Q: Why do executive search firms tend to be small?
A: Unlike other industries where there are advantages in becoming bigger, recruiting is the opposite. It is a highly fragmented industry and is steadily becoming more so. The biggest reason behind this trend is the problem of the steady and severe shrinking of the candidate pool as firms grow. Other factors are that recruiting has few barriers to entry and it is a people-centric business. In other words, clients hire people, rather than firms. Search consultants who depart to establish their own businesses find their clients follow them. For these and other reasons, executive search will continue to be an industry where small is the norm.
Q: But there are some large search firms. Why?
A: Yes, there are a group of highly regarded global firms called the "Big 5." They focus almost exclusively on the highest profile positions of large companies predominately in the largest cities of developed countries. Despite being high quality search providers, they control a small and slowly declining percentage of the global market.
Q: Do brand names matter in executive search?
A: Clients are the ones who decide this and most clients hire the best person to conduct their search, not the best brand. Like other professions -- medicine, law, engineering -- executive search is a people centric business.
Q: Who will actually do my search?
A: This is another important question. Search consultants at boutique firms take a hands-on approach to their search engagements and most of the sourcing, interviewing and assessment work is that of the person who was contracted with. Large firms, on the other hand, operate like other management consulting organizations. Consultants act as relationship managers while execution is done by less senior associates. Interactions with many firms are through charismatic rainmakers who are experts at acquiring new business. Charming and connected, such people commonly have 15 to 20 search assignments on the go and must constantly be focusing on selling new business. This approach may still yield good results but clients generally want to know who they have hired to do their work. Clients need to ask how many assignments the search consultant has underway and who else will be involved in the search and what will they do. They also should know who to call for regular updates.
Q: Are my customers and competitors going to find out about my search?
A: It is reasonable to say that most companies do not want the status of their senior positions to be public knowledge. Vacant executive positions can be cause for concern among customers and glee for competitors. As above, client names need to be concealed to all contacts, sources and candidates until clients instruct otherwise. Confidentiality can usually only be assured if a senior search consultant oversees the search with a small number of support staff.
Q: Are my employees going to know about my search?
A: Many search engagements are to replace employees currently in place and therefore need to be handled in a very confidential manner. A more common situation is when a senior position is open and internal candidates would like to be promoted into the role. Executive managers, however, have decided they need to consider a broader range of candidates so they can be confident of promoting the best person. In either situation, confidentiality is critical to avoid causing a severe disturbance in the workplace. Search firms need to be clear about how they will be discrete. Communications should be with suitable hiring managers only and the client names should not be revealed to candidates until they are selected for person interviews.
Q: Will details of my search be used for sales purposes?
A: This is another sore point for many clients who do not want confidential information about their past open positions to be used to get search business from competitors and customers. Unless specifically granted permission, search firms should never use client names for sales purposes.
Q: Won't LinkedIn kill the recruiting business?
A: The same prediction was made about recruiters when internet job boards became widely used (like Monster.com and Careerbuilder). A decade or so later the recruiting industry has tripled in size and it is the job boards that seem to be in trouble. LinkedIn is the newest. It is a popular social media service used widely by professionals to find employers. It is difficult to predict the future but recruiting seems to be an innovative profession and able to adapt as new tools become available. It seems it will be around a while longer.
Q: Do search firms use deception to find candidates?
A: Tactics such as pretending to be conducting a study or writing an article to discover employee names, titles and responsibilities is highly unethical. Deceptive ploys are a show of desperation and inexperience, and most firms using such methods seem disappear on a regular basis.
Q: What if we already have candidates we are considering?
A: It is not uncommon for hiring managers to refer internal or external candidates. Search firms are used to expand the number of candidates to gain a more complete view of options and make the best decision.
Q: Should I only work with firms with local offices?
A: There are usually great advantages to choosing search firms with deep local knowledge of the local market.
Q: Do search firms recruit from their clients?
A: No client wants to give placement fees to a search firm and then their senior employees are later lured away by the same firm for jobs at competitors. Therefore, almost all search firms provide guarantees against recruiting candidates from clients for a specific time. The list of current and recent clients is known as the "off-limits" list -- the companies they cannot recruit from. As firms grow, the pool of candidates they can draw from becomes smaller. Large firms with numerous search consultants can easily be working with half the companies in an industry. Often the most successful companies with the best people are off-limits. The paradox is that the larger search firms become and the more candidates they need, the smaller their candidate pool.
Q: What if two recruiters want the same candidate?
A: This is another common problem in large search firms. Since their candidate pool is smaller to begin with, there can be disputes between search consultants over the few high value candidates that remain. Most search firms, however, do not allow parallel processing since the result will be that clients are put at a disadvantage. The result is further reduction in the size of the candidate pool at large search firms.
A: Unlike other industries where there are advantages in becoming bigger, recruiting is the opposite. It is a highly fragmented industry and is steadily becoming more so. The biggest reason behind this trend is the problem of the steady and severe shrinking of the candidate pool as firms grow. Other factors are that recruiting has few barriers to entry and it is a people-centric business. In other words, clients hire people, rather than firms. Search consultants who depart to establish their own businesses find their clients follow them. For these and other reasons, executive search will continue to be an industry where small is the norm.
Q: But there are some large search firms. Why?
A: Yes, there are a group of highly regarded global firms called the "Big 5." They focus almost exclusively on the highest profile positions of large companies predominately in the largest cities of developed countries. Despite being high quality search providers, they control a small and slowly declining percentage of the global market.
Q: Do brand names matter in executive search?
A: Clients are the ones who decide this and most clients hire the best person to conduct their search, not the best brand. Like other professions -- medicine, law, engineering -- executive search is a people centric business.
Q: Who will actually do my search?
A: This is another important question. Search consultants at boutique firms take a hands-on approach to their search engagements and most of the sourcing, interviewing and assessment work is that of the person who was contracted with. Large firms, on the other hand, operate like other management consulting organizations. Consultants act as relationship managers while execution is done by less senior associates. Interactions with many firms are through charismatic rainmakers who are experts at acquiring new business. Charming and connected, such people commonly have 15 to 20 search assignments on the go and must constantly be focusing on selling new business. This approach may still yield good results but clients generally want to know who they have hired to do their work. Clients need to ask how many assignments the search consultant has underway and who else will be involved in the search and what will they do. They also should know who to call for regular updates.
Q: Are my customers and competitors going to find out about my search?
A: It is reasonable to say that most companies do not want the status of their senior positions to be public knowledge. Vacant executive positions can be cause for concern among customers and glee for competitors. As above, client names need to be concealed to all contacts, sources and candidates until clients instruct otherwise. Confidentiality can usually only be assured if a senior search consultant oversees the search with a small number of support staff.
Q: Are my employees going to know about my search?
A: Many search engagements are to replace employees currently in place and therefore need to be handled in a very confidential manner. A more common situation is when a senior position is open and internal candidates would like to be promoted into the role. Executive managers, however, have decided they need to consider a broader range of candidates so they can be confident of promoting the best person. In either situation, confidentiality is critical to avoid causing a severe disturbance in the workplace. Search firms need to be clear about how they will be discrete. Communications should be with suitable hiring managers only and the client names should not be revealed to candidates until they are selected for person interviews.
Q: Will details of my search be used for sales purposes?
A: This is another sore point for many clients who do not want confidential information about their past open positions to be used to get search business from competitors and customers. Unless specifically granted permission, search firms should never use client names for sales purposes.
Q: Won't LinkedIn kill the recruiting business?
A: The same prediction was made about recruiters when internet job boards became widely used (like Monster.com and Careerbuilder). A decade or so later the recruiting industry has tripled in size and it is the job boards that seem to be in trouble. LinkedIn is the newest. It is a popular social media service used widely by professionals to find employers. It is difficult to predict the future but recruiting seems to be an innovative profession and able to adapt as new tools become available. It seems it will be around a while longer.
Q: Do search firms use deception to find candidates?
A: Tactics such as pretending to be conducting a study or writing an article to discover employee names, titles and responsibilities is highly unethical. Deceptive ploys are a show of desperation and inexperience, and most firms using such methods seem disappear on a regular basis.
Q: What if we already have candidates we are considering?
A: It is not uncommon for hiring managers to refer internal or external candidates. Search firms are used to expand the number of candidates to gain a more complete view of options and make the best decision.
Q: Should I only work with firms with local offices?
A: There are usually great advantages to choosing search firms with deep local knowledge of the local market.
Q: Do search firms recruit from their clients?
A: No client wants to give placement fees to a search firm and then their senior employees are later lured away by the same firm for jobs at competitors. Therefore, almost all search firms provide guarantees against recruiting candidates from clients for a specific time. The list of current and recent clients is known as the "off-limits" list -- the companies they cannot recruit from. As firms grow, the pool of candidates they can draw from becomes smaller. Large firms with numerous search consultants can easily be working with half the companies in an industry. Often the most successful companies with the best people are off-limits. The paradox is that the larger search firms become and the more candidates they need, the smaller their candidate pool.
Q: What if two recruiters want the same candidate?
A: This is another common problem in large search firms. Since their candidate pool is smaller to begin with, there can be disputes between search consultants over the few high value candidates that remain. Most search firms, however, do not allow parallel processing since the result will be that clients are put at a disadvantage. The result is further reduction in the size of the candidate pool at large search firms.