The work of executive search firms can at times be confused with the services of contingent recruiting agencies. However, there are key, significant differences.
Have you ever been tasked with discovering the perfect candidate for an executive-level position? If so, you're aware the process of finding a candidate to fill senior-level roles is much more rigorous, time-consuming, and research-heavy than hiring an entry-level or middle management position. The process has become even more difficult post-Covid.
When recruiting intermediate personnel, you’ll typically post on a job board or two, run the resumes through an algorithm, and review the remaining applicants for the best possible candidates. The process can range from days to weeks. However, when it comes to an organization’s most senior-level roles – from executive leadership or the C-Suite – different strategies are necessary to find the right candidate who can lead an organization.
An executive search firm is a company that specializes in placing highly qualified candidates in executive-level positions across the public, private, and non-profit sectors. Executive search consultants seek to understand a specific executive position, define the core competencies necessary for a successful hire, and target several candidates that fit a distinct profile. Such positions include President, Vice President, CEO, CFO, COO, department heads, and more.
The work of executive search firms can at times be confused with the services of contingent recruiting agencies. However, there are key differences in scope, methodology, process, and more, which differentiate these into two entirely different professions. In short, retained executive search firms partner with organizations to provide expertise in their industry or service, ultimately leading to the hire of a successful candidate.
RETAINED EXECUTIVE SEARCH VS CONTINGENT RECRUITING
Unfortunately, executive search consulting and contingent recruiting are often thought of interchangeably, but are completely different professions.
RETAINED EXECUTIVE SEARCH
DEFINITION
Executive search firms are specialized management consultants retained by clients in an advisory capacity. Executive search firms partner with a client to identify, assess and select the very best possible candidate.
BUSINESS MODEL
Executive search firms operate on an exclusive, client-centered basis and work on a limited number of assignments at one time. They are engaged in all aspects of the process, from defining the search through candidate integration. They often find candidates with diverse backgrounds and have access to candidates who are not actively seeking a new position.
They charge a consulting fee (retainer) for the assignment, consistent with their in-depth advisory work. Executive search firms deliver high-quality services beyond placement, a slate of highly qualified candidates, and develop long-term relationships built on trust.
Executive search firms begin an assignment by understanding their client’s industry, business strategy, and unique needs. They employ highly sophisticated methodologies including competency-based interviewing, 360 degree referencing and due diligence processes that may be augmented by psychometric testing and broader assessments.
They identify a slate of the most qualified candidates that fit well with the client’s culture and have the right background and experience for the specific opportunity. A firm’s success is defined by the long-term commitment and impact of the person hired, therefore they are motivated to help secure a lasting, successful executive hire for their client.
TARGET ASSIGNMENT
Executive search firms are typically used for senior-level executive positions, department leadership and board directors. Assignments are generally for positions where the best candidate is harder to find and harder to persuade to make a move, and where the potential impact of success or failure is greatest.
CANDIDATE PERSPECTIVE
Executive search firms often access senior executives who may not be actively seeking a new position, and treat their potential interest with a high degree of confidentiality. They can help these hidden candidates see the potential advantages of making a move for the right opportunity.
CONTINGENT RECRUITING
DEFINITION
Contingent recruiters are hired to present a pool of candidates that fit certain criteria. Contingent recruiters generally works the front-end of the process, leaving the assessment and selection work to the client.
BUSINESS MODEL
Contingent recruiters seek to place as many candidates as possible in the shortest possible time, delivering broad access to “ready to move candidates”. They tend to work with many assignments concurrently. If a particular assignment is not getting traction, contingency recruiters have little incentive to continue.Contingent recruiters offer their service with no money up front and are paid for candidates who are hired from resumes they present. Fees are generally lower, reflecting their limited scope of work.
METHODOLOGY
Contingent recruiters leverage networks, advertising and online databases to identify a large number of resumes of candidates who likely fit the client’s criteria. Resumes are shared with the client who then takes a more hands-on approach to reviewing and evaluating the candidates. By virtue of the payment upon placement nature of this business model, contingent recruiters are motivated to get many resumes in front of many clients, as quickly as possible.
TARGET ASSIGNMENT
Contingent recruiters are most often used for mid-level positions or positions where there are a large number of qualified candidates. They focus on candidates actively looking for a new role, and positions that are of lower potential impact within the client organization.
CANDIDATE PERSPECTIVE
Contingent recruiters access candidates more likely to be in mid-management roles, most of whom are actively looking for a new position. They have a strong sales orientation and focus on working with a lot of clients and candidates, which can be an advantage to mid-level candidates looking to make a move.
If you'd like to learn more, or talk about the power of retained recruiting, please give Bob a call. He'll be happy to answer any questions you might have.
I have very lightly edited this article from AESC, the leading Global Executive Search Organization, Dedicated to Strengthening Leadership Worldwide. Thank you AESC!