Filling executive and senior positions can be daunting. Your company may lack the time, resources, or expertise to find the best candidates. As such, you may be considering an executive search firm.
Find yourself wondering, “what is an executive search firm?” Look no further. This comprehensive guide will answer this question and many more, giving you all the information you need.
What is an Executive Search Firm? The Definition
Executive search firms specialize in finding top-tier talent for executive and senior roles. They’ve spent years honing their craft and accessing a wide array of highly-qualified talent.
Companies that lack the time, resources, or evaluative expertise to place a high-level candidate will outsource to an executive search firm. These firms work quickly to fill open roles and present only the best candidates for consideration.
When to Use an Executive Search Firm
What is an executive search firm’s role when working with your company? They fill executive and similar positions quickly and with the best talent. So when do you use one of these firms?
If you lack any of the following, consider an executive search firm:
- Resources (particularly access to qualified candidates)
Executive search firms will fill open positions quickly because that’s their job! They also have access to a much wider talent pool and can find candidates that the general public may not be able to access.
Companies often outsource executive-level hiring because of the burdensome costs of choosing a lousy candidate (up to 30% of their first-year salary). Senior positions are ones you want to fill correctly from the start.
How do Executive Search Firms Source Candidates?
The executive search process is involved, and it relies heavily on sourcing the best candidates. There are multiple approaches a firm can take, and top executive search firms conduct research into all:
- Looking into social media and databases
- Tapping into peer networks (this is used for vetting candidates, too)
- Finding people who’ve had success in companies like yours (based on location, industry, etc.)
Related: The 12 Best CEO Interview Questions You Need to Ask
Executive Search Firm Goals
If you choose to outsource to an executive search firm, you want to know their goals and how they’ll operate. So, what is an executive search firm’s goal? Let’s take a deeper look.
Goal 1: Offer Unique Solutions
Hiring is never a one-size-fits-all situation, especially for executive roles. These firms work closely with you to understand a role’s responsibilities and find a candidate that checks all boxes.
Search firms will help you place candidates who meet the role’s criteria and fit the company’s goals.
Goal 2: Work Actively with Clients
You as the client can take as involved of a role in the process as you want. Executive search firms are happy to work closely with clients to ensure all needs are met. You can follow all steps in the executive search process to ensure you end up with the best candidate possible.
Goal 3: Apply Industry Experience
Top executive search firms use their in-depth industry experience to evaluate candidates beyond the resumé. These firms have a comprehensive understanding of what type of person will best fit your company based on decades of experience.
Retained vs. Contingent Fee Structures
Now that you can confidently answer the question, “what is an executive search firm?” it’s time to discuss the two types of fee structures.
Executive search firms operate on either a retained or contingency basis.
Retained searches require that clients pay a higher fee (30-35%), some of which is charged upfront. The rest is charged in the middle and at the end. Typically, there’s a 12-month replacement guarantee and more in-depth vetting of candidates and collaboration between you and the firm.
Contingent searches are often used when the annual compensation of a role is less than $150k per year. The fee is lower (20-25%) and is only paid when a candidate is placed.
You’ll likely want to operate on a retained model if you’re filling a senior or executive role.
Evaluating Executive Search Firms
Here are a few things to look for when picking an executive search firm.
Consideration 1: Reputation
Check out any potential firm’s testimonials. You can talk with people who’ve hired them in the past to make sure the experience meets expectations.
Consideration 2: Approach
When evaluating search firms, take a look at their approach. How do they assess candidates, understand your needs, arrange interviews, and work with you as the client? The firm should be able to provide deep insight here and answer any questions.
Consideration 3: Experience
You want to hire someone with vast experience filling similar roles in the same industry. Look at the firm’s management team and see if any of them have experience serving in similar roles or industries themselves, and ask the firm about its past experience.
Consideration 4: Post-Search Contact
After the search is over, what is an executive search firm to do? The best ones stay in contact with you and ensure the candidate is an excellent fit. Look for replacement guarantees in the event that a candidate doesn’t work out.
Look No Further Than Jennings Executive
What is an executive search firm? Should you use one? How do you choose the best firm? We hope this guide helped answer these questions and ones like it.
If you’ve decided an executive search firm is right for you, Jennings Executive would love to talk about your open role(s). We have over two decades of combined experience placing top-level talent and helping companies build successful teams.
Learn more about what we do here.
Related: The 8 Secrets Behind Successfully Hiring a CEO For Your Company