When To Partner With An Executive Search Firm vs. When To Keep The Search In-house
We often get the question: Why should we hire an executive search firm like Sterling Strand when we could find an executive through our in-house people or recruiting team or through our network?
The simple answer is: Of course you don’t need to hire an executive search firm and of course your in-house team could find you the right candidate and of course you might have the right person already in your network. But the more complex answer is: An executive search firm might be worth your investment depending on the surrounding factors.
The ability to recruit the best candidates for senior positions is absolutely essential for any top-performing business. Both, in-house and executive search, have their advantages conducting those searches and so today we will cover the key points for you to consider when deciding whether or not you need to enlist some outside expertise.
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Tell us if this is you: Your company is going through rapid growth and you realized that you need to add a C-Level Executive ASAP. Your gut tells you this search might be harder to fill than any other role before but you need experienced leadership more than ever in order to continue or expand your level of success. Those are some high level reasons to turn to a trusted executive search firm. But if you’re still feeling unsure, here are some questions to ask yourself:
IS IT WORTH THE INVESTMENT?
Yes, you read that right.. investment. We use this word purposely because an executive search is costly — usually 33.3% of total compensation with a minimum of $75k or more. We believe that executive search firms should be brought in when a crucial role becomes urgent. That may not always be the case so ask yourself
- Is this role senior or critical enough to meet the minimum cost (usually, the minimum retainer is likely more than 33.3% of the compensation)?
- How much money do you envision making (or saving) once the executive is hired? And on the flip side, how much money do you envision losing (or it costing you) if the executive isn’t hired?
If the role is senior/important enough for it to be worth it, OR the cost of not filling the position is significantly higher than the cost of the search fee, then it’s definitely time to consider investing in the services of a retained search.
DO YOU HAVE THE TIME AND RESOURCES TO DO IT YOURSELF?
Perhaps one of the clearest criteria of deciding to partner with a search firm is whether you even have the capacity to run the search internally. More often than not, your in-house talent acquisition team is busy hiring for other positions across the organization. So before you decide to keep the role in-house, pause for a moment and ask yourself
- Do you currently have several open roles that you are recruiting for internally?
- Do you have the in-house capacity (25%+ of our time) to recruit for the executive?
- Do you feel confident about filling the talent funnel quickly and with high caliber candidates without neglecting your other responsibilities/searches?
If you don’t have the bandwidth to search for an executive in-house and don’t feel confident that you can fill it quickly with a top notch candidate, then it’s best to engage in a retained search. Executive search firms have many contacts across industries and have hired for similar positions before which unlocks a bigger network of the person you need on your leadership team. You might find yourself seeking the ‘needle in the haystack’ and an executive search firm can help you deliver a slate of candidates with the right mix of knowledge, skills and abilities along with the requisite cultural fit.
DO YOU HAVE THE KNOWLEDGE AND EXPERTISE TO DO IT YOURSELF?
Next to having the time and resources to run the search internally, recruiting executives requires a rare set of skills and expertise. Depending on your company stage and size, the reality is that your in-house team will not hire executives frequently and thus you might not have the knowledge or expertise an executive search firm can bring to the table. Tell us if the below statements are true or false:
- We know the industry’s top talent and where to find them.
- We know how to create a structured interview process including an engaging job description, the right interview questions to evaluate candidates fairly, and an amazing candidate experience.
- We feel confident that once we find the right candidate we can close them throughout the process and at offer stage.
If you answered ‘false’ to the questions above, then engaging in a retained search is the better option. Executive search firms spend 100% of their time creating tailored recruiting strategies for their clients to ensure they can identify the right slate of candidates quickly, evaluate them thoroughly and close them throughout the hiring process.
DO YOU KNOW WHAT GOOD LOOKS LIKE?
To establish a common understanding and way of defining what good looks like in a candidate takes time and effort. Creating a thorough hiring process is the first step in the right direction but having a good understanding of the current market is just as important. Have you or anyone you know ever said “Let’s just see what the competition is doing” or “What is the standard in our industry?”. If the answer is yes then you are part of a common conversation and you should ask yourself the below questions:
- Do you consider yourself or someone on your team as an expert when it comes to creating the right KPIs to hire for executives?
- Do you believe you or someone on your team has gained enough experience hiring for executives previously?
- Do you have comprehensive benchmarks to use as a reference for hiring the executive?
If your answers are no, you most likely need a skilled firm that knows all the necessary requirements for the new role in your company. The same applies when you want to change a position that might not have been successful. Executive search firms often have more established connections with industry leaders that they’ve built over time. Thus, they can tap into their talent pool and reach out to candidates that might not otherwise be on a company’s radar and can address more quickly if a candidate is suited for a particular position over another. Given the relationship search firms have built with executives they are also more likely to be able to present opportunities in a way that executives are more likely to consider.
DO YOU WANT TO SEE A VARIED AND DIVERSE SLATE?
Hiring from your network is a great source but often results in the same type of profile over and over again. On top of that, diversity is essential since a healthy variety of people from different backgrounds and cultures provide you with the balance of voices and diversity of thought that you need to be even more successful. We have no doubt that you want the following for your business:
- Greater Innovation and Creativity — Employees who are comfortable sharing their ideas with others will lead to greater innovation and creativity the more diverse your team is.
- Diverse Range Of Skills — Different backgrounds = different skill sets = enhanced business.
- Successful Employer Branding — Diversity & Inclusion are important factors for many candidates when it comes to accepting a job offer. Those that see all backgrounds represented will more likely accept the offer.
- Increased Productivity — Diverse teams who share their experience and skills allow colleagues to learn and work well with each other which results in higher productivity.
- Better Understanding Of Your Customers — Having a diverse workforce enables you to market your business to customers from a different background because they are reflected in the people working for you.
- More Talent To Choose From — If you truly encourage diversity then you will have access to a bigger candidate pool because you are not looking for a certain type of person but rather for skills that you need for your business.
- Higher Revenues — If a diverse and inclusive workforce is managed successfully you’ll yield higher revenues. Happier employees >> new ideas arise >> productivity increases >> greater success will follow.
All that being said, executives from underrepresented groups are currently not well-represented at the senior executive level. If you have not had the time to engage in diversity employer branding and marketing, an executive search firm will help you level the playing field by extensive research to ensure equal opportunities for all candidates.
DO YOU NEED THE SEARCH TO BE CONFIDENTIAL?
Sometimes, companies find themselves needing to fill an executive under full discretion. That could be for a couple of reasons
- Replacement of Existing Executive
- Succession Planning
Whether you need to confidentially replace an executive who is not working out or need a succession bench due a key executive planning to leave your organization, executive search firms offer a much needed veil of secrecy.
As you can see, there are many surrounding factors that should be considered when you decide on who and how you plan on filling your executive roles. In the end, your overall goal should always be to find and hire the best candidate as quickly as possible and only you can decide if you have the capabilities to do so in-house or if you need to partner with an executive search firm like Sterling Strand