Tips on interviewing executive search firms
Readers frequently request guidance on how to evaluate advisory firms. This series of articles presents information on how to interview and compare advisers in a variety of disciplines.
Even if you have a deep bench at your company, there are times when an internal candidate is either not ready or not right for the leadership role you need to fill. Today, because of a high demand for top talent, the market favors the candidate. Finding talent is challenging, and finding the right leader is even more so. An executive search firm can help you find the best person, but first you must find the right firm for your organization’s needs and culture.
Do your homework
• Define the role you seek to fill. Consider what the job will be in the future based on your company’s strategy. NHL star Wayne Gretzky frequently quotes his father, Walter, as saying, “Skate to where the puck is going, not to where it has been.” Think of the skills you need to take your company to the next level. What will be the impact of the role?
• Force-rank the qualifications for the position. Distinguish the “nice to haves” from the “need to haves.” There may be a candidate who does not meet all of the qualifications but is a strong cultural match. Would you consider surrounding the person with the resources that will bridge the gap?
• Gather important documents. To present your company’s profile in the best light, pull together a position description, an organizational chart, bios of relevant employees (including peers of the position and those to whom the new person will be reporting) and compensation details. This is critical for family-owned and privately held companies, since much of the information the recruiter and potential candidates will need is not publicly available.
• Ensure there is buy-in and support for the role from key constituents and family members in the business. Alignment is critical between all parties before a search is initiated. If there is not buy-in, a strong candidate will often notice a disconnect during the interview process. This may raise potential concerns from the candidate and could sway their interest in the role. Ultimately, if there is not agreement and support for the position, this could impact the success of the new hire.
• Decide what kind of experience you want your search partner to have and screen several firms. Do you need an industry expert, a functional expert, a generalist firm, a large firm or a boutique? Research the firms and seek out referrals from your network. When you receive them, ask why the firm is being recommended, inquire about the client’s personal experience with both the firm and the specific recruiter, and ask what they would have changed about their experience to improve it. Reach out to several search firms and ask for their marketing materials.
• Have your internal process outlined and ready to be activated. Identify search committee members and select an individual who will serve as the central contact for the search firm. Determine what type of feedback you desire from your search partner during the process and the frequency of status updates. These preparations will help you decide if a search firm will meet your expectations.
Understand the firm’s business model
Like other consulting firms, a retained executive search firm is engaged for its advice and expertise. The firm is paid a fee based on the position’s targeted compensation. The search firm works exclusively on behalf of the client with no other firm involved. This protects the client’s best interest and will avoid confusion in the market.
A contingency firm’s fees are also based on the targeted compensation but are paid only after someone is hired. The firm may not exclusively be working on behalf of your company and may share candidates with other companies to generate revenue. Many candidates will not allow a contingency firm to represent them in the market for fear of losing confidentiality.
The majority of searches for leadership and executive positions are conducted by retained executive search firms. Contingency firms are more commonly engaged for lower-level roles.
Questions to ask
• What are your success rates? Metrics may include completion rate, client repeat rate, diversity placement, average length of completion time, the number of blocked companies (those companies that the firm cannot source because of a current or previous engagement), and retention rate of hires. Ask about any failed searches and what led to such an outcome.
• How will you get to know our company? Who will spend time with your team to learn about the organization and culture? When engaging with strong candidates, your search partner must be able to properly represent your company and the job opportunity as well as talk about your leadership team.
• Who will be doing the search? Ask to meet the search consultant(s) who will be representing your company in the market. Will they make a good impression on your behalf? How will the firm position your company/brand in an effort to draw candidates who may not be familiar with you?
Candidates will be exposed to the recruiter on the phone, through email and in person. During your screening process, consider how the recruiter makes you feel. Are they energetic and enthusiastic? That is what your potential candidate market will experience.
Find an executive search firm that views itself as your long-term partner. Choose the firm that is dedicated to bringing you talent, no matter how hard the search is or its duration. Engaged recruiters are transparent and want your input.
Review your current recruiting process with your chosen search partner to identify what might be improved. During the search, be prepared to respond quickly to questions from the firm. Additionally, once the search is under way, providing timely feedback on candidates is essential. The more information a search firm has, the more quickly they can hone the search and find the right candidates.
Your interviews of search firms will help you choose the right one. A good recruiter knows how to find candidates, but an excellent recruiter can balance the science of recruiting with the art of identifying and securing talent.
Engaging a search firm is investing in your business. If you buy capital equipment, its quality should be worth the investment. Keep the same level of expectation for your search firm, since these professionals are finding your future leaders.
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