Kansas City’s leading Executive Search and Talent Management firm, Cornerstone Kansas City provides insights to help company leaders decide if they should outsource the hiring of a new executive and to what type of recruiting firm.
Making the decision on hiring an Executive Search firm can be a challenging experience. Human Resources Leaders generally do not have the tools, capabilities, or time to invest in the extensive process of finding a qualified, specifically-matching executive for the role needed at your company. Not only do you have to take a risk with an investment, you have to sort through executive firms to find which one can serve your needs ultimately, and trust that you will be delivered with an executive that will result in a long-term value add for your company.
Should a company outsource the hiring of an executive to a recruiting firm? Shouldn’t talent be easy to find on LinkedIn and through the Internet? When should you consider a professional recruiter, and which kind of recruiting firm is best?
This series of articles will help you decide.
In this 4:4 article series, Executive Search Recruiting – Retained Vs. Contingency, written by Executive Search Recruiting specialist, Dan Heiman, he answers the tough questions executive hiring managers face when on the subject on hiring key talent to promote growth and add value where it is needed most.
Article 1 of 4 – Making Decisions Around Hiring Executives
When companies seek to hire management and professional talent from outside their organization, they have three options. They can decide to manage the process themselves, using advertising, the Internet, and/or a contracted researcher to identify potential candidates; they can engage contingency recruiters, or they can use a retained executive search consultant.
First, Internal or External?
Doing your own hiring means you or a human-resources executive makes an effort to find qualified applicants, typically by advertising the position in the print media or on the Internet. Then you have to screen responses, interview candidates and select the person to be hired.
The advantage here is that the company retains full control of the process.
There are several disadvantages:
- many qualified candidates (including some of those most qualified) may not see or respond to an ad or post their resumes on the Internet;
- you will only find those actively looking and not possible candidates currently working who might be interested;
- in order to discover those who are qualified you are going to have to review a great many who are not;
- once qualified candidates have been identified, you face complex, time-consuming and sensitive issues of negotiation and reference-checking—without the benefit of a third-party professional.
- Your Human Resource executive is either likely already tied up with their responsibilities and a critical decision such as hiring a senior level executive for your company requires an intensive search process
- The Human Resources leader may not be specialized in the methods for hiring a Chief Financial Officer or your next CEO.
As a result, many organizations prefer to use independent executive search recruiters. But how do they decide whether to use a contingency recruiter or a retained executive search consultant?
Next: Contingency or Retained?
On the surface, it appears to be simply an issue of how the recruiter gets paid. A contingency recruiter earns a fee only when the organization hires someone. A retained search consultant, on the other hand, is paid in advance to conduct a search that usually results in a hiring—but not always.
But that difference, when you think about it, dictates two completely different methods of searching for the person you need — and usually, ends in two quite different result scenarios
The retained search firm is being paid to conduct the search. They, therefore, undertake a much more exhaustive process. The contingency search firm is paid only when someone gets hired. Their search process is skewed to producing results rapidly since the more time spent the less profitable the mandate.
Contingency recruiters typically work with a large number of job openings, and, using a database of known candidates, look for matches on paper and send those candidates’ resumes—as many as possible—to clients for possible interviews.
The retained search recruiter, on the other hand, maintains exhaustive databases of candidates, cultivates contact in sectors in which they work frequently so they know who might be restless, and pre-selects the candidates carefully using advanced assessments for suitability and job fit. You only see the finalists.
If you’re still not sure whether to use an internal resource or to hire an external recruiting firm, read our next article in the 4:4 series on Executive Search Recruiting – Retained Vs. Contingency “When To Use an Executive Search Firm” to weigh out your options and help you determine what type of executive recruiting firm you need to handle hiring your next Senior-Level or C-Suite Executive.
For More Information, please contact:
Cornerstone Kansas City
“We Help Companies Thrive Through People”