What Is an Executive Search Firm? When Should Organizations Retain One?
What Is an Executive Search Firm?
An executive search firm provides specialized, hands-on recruitment services designed to identify, contact, and cultivate candidates that possess the skills, talents, experience, and character that clients have identified as crucial to their success.
At OE Consulting, we combine our executive search practice with decades of experience in organizational design and strategy to help clients ensure that their talent aligns precisely with their strategic goals and organizational structure. Our success placement and retention rates demonstrate the efficacy of this holistic approach to talent acquisition.
How an Executive Search Firm Works
Executive search firms rely on both existing networks and extensive research. Once a firm has worked with a client to scope a position description, research begins to identify the likely location of qualified candidates. The next phases—outreach, screening, cultivation, and in-depth interviews of the most promising candidates—are highly time-consuming. Finally, candidates are introduced to clients for their own interview processes. Most search firms help curate the client interview process and take part in compensation negotiations. At OE, our median search lasts for about five months while more nuanced searches for chief executive positions at complex organizations can last seven-nine months.
A Look at the OE Process
The Science of Search
Every firm is good at what might be called “the science of search,” ’including research, advertising, outreach, and structural interviewing. Otherwise, they would not survive.
OE prides itself on its artful practice of this discipline.
- Discovery. We expend immense time and effort getting to know our clients’ histories, cultures, contributors, challenges, strategies, and goals. We know that this hard work at the beginning of a process creates better candidates, better tenures, and greater strategic success for our clients.
- Whole Organization. We work to understand where talent will fit into the organizational structure and strategy.
- Creative Interviewing. Early round interviews are highly structured Q+A affairs. Progressively, interviews become conversations in which candidates feel increasingly free to speak out and reveal themselves.
- Personal Outreach and Cultivation. OE’s outreach process is highly personal. In addition to the common advertising and mass communication strategies, we make personal contact. We pick up the phone. The arts of good listening, good conversation, and good judgment animate our work.
The Most Common Positions Executive Search Firms Hire
- Chief Executive Officer
- Managing Director
- Executive Director
- Chief Investment Officer
- Chief Operating Officer
- Chief Revenue Officer
- Chief Technology Officer
- Chief Marketing Officer
- Chief People Officer
- Chief Development Officer
- Senior Vice President
- Vice President
- Program Director
- Program Officer
- Chief of Staff
- Development Director
- Communications Director
- Program Director
Understanding the Different Types of Executive Search Firms
There are tens of thousands of search firms in the marketplace. They come in almost as many forms as the organizations they service. There are, however, some archetypes. In executive search, there are four types of firms to note: retained, contingency, specialist, generalist.
- Retained firms (like OE) offer bespoke services for senior positions at a contracted fee.
- Contingency firms take payment after a candidate is recommended and hired. They eat what they kill, so to say. An organization may hire multiple contingency firms to fill a single position, and whoever gets there first gets the prize.
- Specialist firms focus on a particular discipline, position, or sector. Some, for example, work only to find Chief Financial Officers, or only in the investment sector, or solely in HR or marketing departments.
- Generalist firms (like OE) usually identify a larger swath of a market, say, any title across a whole sector: education, nonprofits, benefit corporations, family offices.
OE is a retained, generalist firm, meaning that our firm contains a hybrid of both of those archetypal services.
When and Why Your Organization Should Use an Executive Search Firm—And When to DIY
Executive search can be a big upfront expense. The acid question is whether the expense will pay off over time. That’s not as hard to calculate as it may seem.
The real value of search lies in three areas:
- The value that higher quality talent delivered over time.
- The cost savings, which is best conceived as the time that you and your staff did not spend on a search.
- The opportunity cost savings, which consists of the value you and your staff delivered (that otherwise would have been devoted to a particular search) combined with the cost of having hired lower quality leadership talent.
Using this basic framework can help you make a decision.
- It is probably not worth hiring a search firm if:
- You are seeking a professional to fill a role that is clear and replicable.
- Multiple qualified professionals are likely in your existing network and, therefore, easy to locate and contact through a ‘post-and-hope’ strategy.
- Your organization can offer a clear competitive advantage, whether through compensation, culture, mission, recognition, glamor, or whatever moves your particular talent market.
- It is probably worth hiring a search firm if:
- Your leadership team is fully occupied with creating value for your organization.
- You are seeking hard-to-locate talent.
- You believe that the very best candidates are presently employed and unlikely to be contacted passively through an advertisement or social media post.
- You require help thinking through compensation levels, available talent pools, or organizational design considerations.
- The role you are trying to fill is crucial to your organization’s success.
Benefits of Using an Executive Search Firm
In addition to those above, there are other advantages to engaging an executive search firm that may not be obvious at first glance.
- Numbers Game. As a rule of thumb, the larger the pool of candidates, the higher the quality of the finalists.
- Risk Management. A professional search firm will almost certainly be able to do more robust due diligence on finalist candidates.
- Compensation and Negotiation. A good search firm will understand contemporary compensation practices and may have insight into competitor cultures, practices, strategies, and challenges. This can help you come to agreement with the best in the field.
- End-to-end Support. Many search firms, OE included, will offer comprehensive support to an organization, bracketing an executive search with succession planning during the preparation phase, as well as helping with onboarding, acculturation, and executive support after a hire is made.
- And, Most of All, The best candidates are usually happy in the jobs they already have. If you are posting, rather than actively searching with an executive search firm, you are unlikely to come to their attention.
OE Consulting Can Help
If you are considering talent acquisition, experiencing turnover, or taking on a new strategy that requires new or different talent, reach out to us.
OE relishes any opportunity to have a non-transactional conversation. Many of our engagements are preceded by months of conversation, debate, reflection, and revision. For us, the most important thing in any engagement is the client/consultant relationship. Taking the time for conversation now builds understanding and trust and saves time and the misery of miscommunication later.
Interested in gaining an executive search firm partner?