“Executive Search” is a fancy term. Use of this term while referring to ones portfolio of services, makes a recruitment services firm look fancy and appealing to clients as well as to the job seekers. Before proceeding, it makes sense to clarify what we mean by “Executive Search”. For our reference in this post – the term “Executive Search”, would imply the search for senior and leadership team members that are key to a business. And when we say search – it implies “search” supported by a good quality “research”. Now, there are always a good bunch of firms providing leadership and senior management hiring support – these could be global search firms, boutique search firms or any recruitment services company which address recruitment needs across the board. Executive Search firms are mostly focused on senior level & leadership hiring.
Most of the executive search companies pick up leadership hiring assignments on an exclusive & retained engagement model, where in the firm engages on a mandate on an exclusive basis.The assignment appears more like a serious consulting engagement, rather than – “get someone and we will see if it works” model. The payouts is in form of a retainer which is non refundable even if the search is unsuccessful. The retainer is generally paid as per a multi stage model – that starts with an advance payment, and subsequent payouts are linked to completion stages as outlined in the agreement or terms of service. Along with the retainer the clients also need to reimburse – travel, stay, other expenses that comes by during the process of search. As we said earlier, its more like a consulting engagement. Now, all that is expensive. Really expensive.
Just wonder – if you are looking for a functional leader at a compensation band of about Rs. 1 Crore ($ 200,000 approx), the retainer ship may be pegged at about Rs. 40 Lakh ($ 80,000) approx. And , well what a waste – if you don’t end up getting the right person. You may add on a load of another 5 – 10 % to the cost towards other business expenses and re-imbursements. Why then, would you need a retained search firm ?
For an employer who needs to look at leadership level hiring, and is contemplating availing the services of a search partner – some questions that may surface are:
- Why do we look at a retained search engagement ?
- Do we need to place all senior management positions for retained search or we can be selective ?
- Does it make sense to award an “exclusive” mandate ?
- What kind of positions should ideally be passed on for retained search ?
- What is the value add of a retained search engagement vis-à-vis a contingent search engagement ?
- If I decide to go for a retained search for some of my positions, do I offer all my key positions to one firm or should I juggle between a couple of firms for various positions ? What should be the deciding criteria ?
- Should we opt for a boutique search firm operating locally or should we get a global “well established” search firm ?
- Does the “brand” or “name” of a search firm add value to the process of search ? Should it deserve a premium ?
We would be placing our pointers on the above in subsequent articles. Meanwhile, we would love to see you share your thoughts at share@hiringsquare.com or in the comments section below.
The Case for Retained Search Firms: If you are a partner & practice leader at an executive search firm please send us your thoughts and inputs at praveen@hiringsquare.com. Your inputs would be captured in our subsequent write ups, or may be presented as a separate independent post.
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