Everything You Need to Know About How Executive Search Firms Work
Most professionals are familiar with the role of a recruiter, however many do not understand the inner workings of executive search firms. If you are contacted by an executive recruiter, or are thinking about reaching out to one or more search firms to help you hire, it will be beneficial to understand how they operate. Here’s what you need to know.
Why Companies Work With Executive Search Firms
Executive search firms act as consultants to their clients, meaning that they are separate entities from the company that is hiring. Companies with an open position will contract a search firm to provide candidates if they are lacking time or resources to conduct the search, which can be time consuming and labor intensive. Traditional methods of posting a job online can often produce hundreds of responses from unqualified candidates that the hiring manager must sort through. When working with an executive search firm, the hiring manager will only receive pre-screened candidates that meet the requirements of the position.
Often companies have already tried to hire on their own and were unable to find the right person. Executive search firms have unique methods to find and attract a wide range of professionals. In addition, recruiters have access to “passive candidates,” or individuals who are not looking for a new position. These candidates often represent the most qualified talent in their industry.
The Executive Search Process
An executive recruiter’s knowledge of the job market and industry will lend a different perspective to the talent pool and highlight a candidate’s skills accordingly. After providing qualified talent, a search firm may also facilitate the interview process and negotiate salary expectations for both parties. Once the process is complete, and a candidate is hired, the search firm then receives a fee in exchange for the service they have provided. Candidates, whether they are placed or not, do not owe a fee for being involved in the process.
Retained vs. Contingency Searches
An executive search firm can lead a search in two different ways, either on a retained or contingency basis. A retained search requires the client to pay a small portion of the fee up front to begin the search, and once a candidate is placed, the initial deposit is applied to the total fee due. This method results in a more consultative process, where recruiters provide assistance with every step of the process from creating a job description to crafting an offer letter.
A contingency search is typically less formal and narrower in scope, as a recruiter may only be involved in candidate presentation and not in other aspects of the hiring process. Due to the difference in fee structure, retained clients receive priority for their financial commitment.
Executive Level Placements
Executive search means we place candidates at the executive level, such as Director, VP, and C-level positions. Compensation packages at this level not only include significant base salaries, but also quarterly or annual bonus potential, deferred compensation, relocation assistance, and attractive benefits packages.
An executive search is a multifaceted, delicate process, and the outcome will have long-term effects on the hiring company. Executive recruiters have filled many leadership roles throughout their career, and their experience can prove beneficial to conducting a smooth and successful search.
You may wonder how executive search firms find appropriate candidates. Several methods include communicating on social media sites, sending email and direct mail requests, advanced online search techniques, and posting on various niche job boards. Additionally, search firms have extensive databases of previously screened, qualified candidates, as well as many contacts they have met in person through professional networking and events.
Not an Employment Agency
Executive search firms are different from employment agencies, which place entry- and mid-level candidates in temporary roles. Executive search firms specialize in permanent, direct placements at the executive level.
Lastly, we receive many inquiries from people asking us to help them find a job. Whether we can help these individuals or not depends on the needs of our clients. As we mentioned in our Working with a Recruiter article, search firms work for and are paid by the employer, not the candidate.
Even if you have worked with an executive search firm before, we hope you now have a better understanding of how we operate. Armed with this additional knowledge, you should be able to make a more informed decision as to whether or not an executive search firm will meet your needs as a candidate or hiring authority.
Bristol Associates, Inc. is an executive search firm with over 50 years of excellence in recruiting nationwide. Bristol specializes in recruiting for the Casino Gaming; Hotels and Resorts; Travel, Tourism, and Attractions; Facilities and Concessions; Food and Beverage Manufacturing; Restaurant; Hospital and Healthcare; and Nonprofit industries.
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