Everything you need to know about executive search
Everything you need to know about executive search
Executive search is something every organization will need to attract top leaders in times of change or growth.
Otherwise referred to as leadership recruitment or executive recruiting, executive search empowers businesses to find, attract, and secure talented leaders with the skills to drive success. But the process can seem complex and daunting for beginners. How does executive search work and what benefits do hiring an executive recruiting firm offer?
Keep reading to find out.
Executive search is a specialized form of recruitment that organizations rely on to find the most qualified, highly skilled, experienced candidates for leadership positions.
Leadership recruitment consultants find the experts capable of filling senior leadership roles, representing the in-demand soft and hard skills that result in greater organizational success.
As you’d imagine, this kind of top talent is unlikely to be scouring job boards to find their next role. That’s why executive search specialists identify and approach qualified candidates suitable for their client’s organization — whether they’re on the lookout for a new opportunity or not.
This is the main difference between an executive search and an executive headhunter firm. The latter find candidates who are actively looking for a new position, either because they’re unemployed or ready to leave their current role.
Organizations use executive placement companies to fill time-sensitive leadership roles efficiently and effectively. These specialized search teams can dedicate themselves to finding the perfect candidate while clients focus on their day-to-day work. Executive search also ensures that the most important senior positions are filled by the best leaders possible.
Hiring an executive search service liberates organizations from the stress, strain, and time-consuming effort involved in searching for highly skilled business leaders on their own.
Another key advantage is the time a search specialist invests in attracting the right talent and understanding how their client can retain the candidate’s interest. This is crucial when aiming to fill roles of exceptional strategic value to an organization, such as CTO or VP Product.
No organization can afford to overlook the importance of finding the best people for leadership roles, but bad hires are surprisingly common. Gallup research shows that businesses fail to hire candidates with the right talent for a position in 82% of cases. And the cost of a bad hire is believed to be 30% or more of the employee’s first-year earnings — that’s a substantial sum for leadership positions.
In-house HR departments may be involved with hiring junior and mid-management workers, but they’re typically ill-equipped to bring verified, passive leaders on board. They may fail to identify and establish communications with candidates in high-responsibility roles due to a lack of resources or network connections. So that’s where an executive search specialist steps in.
Internal recruitment is a common solution for filling vacancies in a quick, convenient way — but employees promoted from within an organization may lack the specialized skills, best practices, and training required to lead teams to success.
Sometimes a fresh perspective is what’s needed to transform a business from the top down and that’s something executive recruiters can help you achieve.
Executive search consultants may secure an upfront fee (retainer) to fill a senior position.
Search firms working on a retainer basis may guarantee to perform searches again if a recruited executive leaves the role within a specific period (e.g., two years).
Typically 33.33% of the hired executive’s annual pay. Fees are usually paid in three equal segments over an agreed period: at the start of the search, one month later, and another month later or with successful hiring.
An upfront fee is required in delimited/engaged searches, but this fee will be refunded if the firm is unable to secure a hire.
Once a delimited/engaged search has made a successful placement, the upfront fee will be discounted from one final fee of 20 – 25% to 35% of the hire’s first-year payment.
Contingent searches are paid for when they result in a successful hire (i.e. the candidate accepts the role).
Fees for contingent searches can vary from one firm to another. They may command between 18% and 22% of the agreed first-year base salary, or it might include bonuses too.
Businesses of all types, sizes, and sectors make use of expert executive recruitment.
That said, companies that are scaling — or intend to in the future — arguably have the most to gain.
In these teams, in-house HR departments may be too busy with their own duties to create a comprehensive leadership hiring plan. What’s more, organizations with hundreds of employees have complex HR processes — and HR managers may simply lack the time required to recruit the best of the best.
Founders and start-up investors also utilize executive search to build the right teams. Bringing an experienced candidate on board in the early stages of a new venture can take it to the next level fast.
The same can be said in organizations looking to replace a departing CTO, CFO, or other C-Suite exec. Time is a critical factor when a vital cog in the machine will be missing and dedicated firms will help find a fantastic replacement even with tight timeframes.
Key Search works with a varied client base consisting of companies in the following sectors:
Leaders need specific skills in each industry, as well as the essential soft skills that make a good leader (e.g., communication). For example, those in eCommerce require an expert grasp of online shopping trends, consumer habits, marketing strategies, and buyer preferences. Organizations in marketing, legal, financial, retail, and life science sectors may also use executive search firms.
Many skilled leaders with invaluable hands-on experience are currently employed and may not be looking to take on a new challenge. This can be especially true if they joined their current organization recently and are still establishing themselves within its infrastructure. The prospect of leaving for another position might not even occur to them.
That creates a challenge for executive search firms tasked with locating the client’s “perfect” leader.
So what’s the key to success? It’s all about taking advantage of existing connections, forging new ones, and finding a way to reach potential candidates. Sounds obvious enough? Perhaps.
But this can be a time-consuming process.
It demands a concrete understanding of the client’s specifications and the traits of the executive likely to excel in each role.
It’s by no means easy. But it’s a challenge that Key Search is always happy to take on.
We’ll go that extra mile in securing top talent, too. Our specialists help you shape attractive offers and opportunities, designed to appeal to a leader’s career goals and open their eyes to the benefits of joining your firm.
So you’ve chosen to commission a leadership recruitment specialist. Great move. But how do you choose which is the right provider for you?
First, you need to filter down your options by focusing on the following factors:
Pricing is perhaps the most important — especially for growing start-ups. And you need clarity on fees from the start of your relationship. Ask:
If the search firm has little to no experience of working with companies in your niche, they may struggle to understand your needs. They may also lack the connections required to find a way in with hard-to-reach candidates.
Don’t rush into a deal with the first executive search firm you find. Instead, research their background and reputation before you even approach them. Pay attention to reviews from previous or existing clients to learn more about their services and results.
Checking a firm’s client list will also offer an insight into the types of companies they work with. A team that performs executive search for clients spanning various sectors will have a strong blend of skills and contacts that you can benefit from.
Do you have a clear vision of the leader you’re looking to hire? The more information you can provide a consultant, the more precisely they can tailor their search.
A detailed briefing and/or written document will help both parties better understand the parameters for success.
Key Search has worked with some of the fastest-growing start-ups in the world and helped companies succeed in a number of sectors including eCommerce, Consumer, Digital Health, Fintech, and Hospitality Tech.
Led by Founder Franziska Palumbo-Seidel and Directors Mara Vouleli, Delano Brand and Weronika Oesterreicher, we maintain a network comprising thousands of skilled, experienced executive professionals. Our global reach and expertise in varied sectors uniquely positions us to find the talent organizations need.
This timeline varies depending on the criteria involved, the number of viable candidates, and other key factors. From starting the search to successful completion Key Search aims to complete the hire within 12 weeks. Bear in mind, though, that it can take several weeks to build an impressive shortlist for a leadership position. You don’t want to rush such high-profile decisions! Key Search achieves more than 40 high-profile leadership placements per year.
Key Search achieves more than 40 leadership placements per year.
Executive Search, despite its boom, remains a fragmented market. With many thousands of providers, it is hard to choose the right one. Large multinationals usually work with the five giants: Spencer Stuart, Heidrick & Struggles, Russell Reynolds Associates, Egon Zehnder, and Korn Ferry. This quintet, known as the “Shrek” firm are specialized in hiring for large corporate conglomerates.
Boutique firms like Key Search with deep expertise in specific industries are thriving within their sectors with a dedicated focus. There are also a huge amount of individual consultants sometimes known as cowboy’s since, as one puts it, “anyone can buy a computer, get a LinkedIn license and call themselves a search expert”.
Yes. Applicants must come with a specific track record, continuous career growth, and specific key hiring criteria as per the agreement with the client to ensure they’re suitable for the position in question.
Furthermore, Key Search validates each selected candidate with a psychometric assessment that gives additional insight into the candidate’s behavioral and also cognitive skillset. It is an additional step the candidate takes in parallel to the interviews and helps to evaluate the job fit in much more depth, especially in times of remote hiring.
Key Search conducts in-depth market mapping to identify candidates with the right track record, skills, and qualifications for a leadership position from a specific sector. Thanks to their domain expertise and deep network, the consultant reaches out to those who normally would not actively seek a position but are high potential leaders. Through a deep understanding of their client’s needs, Key Search is able to attract candidates the client would normally not be able to hire with their own efforts.
If you are still not sure which hiring solution is the best fit for your company, please contact one of our Directors. We will be happy to assist you.