Big teams and diversified offerings boost the bottom line for the large recruitment providers. But there are growing dilemmas. That’s why more companies are turning to boutiques.
The biggest selling points for large search firms – the depth of their recruitment manpower and the diversity of their services – are the very elements that are causing many clients to turn to boutique recruiters. Craig Lapham, chief executive officer of the Lapham Group, a New York based executive recruitment firm that specializes in insurance and diversified financial services, even goes as far as saying that many companies are seeking an alternative to the “challenges and dysfunction” that plague the bigger talent providers. “A boutique firm simply through its smaller structure comes to any search engagement with a tremendous competitive advantage in terms of greater access to talent in the marketplace,” said Mr. Lapham.
“A big search firm may use its large team of search professionals as an effective marketing tool, but when it comes time to actually conduct a specific client search engagement, the larger firm becomes encumbered with conflicts both internal and external.” As the bigger search firms diversify their offerings, meanwhile, they raise the possibilities of potential ethical concerns. “Again, these multiple services help in marketing pitches and their recurring revenue streams smooth out P&Ls, particularly for publicly traded firms,” said Mr. Lapham. “But they also exacerbate conflicts and present dilemmas for any type of retained search being conducted. Is a major search firm going to poach talent from its non-search clients for which it’s providing ongoing HR related services?” That seems to be a pressing question on the minds of more and more clients.
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Will Schatz, Managing Editor, Hunt Scanlon Media