Increase in e-Mobility and Its Impact on the Job Market
28/07/2023
Employee Leasing: Definition, Pros & Cons
01/08/2023
A leader is the spoke of the wheel that sets a company’s vision in motion. A great leader is a great communicator, with high emotional intelligence and creativity, and decision-making, problem-solving and delegation skills. And companies wouldn’t want to compromise on any of these skills when they are recruiting their leaders, the first missing piece in the jigsaw puzzle of growth for any company. So, they rely on a specialized form of search to get them onboard, termed executive search.
What is the Definition of Executive Search?
Executive search is a term which applies to the recruitment of highly skilled senior management for a company. This generally includes the roles in the C-Suite such as CEO, CTO, CFO, CMO, CHRO etc. There are HR consulting companies that offer executive search options to companies looking for it.
Why Executive Search is Important?
Having a separate initiative for the recruitment of senior executives streamlines the whole process of recruitment in a company. The team that conducts the executive search would be well-versed in the hiring of roles at the executive level and would preferably have years of recruitment experience and industry familiarity too.
Why Executive Search Firms?
Many organizations today approach executive search firms to get their work done. With founders and board members having data-driven clarity and executive talent in certain sectors becoming very hard to hire, executive firms are in great demand.
The most important benefit of using an executive search firm is that it provides a very objective approach to selecting a leader. It is purely based on merit as the most eligible leaders are drawn from the executive search firm’s network.
And that brings us to the second most important benefit of using an executive search firm to hire your leaders. An executive search firm has access to not only senior executives who are actively looking for a job but also those passives who might be open to a new role.
An executive search firm also takes much less time as compared to an HR team in an organization as their experience in recruitment and particularly executive search helps them find a most suitable match very soon.
An executive search firm is also more cost-effective and efficient as the executive search process happens in pre-discussed and agreed upon phases, with the payment for each phase happening then or as a sum in the beginning.
Lastly, you may not have the expertise and the technology to do it. Technology is a great enabler, and executive search firms have the expertise, the automation, and the technology to conduct a more thorough and rewarding search, one that makes no compromises and is error-free.
How Does Executive Search Work?
Executive search firms generally work on a retainer model to find the right executives for an organization. An executive search firm can charge anywhere between 25-30% of the leader’s compensation for the first year. Sometimes this fee is charged entirely upfront before the executive search process begins.
Sometimes the dues are payable at each stage of the process, first being the research, second being screening and third, the final selection. This makes the whole process more efficient and possibly even cost-effective when you consider the benefits of hiring a good leader.
What is the Process of Executive Recruitment?
1. Strategy
The executive search firm and the organization agree on three key things in the strategizing phase. The four points in focus in the strategy phase are: (a) establishing search priorities and expectations (b) defining the roles and responsibilities of the leader and (c) finding a benchmark to compare against and (d) identifying where to look.
2. Research
This is the first step after strategy, where it starts taking shape. The executive search firm now takes on the task of looking in the right geographies, industries, and roles to identify the best fit. Sometimes an executive search firm already has access to a huge database of candidates, which makes finding the right person for the role much easier and reduces the time in research.
3. Outreach
This is where the benefits of research bear fruit. The outreach team uses the research data where conclusions were drawn and candidates were assigned internal scores to pick the candidates, establish contact with them and explain to them the roles and responsibilities.
Because top talent is hard to engage with, always put your best agents on the job. Approach on all the popular channels to guarantee you find the right person.
4. Assessment
In this phase, the candidates are assessed though tests of skills, interviews, and questionnaires. At the end of the assessment phase, you must have a detailed description of the competencies, behavioural traits, leadership skills, intrinsic motivators, and the value set for each of the shortlisted candidates.
5. Decision
The last phase of executive search involves everyone coming together as a group to decide who will do the job best should he/she be chosen. The next step is to extend an offer.
The negotiations on compensations and what benefits would be offered and other terms of the contract are defined at this stage. Once the offer is signed by the candidate, the organization invites the candidate for the onboarding and final formalities before assuming the role. With this, the executive search process ends.
How do Executive Search Firms Differ from Traditional Employment Agencies?
There are several points of difference between executive search firms and traditional employment agencies, which set them apart.
1. Lack of objectivity
Traditional employment agencies handle the employment of several roles at a time. They do not have a team that distinguishes between the roles and those who are assigned for instance contingent recruitment or staffing for temporary roles may be assigned to executive search as well.
2. Lack of confidentiality
Executive search, because it involves hiring leaders, will have some information that is shared by the organization on a need-to-know basis. When using traditional employment agencies, the risk of data privacy is always there.
This is where an executive search firm or an HR consulting firm like Alp Consulting, specializing in every recruitment and staffing practice, following compliance and maintaining data privacy, becomes a game-changer.
3. Lack of proper research and outreach methods
A traditional employment agency that hires across various roles will not have a clear method of research for each kind of role or have a clearly classified and segregated talent pool to establish an outreach on. Top HR consulting firms follow research processes that have stood the test of time, allowing them to recruit some of the top talent in the world.
4. Lack of global reach
When you are hiring your top management, you want the best in the world. Employment agencies generally look inward, where executive search firms look both ways. What executive search firms promise is top talent, and it could be from anywhere in the world.
And if you notice the top companies in the world all have diversity in their leadership, and studies prove that such diversity helps.
Difference Between Retained Search and Contingent Search
In a retainer-based search or retained search, the recruiting firm is paid a fee upfront for the executive search that follows. They could be paid at each phase of the work as well. In contingent search, the search happens based on a “if the goal is reached, you will be paid” model.
In other words, it is a “no success, then no fee” kind of search where the recruiting firm is not paid if the right candidate is not hired. Most executive searches are on a retainer basis.
Closing Words
Hiring for leadership roles requires a combination of skills. Executive search consultants need to evaluate and synthesize information across several parameters. For this, they need problem-solving and analytical skills, have a higher emotional intelligence, and they also need to mentor and support their teammates.
Are you looking for an executive search team that meets all these requirements? Talk to Alp Consulting today!
FAQs
1. How to select an executive search firm?
Selecting an executive search firm involves answering some crucial questions. Three of the main questions are what the experience of the firm in the industry is, what is the reputation that the firm has in executive search, and what people generally have to say about the executive search function of the firm. One additional question that you may also need to ask is, will they prepare for succession?
2. What is executive search recruitment?
Executive search recruitment involves hiring the top executives for a company, who will serve in leadership positions. They could be leading the technical, financial, marketing or sales domains of the company.
3. How long does an executive search take?
An executive search can take as long as 15 weeks or as less as 7 weeks to complete. It depends a lot on the industry, the level of expertise required, the organization that needs the candidate and some other factors such as remuneration too.
4. How executive search firms work?
Executive search firms follow a retainer search model. This is because hiring is for a senior position, which will incur a significant amount of time and money. They could follow a contingent model as well, but this is very rare.
5. How do executive search firms get paid?
Sometimes the sum of money is paid upfront by the organization, and sometimes in phases. This will depend on the terms in the contract that is signed between the recruitment firm and the organization.
