The benefits of using an executive search firm
The human resources department of every wireless industry company performs a variety of valuable services for their firm, including the employment function of which recruiting is only a part. They have a number of means available to identify potential candidates such as employee referrals, their company and resume website, and advertising. Despite these resources, HR must prioritize their time for each personnel search due to ever-increasing workloads and they are ethically limited in directly approaching potential candidates working for competitors. An executive search firm is focused on only one thing – recruiting.
Most wireless company executives appreciate that identifying candidates is significantly influenced by the state of the economy, supply and demand candidate availability, state of their industry and market timing. They also understand the “opportunity cost” (e.g. lost business, achieving market penetration, customer support, management efficiency and focus, overtime) of key positions remaining vacant for an extended period. Additionally, there are times when it is necessary to maintain confidentiality of recruitment when there is a need for a confidential replacement or to prevent competitors from learning of your development plans.
An executive search firm can be a valuable supplemental resource when individual company efforts have not yielded the quality of candidates within a desired time frame. A search firm is also able to directly approach any candidate (excluding employees of their clients) without the ethical limitations suffered by the human resources department. Whether the rationale is opportunity cost, time factors, confidentiality or any combination thereof, there is an economically prudent time to use a search firm.
For candidates, an executive search firm can be a valuable resource in supplementing their individual job search efforts, as well as understanding current market conditions within their career discipline and industry.
Selecting the Recruitment Firm:
There are companies and individuals that call themselves recruiters whose only service is to send resumes from files they have accumulated. In most cases little or no screening is performed and there are no candidate guarantees. These services are cheaper, but you may end up wasting time on unqualified candidates, those making too much, those with unacceptable employment records, or individuals no longer in the employment market.
Retained search firms can be expensive. The recruitment agency’s compensation is usually 35% of the candidate’s total first year compensation which would include their base salary a sign-on bonus and an estimated incentive bonus or commissions. Sometimes the value of stock options is added plus the travel expenses if there was a personal interview. While these companies do a thorough job in qualifying potential candidates and provide a candidate guarantee, they usually confine their searches to top-level executive positions and board member positions.
Contingency search firms tend to offer the best value. Fees typically range from 20% to 30% and are only payable if one of their presented candidates is hired. Quality firms do a thorough job of qualifying candidates, adhere to a standard of ethics and usually provide a candidate guarantee. Some are even willing to personally interview candidates if they are reimbursed for travel or video conferencing expenses.
When a company is selecting a search firm it’s always a good idea to utilize one that specializes in your industry, rather than one that only conducts searches for one or two career disciplines for a variety of industries. A quality “contingency” firm that thoroughly qualifies candidates in accordance with a company’s position and compensation screening criteria, checks references and verifies education, is oftentimes as capable as a “retained” firm and can be significantly less expensive.
For candidates it is important to select a search firm that:
- Does not charge any candidate paid fees
- Specializes in the appropriate industries
- Has experience within the appropriate career discipline
- Does not send unsolicited resumes to companies, nor post them on websites
- Seeks permission before sharing a candidate’s resume with one of their clients. Some firms will even share resumes with other search firms or sister companies with an agreement to split a placement fee. This poses a risk to a candidate in getting “surprise” telephone interviews for which they are unprepared.
A candidate wants to work with a search firm that enjoys a good reputation and supplements their individual search effort. Any firm unwilling to work within the above limitations may pose an unacceptable risk and loss of control over an individual’s job search efforts.