. Search firms may decline assignments from certain companies in order to preserve their ability to poach candidates from those companies. Some large search firms may insist on guarantees of a certain number or monetary value of searches before they will put an entire large company ‘off-limits’.

Executive search methodology

Because the client is paying a retainer, the search is highly customised to the client organisation’s needs, with the search professional providing a consultative service throughout the process. It also recognises that the client also has a responsibility to cooperate closely with the search firm to protect the retainer and ensure that the search firm has a reasonable chance of success. Executive search firms typically have long-lasting relationships with clients spanning many years, and in such cases the suitability of candidates is paramount. It is also important that such companies operate with a high level of professionalism. Retained searches serve client employers rather than job-seeking executives.

Executive search firms often also provide clients not just resumes, with legal market intelligence gleaned from contacts within their clients’ competitors and insightful, consultative information about the market in general.

Targeting methodology

Quality oriented search firms work hard at cultivating and continually updating their network of contacts (or ‘sources’). Some of the best candidate referrals come from people who could be candidates for the job themselves but for any number of reasons are not interested at that particular time. When a search assignment is awarded the search firm will be ready to start recruiting potential candidates based upon fit with a written or verbal job specification developed in conjunction with the client. The sources are contacted by a ‘researcher’ and potential job candidates are identified as a result of a recommendation, or a source may put themselves forward as a candidate. This process establishes an evolving ‘long list’ of perhaps dozens of people.

Another way to identify potential candidates involves search firm ‘research’, which is contacting targeted people in specific companies who appear to fit the job profile in some logical manner. The better the firm’s network of sources, the smaller the need for more speculative research, which is a hallmark of less specialised search firms.

The job seekers are then qualified and presented in a one off or rolling ‘short list’ (normally four to six people), as previously agreed, to the client by the consultant. Assessing degree of potential fit of the candidate with the job specification is a key activity for the search firm, since the most common reason a search consultant is engaged by a client company is to save time and effort involved with identifying, qualifying and reviewing potential candidates for specific leadership positions. Like any specialist, (in comparison to the fees they charge) a good search firm is simply too well connected, staffed and practised to make internal non-specialised recruiters economic.

Job seekers

Job seekers who qualify for senior executive level searches often mistake head-hunters for career transition or outplacement specialists. They do not actively place out-of-work individuals as, at the top of the pyramid, there are relatively speaking many more quality people than roles (i.e. it is a ‘client driven’ specialism) and therefore economically it would be a show-stopper to spend too much time on individual career consultancy – the client is the company paying the recruiting firm. It may be worthwhile to contact executive search firms if you qualify, but they are driven by their specific assignments for their clients: they find people for roles, not roles for people. Executive search consultants can be ‘career makers’ for some individuals, but for most, this will not be the way they will find their next role.

Managing reputations

However, managing a client’s reputation is a critical role for an executive search firm to play and following through on reasonable commitments made to job seekers from long list onwards is important to maintain goodwill for the search firm and for the client. It is therefore critical that clients consider whether the search firm will enhance or detract from their corporate reputation as they conduct the assignment. Very aggressive companies will naturally side with search firms and methods with similar hallmarks and so on.

If you are an individual with access to an excellent project or commercial opportunity, perhaps we can help. For several months, we have been looking at project ideas in their infancy, sometimes even with only one individual driving the establishment of the business.

We have contacts all over the world which we indeed use typically to fill conventional search assignments. However, for such projects we are very happy to work with a project initiating individual or team to ‘wrap around’ a balanced board and senior management (when the timing is appropriate) which will be able to assess and promote a project. We will behave as a people partner to the new business in return for equity in the start up business. This is on a success only basis, there is no obligation for either a consultation or our assistance unless specially agreed in writing. If you have a project and are seeking to find the people and funding to go with it, please get in touch privately, we may well be able to help. Likewise, if you would like to privately suggest any refinements or other complementary ideas, please let us know.

If you have an interest in this as an idea as a topic of discussion, we welcome your comments on this page.

The company must recognise that the recruitment process is a partnership with the head-hunter and opening a shop window to the company; therefore:

1. Be clear internally on what attributes are essential – but be open minded as to the rest, you will be surprised what options may present themselves as a result

2. The company should consider its reputation for professionalism (whether that be current or aspirational) which it will be communicating by its choices and actions in structuring the process, therefore:

• Carefully consider its choice of recruitment partner (and be prepared to be assessed by them for ‘fit’); with this in mind, be informed by them as to what your ‘needs’ might be, as distinct from your stated ‘wants’

• Strongly consider awarding exclusivity to a single recruitment partner for senior roles to ensure there is no unseemly behaviour in a rush for results. No everyone in the sector is an angel

• It is critical that trust is established from the start and maintained with all parties. Information should be shared with clarity but with consideration to legal and moral confidentiality

• Carefully consider what steps are appropriate and necessary for a full and incisive process including interviewers, interview stages and manner of assessment. Remember economy of effort – there is no merit in prolonging for the sake of it, if you feel inclined to do so, it may be that you need to examine weak points in the process

• Ensure that there are no conflicts of interest i.e. incumbents or managers who may favour a choice incompatible with the company’s goals

• Interviewers should be trained – your recruitment partner will normally provide this service gratis

• Conduct interviews brilliantly

• All measurements, tests, techniques and interviewers should be appropriate to the level of candidate to be interviewed and the role to be interviewed for

• Be clear in writing what interview expenses will be covered by the company and ensure that this is circulated to each candidate

3. There should be a clearly identified client lead (they must be empowered and motivated to make decisions) to deal with the head-hunter, preferably the recruiting manager

4. The company should consider clarity and openness to be key reputation management issues. It should therefore:

• Clearly definite process timescales; make best efforts to keep to them; let all process stakeholders know as soon as it is clear that it is not possible to keep to them. Clearly define the process, filtering tools, measurements and feedback; let people know what they are committing to

• Have some clearly stated skills and behavioural attributes which you are seeking and share them with your candidates so they know what you are looking for and can provide appropriate evidence – guessing and surprises are for children’s birthday parties

• Be scrupulously and conspicuously fair

5. It is always useful to have an administrator, like a PA, as an administrative liaison for interview slots etc, with access to all the client interviewers’ diaries – and the mandate to commit the time!

6. Unsuccessful candidates should have feedback given to them verbally by an individual of appropriate seniority and involvement to discuss in detail – that may be a commercial manager or recruitment partner

7. Always thank a candidate for investing their time

8. Don’t relax when an offer has been made; consider and cover off: buy-backs from current employers; alternative offers a candidate has received; remember to induct properly and consistently with the recruitment process, ensuring that your senior new starter has appropriate communications, IT, office equipment and briefing without having to ask

9. There should always be follow ups as part of the recruitment process to at least six months after the start date by the company and its recruitment partner to resolve teething issues

1. Make sure your process, attributes and filters are appropriate to the level you are recruiting for. They reflect directly on you
2. Define your interview process up front and let people know what they are committing to. Keep to this and the timescales you set out
3. Have some clearly stated skills and behavioural attributes which you are seeking and share them with your candidates so they know what you are looking for – surprises are for children’s parties
4. Be clear on what are essential attributes, but be open on the rest, you will be surprised what options evolve as a result
5. You are choosing a senior employee – they are seeking a mandate in the job, ensure that you establish these as being categorically mutually beneficial
6. In interviews, try to put candidates at ease, you will find out much more; show respect and be polite
7. It is critically important to RESERVE JUDGEMENT and properly evidence any opinions you develop
8. Remember that interviewing is not natural for most on either side and nerves can affect anyone, no matter how senior
9. Work within the laws of the relevant jurisdiction(s), keep records as required and anticipate the need for visas etc. including evidencing for compliance purposes
10. Give clear, positive feedback to candidates who have flattered you by committing to the process, it is good for your reputation (even if they are not right for you, you can show appreciation for their skills)
11. Remember that candidates who do not get the job will be either advocates or critics – make sure you influence that outcome in your favour, it is a small world and a smaller sector