With over 1,000 top executive search firms profiled in the GatedTalent directory of executive recruiters, people often ask us what the best executive recruiters have in common.
The answer? Well, it depends on why you are asking. We spoke to executives, to recruiters, and we did some research of our own. This is what we found:
Different stakeholders have different perspectives on what makes a top executive search firm
A retained executive search firm is hired by the organization with the hiring need – not by the executive job seeker. These firms position themselves as leadership consultants, rather than career consultants.
This point is crucial as it adds context to the question. It is almost always the case that only one executive recruiter (and her team) will be responsible for a specific executive opportunity. For example, the recent search assignment for a new CEO at Newell Brands was executed by Heidrick and Struggles. Gannet Co. retained Egon Zehnder International; AIB retained Korn Ferry. From the perspective of the executive, therefore, if they had wanted to be considered for the CEO job at Newell, they would have little choice but to work with the Heidrick recruiter. However, a relationship with that recruiter would not get an executive ‘on the radar’ for the AIB role.
Potential candidates don’t get to choose. That’s not to say, however, that they don’t matter. The best headhunting firms care about the candidate experience.
In executive search, a candidate today is a client tomorrow
Candidate focus is not just about “being nice” – the top talent under consideration for a senior leadership position is likely to be in a position to need executive search services down the track. Recruiters realize that it is not good business practice to upset a potential future client. As a result, while the priority of the headhunter needs to be meeting the needs of the client, empathy for the candidate is also important.
Peter Franks of Neon River is one executive recruiter who emphasizes this point – his first response to the question of “what makes a top recruiter?”:
“I’d say one that takes care of candidates and clients alike.”
Every placement is different
HR managers realize that an executive recruiting firm that is strong in the professional services sector in New York may not be the best search firm to use to hire a country manager in Japan.
This diversity is a point made by David Pierce Hallahan of Consulting Future:
“…each and every search process is unique and no two clients are alike. Always doing the right thing from the client perspective whilst being able to authentically understand, appreciate and respect the World of the senior candidate.”
Generally speaking, though, the client has one fundamental objective:
They retain a search firm as a result of a need to hire the very best candidate as quickly as possible.
To achieve this, they’ll consider a variety of factors:
- How well does the search firm know the market that the client serves?
- What pedigree do they have?
- What have they done in the past?
- What are the likely fees?
Top executive search firms know a lot of people
The largest search firms have massive databases – Korn Ferry, for example, claims to have more than 7 million candidate profiles within its CRM. However, this does not necessarily constitute depth of knowledge – at GatedTalent, our sister company – Dillistone Systems – provides CRM technology to many of the best executive search firms. Our internal analytics tells us that many executive profiles maintained by recruiters actually contain limited depth of candidate data. In reality, tools like Linkedin have changed the game in terms of search firm reach – It is no longer a competitive advantage to be able to find senior leaders at Megacorp – that information is readily available.
It’s not about the size of the database
In some cases, identifying candidates is simple. However, in many cases, the most successful executive placements come as a result of the search firm looking “beyond the obvious”. This point is one made by clients, search firms and executives alike.
Creativity is a perspective put forward by senior financial services executive Laura Tabus. She emphasizes the importance of a firm’s ability in terms of:
“Understanding the executive search position: job, requirements, skills, qualifications are of the same importance as understanding the organization’s culture and environment for a good fit.”
A good understanding of the needs of the client should lead to a more creative approach to the search. C-level executive Martin Kaufmann makes this point. He believes that a top executive search firm is one that:
“…does not follow a rather simplistic approach that would avoid bringing in new thinking but only more of the same. (instead) being a bit visionary in assessing and recommending candidates, not just looking for the same industry, same function, same geography.”
Here’s Steven Davis, Head of Talent Acquisition at Financial Services giant Broadridge, who emphasizes the importance of original research, in saying that the best executive search firm is:
“One that starts with a research first/candidate development model vs. running out the “usual suspects”
This matters. Contingency search often involves a keyword search of a database. Retained search is a form of consulting – it is based on understanding the challenge and finding a solution. A recruiter without this consulting mindset is unlikely to deliver the right candidate.
Knowing of a potential candidate and being able to engage her are different challenges!
Awareness of candidates helps the search firm identify the long-list of potential candidates, but the next stage is sometimes more challenging – reaching the shortlisted candidates.
Branding can be a factor here – a well known global brand might open doors that less well known recruiting firms might struggle to pass – but this is often not the case. In specific markets, specialist boutique search firms are often better known than the global businesses, which tend to be more generalist in nature.
It is also often the case that success depends as much on the specific executive search consultants representing the firm as the firm itself. The late Gerry Roche is widely regarded as the most successful search consultant in history – and, the reality is, his clients would most likely have selected him even without his association with Heidrick and Struggles.
David Hunt, CEO of Hyperion Executive Search GmbH recruits in clean-tech and make this point in another way. He believes that the consultant is critical, requiring:
“A genuine passion for the markets and sectors they serve. This creates a desire to make sure all parties win, client, candidate, search firm, market sector.”
A number of executives that we heard from made similar points. Take Hayato Nakamura, for example:
“In my days of being employed, having lived a rather niche existence within the risk management industry, we always used to complain about the search teams who would contact us, but have no idea about our positioning within the vertical we were in – all that could have been avoided with 1 hour on Google”
In retained executive search, size can be a disadvantage
In some ways, larger firms are at a disadvantage to smaller firms. The vast majority of top executive search firms offer an “off limits” policy to clients. This essentially means that – in return for ongoing business – the search firm will not hire out of a client. For very large firms, or boutiques who focus on very specific markets, this can be a significant constraint – it’s of no value knowing all of the top talent in the market if the recruiters are unable to approach them.
How about search firm metrics?
Executive search is, to no small extent, an intangible purchase. A hiring manager can select a top executive search firm – the best executive search firm – and a search can still go badly – take the recent search for a new CEO for the UK’s Premier League, for example. To date, two of the top executive recruiting firms in the World have failed to deliver a successful candidate for what is a very high profile, glamorous position.
As a result, sophisticated buyers tend to look at metrics associated with executive search firm performance on previous mandates, hoping that historical results will be repeated.
These might include factors such as:
- Time to shortlist
- Time to executive placement
- Completion success rates
- Percentage of diverse candidates on shortlist
The problem here is that there is little in the way of independent auditing of executive search firm metrics. Most commentators would tell you that CEO and executive placements for large, complex organizations will take 90 days. However, the most recent data on the topic suggests that the average CEO placement now takes 134 days to complete. The reality is that there is little independent data to validate the claims of individual executive search firms.
As a result, some larger consumers of retained executive search services pool metrics to get a better understanding of executive search performance – the Executive Search Information Exchange is an example of an organization providing this type of service.
Executive search rankings and professional associations
Some of the best executive search firms in the World are members of the Association of Executive Search Firms (the AESC). This can provide a degree of comfort to a hiring manager that the firm has a some credibility. However, “some” does not equate to “all.”
Few would argue, for example, that Egon Zehnder International is not one of the best executive recruiting firms – but it is not an AESC member firm.
There are also a host of search firm rankings, listing the so-called “top executive search firms.” In most cases, these lists are somewhat arbitrary – in some cases, they are commercially driven. In reality, aiming to scientifically evaluate the relative merits of a global headhunting firm versus a highly specialized industry boutique is, shall we say, challenging!
What about search firm fees?
The best retained executive search firms are very rarely the cheapest. Top leadership search firms will bill the equivalent of 33% of total annual compensation for the successful executive; some firms might be slightly less expensive than others. However, put this in the context of the cost of a bad executive hire, and you’ll understand why most hiring managers are unlikely to see fees as the critical decision criteria. As Peter Franks explains, sometimes you get what you pay for:
“A firm that charges fair prices, doesn’t delegate work to junior team members or oversell to potential customers. “
Bringing it all together
A good retained executive search consultant is going to speak to many people as she scours the market for the right candidate. This feedback – covering everything from employer brand to feedback from partners and competitors – is potentially of significant value to the client. Laura Tabus emphasizes the importance of sharing feedback and experience before, during, and on completion of the search.
It’s a valuable point – your retained search consultant is, in many ways, your ears in the market!
Top executive search firms – our conclusions
What makes a top executive search firm? A consultative approach. A focus on the needs of the client. Empathy for the needs of the candidate. Market reach and pedigree have all been mentioned.
At the end of the day, however, every search is different – and so there will be no one answer. Beware of rankings and tables that say otherwise!
How to be found by top executive search firms
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Potential candidates don't get to choose. That's not to say, however, that they don't mantter