Executive hiring managers depend on the quality of their people to achieve goals and implement strategy. A better understanding of the skills and capabilities of executive recruiters can enable any hiring manager to make better hiring decisions by increasing the quality of their hiring decisions, and thereby enhance their own career!
Some executives are aware and take full advantage of the best possible means of identifying and selecting top quality candidates for critical staff openings. However, many do not. Frequently, this stems from myths regarding the merits of utilizing the services provided by topflight retained executive search firms. By a better understanding of these realities, hiring managers will dramatically improve their ability to secure the most qualified candidates in a timely manner.
In the first part of this series, we’ll explore the myths behind sourcing exceptional talent, the differences in the screening and assessments methods used by internal HR and talent acquisition groups, how that is done by experts in retained executive search, and the pros / cons of behavioral testing, and how they impact the ability to make better hiring decisions.
Make Better Hiring Decisions Start with Finding the Right Talent
Myth # 1: Companies Often Unearth the Same Talent that Executive Recruiters Do
With the rise in popularity among HR and internal talent acquisition in the use of online job boards, job aggregators, and networking platforms, many companies mistakenly believe that these sources contain the same talent that can be found through retained executive search firms.
This belief couldn’t be further from the truth. Good executive recruiters don’t post ads on job boards to find qualified applicants. Instead they focus on specific industries and even specialize by types of positions within those industries. The benefits of doing so are enormous. It allows them to invest tremendous time and energy forging relationships with high performing candidates within these niche markets, learning the types of positions in-demand people would see as advancing their careers.
Professionals who genuinely excel have neither the time nor desire to peruse online job ads or to respond to the dozens of email inquiries sent by internal recruiting staff. It is only when an executive search consultant personally approaches them that the best people take the step to becoming available to discuss an opportunity.
Retained executive search consultants invest countless hours establishing unique connections and building relationships with key performers. These connections allow access to talent pools built over many years…and which are available through no other sources.
This, along with the ability of these search consultants to carefully screen and evaluate the best candidates, is what allows them to bring the strongest talent to the table – those “A players” at any level who produce 8 to 10 times more than the next level of “B players”. Instead companies continue to rely on job boards, career sites, and networking platforms that will never find the outstanding quality of talent that retained executive recruiters can provide.
Myth #2: Internal Staff can Access and Vette Candidates as well as an Executive Search Firm
While this belief is prevalent within many companies, a thoughtful analysis will prove the opposite. Retained executive recruiters make a living by finding talent that companies cannot find on their own. While in-house resources may be effective for lower level and even some middle level roles, when it comes to functional leadership or key critical roles, retained search firms are not limited to C-levels. it makes sense for hiring managers to give themselves every opportunity to interview the very best candidates to make better hiring decisions.
Internal recruiters typically spend their time vetting applicants who apply or can be found through online portals. Think about it – in a less than 4% unemployment world we live in, the best candidates are simply not found that way. Retained search firms focus on finding superior candidates who are successful in their present situation and can show similar expertise, accomplishments, and skills relevant to the role you need to fill. This very different methodology results in a very different level of candidate.
A Solid Assessment Method Enables You to Make Better Hiring Decisions
Moreover, retained search firms look at many other factors, such as discovery and validation of candidates’ industry relationships – with internal customers, as well as suppliers and eternal customers. In addition, seasoned executive recruiters do not focus on “corporate culture”. Why is simple. Each team that a candidate will be hired within is unique.
Therefore using psychometrics to discover and measure this team members as stakeholders of the role allows the executive recruiter to measure values and motivations, real and situational communications skills as well as the traits within conflict resolution, problem solving, and decision making. This Team Profile allows executive recruiters to then conduct behavioral interviews and scientific testing of potential candidates to make sure they are only a role fit, but a team fit as well.
Finally, the ability to call proven performers with direct competitors to discuss career options is a significant factor in what sets external professional recruiters apart from internal recruiters or HR people. Having the ability to reach out to these peak performers offers hiring managers access to highly-sought-after candidates they would never see otherwise in order to make better hiring decisions
In part 2, we will discuss HR Orientation including onboarding process that do and do not work, as well as pros and cons of having human resources and/or hiring managers making employment offers.
The truth of the matter when engaging a retained search firm for multiple key staffing needs is they produce far better candidates, have much deeper relationships in the industry they are working in and have a search process that in the end delivers candidates who can meet or exceed the objectives of the role in which they are hired into.
Many company’s HR and Talent Acquisition groups think more short term than long term when it comes to staffing critical roles. The long term strategy is most often used – a combination of career site branding, job boards and job aggregators, LinkedIn talent solutions, and using multiple contingency search firms to help build a large database of potential candidates.
What is missing is that for critical roles that must be filled with quality new hires, the long-term strategy rarely works. Even though using RPOs and contingency search firms will result in the most resumes, it is pure folly to believe quality is the main driver produced by those outsourced means. Therefore, engaging a retained search firm is the best of all options when outside recruitment help is needed.
Let’s look at the recognized statistics in the global workforce. The majority of all workers – approximately 55%, are “C players”. They are literally just bodies taking up space.
They show up on time, can perform assigned tasks assigned such as software or QA engineer, customer service, inside sales, operations, manufacturing and production roles. But the reality is that they don’t develop intellectual property or design anything new;
They are not problem solvers, entrepreneurial or creative and contribute virtually nothing to increasing market share or improving P&L ratios. In addition, many “C players” are just not good employees. Often a lack of upwardly mobile skills, education, and more equates to lack of motivation outside of a repetitive paycheck.
Next are the “B players” who make up to 35% of the workforce, have real education and skills, contribute to developing IP, producing revenues, or some other vital contribution. However, the cream of the crop is approximately 14% of the workforce known as “A players”. From janitor to CEO every type of role has their “A players”. What is so great about hiring them? Leadership IQ and SHRM have developed studies and surveys that demonstrate that “A” players” produce 8 to 10 TIMES MORE than even “B players”.
Reasons for Engaging a Retained Search Firm
With over 30 years of experience in the executive search business, we have rarely seen contingency search firms or RPOs deliver “A players” and have no consistency in delivering “B players” for clients to consider. How do we know this?
- In a less than a 5% unemployment rate environment, most exceptional professionals are happy where they are now in terms of their role, their employer, and compensation. If they were to become passive candidates and look to make a change due to desiring new challenges or relocation, they would simply network and reach out to hiring managers in their industry directly. They rarely look at job postings and have no need to post their resume to a job board. They will not fill out an online application on any company career web site. They are bombarded with emails, InMail’s, and calls every day from corporate recruiters and contingency search firms who generally speaking fail to understand these professionals will likely only speak or reply to an actual executive hiring manager or a retained executive search consultant with a solid reputation among industry Board of Directors and CXOs.
- Contingency and RPO firms rely heavily on job postings and job aggregators. But many of those applicants are the unemployable, unemployed, or “C players”.
- In large contingency search firms the recruiters are graded on the number of send outs (resumes that need to be sent daily to meet a quota). And RPOs have a LOT of clients. Ask yourself, as a client, how much of a priority are you to a recruiter working on 12 to 25 searches at a time? What type of quality and search process would you expect?
I’m not knocking contingency recruiters. I used to be one before I changed to retained almost 20 years ago. Why did I make that move? One, I realized to really have clients as a priority and deliver a superior service, I personally could only work on 3 to 4 searches at a time. To do more than that means both the client and my reputation suffer. Two, with using a search process that was very sound I knew the methodology would unearth those “A players” so I could assess and deliver proof that the shortlisted candidates I presented could meet or exceed the expectations and objectives of the role and client required of the new hire.
As for cost and benefit analysis, the benefits of using retained search is overwhelming while the costs are not much different than contingency search fees.
- When looking to engaging a retained search firm, you are assured that the vetting and development process are superior as you usually receive only 3-4 shortlisted candidates for each role.
- Retained Search provides detailed interview and assessments including current / prior KPIs, depth of industry relationships, and similar accomplishments relevant to the new role.
- Team fit analysis and Target Candidate Profile – by conducting brief online surveys of the stakeholders for each role (team the role will work within and key internal customers), a team profile allows the recruiter to use behavioral analysis and assessment to determine how the potential candidate will fit in and affect team dynamics. One-way behavioral testing of candidates never works as it fails to have anything to measure against.
- Much longer retention of new hires from retained search firms. For instance, 94% of our placements are still working for that client after 4.5 years.
- Superior Replacement guarantee – most contingency firms incorporate a 30 to 90 days refund or replacement. Retained search firms are often 6 to 12 months. We believe in our process so much that we offer 24 to 36 months replacement guarantee depending on the assignment.
- Success based search fees – this is relatively new for retained search firms but a practice we have used for the last 5 years. With most large retained search firms, you pay 100% of the fee regardless if the outcome was successful. Other search firms like NextGen Global Executive Search are performance based. After the initial deposit, the remainder of the fees are paid based on deliverables, including the hire.
- Flat based fees – this is also a relatively new concept. This arose out of the obvious conflict of interest associated with compensation-based search fees. If the recruiter negotiated a higher compensation that was agreed to by both client and candidate, the search fee increased. While some retained search firms use the same fee for every search on a flat fee basis, at NextGen we realized we are being paid for our work. Therefore the basis of the flat fee is appropriate to each role depending on factors such as limitations on relocation, the actual candidate pool size, the number of hours expected in research, search strategy, recruiting, and delivery.
For instance we have clients in the Bay area, NYC and Boston who funny as it sounds believe few exist outside their geography that are worthy of consideration as they often think of themselves as the center of the technology universe. Additionally, for some roles the candidate pool overall is small such as AI architects and power electronics design engineers.
Engaging a Retained Search Firm for filling multiple roles
As retained search firms are like good lawyers and executive management consultants, we ask for a deposit,. This means the client is a priority as they have “skin in the game”, knowing the search firm has a track record in longer retention and producing exceptional new hires. So, the overall flat search fees mean that engaging a retained search firm is clearly the best choice.
Why are more and more forward-thinking employers ditching recruiting firms that produce, well, crap. Contingency, RPOs, and traditional retained search firms in favor of the 21st century success based recruitment?
In a 3.5% unemployment rate, most Hiring Managers know the undisciplined, inexperienced, and average “C players” are predominant on job boards. In addition, with job aggregators, job openings get overexposure to the point the company suffers in public relations and branding. same goes for RPOS and contingency search firms – the more they repost the same job posting, the worst candidates are revealed.
Ditching Recruiting Firms that Fail to Produce
You have certain objectives you want a new hire to meet. The target are passive candidates, those not reading job postings and not actively looking, What interests passive candidates? A new challenge, a different product or service portfolio, location, company size, and more. A typical job posting showcasing responsibilities and requirements is no enthusiasm roadmap. It is in reality a robotic drone of words strung together that entices only the unemployed or average active job seeker.
Even the traditional retained search model, which does produce much better candidates, is going by the wayside. More and more companies are ditching recruiting firms that are traditional retained search models.
While employers understand the deposit to initiate a search, they expect results. Most have a 90 day to 6 month replacement guarantee. But they collect all the fees within 90 days regardless of outcomes.
‘The new paradigm, which NextGen Global Executive Search has used for a decade, is a search should be success based in regards to the recruitment fees. Also known as a performance based search, after the deposit the 2nd invoice is due upon acceptance of the shortlist and in-person interviews are scheduled.
Ditching Recruiting Firms with Compensation Based Fees
In addition, success based search fees should be a flat fee and not based on compensation. The reason is simple, in that compensation based fees can cause an increase in the overall recruitment fees during offer negotiations which is an inherent conflict of interest. Finally the 3rd and final invoice occurs on the hire and is backed by a 24 to 36 months replacement guarantee.
The end result is both the employer and recruiter have skin in the game and the employer is confident that the majority of the fee is based on the recruiting firm meeting the objectives and a solid new hire. To read further on why companies are ditching recruiting firms and comparisons between contingency, RPO, traditional retained search, and success based retained search, download the PDF.
The big challenges in the recruiting is that great talent is in short supply and most talent acquisition strategies are broken. Executive hiring managers are interested in ONLY one thing – whether internal or external the ability to not only Identify, but to recruit exceptional talent. When you evaluate an executive search firm, look for two things. One do you have the capacity to perform research to identify target competitors and passive candidates, and two, do they have experience in cold calling, a deep network, and reputation of getting referrals?
Most Companies Fail to Properly Evaluate an Executive Search Firm
Most common is to go with the big name search firm. The issue there is you pay a full fee regardless of outcome, other than the principals teh recruiting force is a revolving door, and a bad track record in retention. Secondly, if you are a startup to mid-cap you really need the expertise of a team that specializes in your industry; known as niche recruiting. Most big name search firms work across all industries without specialization. while that diversity may work for a CFO or Board role, it falters with lack of a deep network within your industry.
What you should look for is a retained search firm that not only has the industry expertise but has a sound evidence-based recruitment process management system utilizing Ai predictive validity. It all begins with a discovery step where the search strategy is built upon defining the objectives of the role and learning what the role with do with the required skills, not just the having of them.
Next is using scientifically based psychometrics to determine team dynamics and thus the search form can then develop a target candidate profile and custom search strategy. A great recruiter will define prior desired accomplishments in a similar environment and make sure candidates are screened who have similar. Rather than accepting verbatim the experience and skills required, a good recruiter will drill down to ascertain in what environment and product / service those skills are used in , again further screening candidates to validate they actually can meet the objectives of the role.
The Job of Hiring Managers to Evaluate an Executive Search Firm
For almost 30 years, we often run into Hiring Managers that say just send them resumes and they will determine which candidates to interview. Which of course begs the question, why would you be paying a search fee? You can simply hire an RPO to troll job boards or have HR post job openings to dozens of web sites. Great hiring managers know three things:
- They don’t have the time to go through an in-basket full of unqualified resumes
- They know that the one-size-fits-all resume is perhaps the poorest document ever created. It is generalistic, vague, and rarely indicates if the candidate has used required skills WITHIN a similar environment, as well as accomplishments tend to be exaggerated and without verifiable substance.
- Great hiring managers know that professional successful executive search consultants are good at what they do and do not pretend to be a Hiring Manager who may be a CXO or VP of engineering or sales or whatever. So why do so many Hiring Managers assume they are great recruiters? Trust me, in all my years, it is less than 1% who are good at both roles AND those who can do both are very successful startup entrepreneurs in early stage building their executive team.
Finally ALWAYS evaluate an executive search firm by three factors
- Candidate placement retention rate is far and above client retention rate. That is because some companies will prefer the cheapest or who best serves HR rather than the client on the whole. For instance, NextGen has an average 93% in 4.5 years are still working for that client whereas we have lost new searches with the same client to other firms with an average 2 years or less of placement retention.
- The average replacement guarantee for contingency is 30 to 90 days, which of course should alarm you as the confidence in the quality of candidates presented for you to hire just can;t be that good. Basically any average “C player” can be presented and hired and a company not realize in under 90 days wow that hire is just a body filling a space. The average retained is 90 days to 6 months while a very few will go one year. At NextGen we offer a full 24 to 46 months replacement guarantee.
- Executive levels with MBOs – most retained search firm you will pay the entire fee without regards to an actual hire or success within 60 to 120 days. For many they believe you are paying them for their reputation and experience, NOT for their success.
For more information on how to effectively evaluate an executive search firm, download the PDF to compare what NextGen Global Executive Search does to others.
Why do Hiring Managers want behavioral assessments? The end goal is to make the RIGHT HIRE to achieve quick ASSIMILATION, faster PRODUCTIVITY, and longer RETENTION. Behavioral assessment (sometimes referred to as “Psychometric Testing”) has become increasingly recognized as a valuable source of information when making hiring decisions.
There is a wealth of data to demonstrate that using behavioral assessments in conjunction with sound, responsible recruitment methods reduces employee turnover, and it’s quickly becoming standard practice for many employers and recruiters.
When used strictly one-sided whereas applicants/candidates are tested, the results are vague and often mis-interpreted. In addition, when compared to a one-size fits-all “corporate culture” , the results don’t help in determining if said candidate is really a good fit for the team he/she will work within AND what effects they will have on team dynamics . The one-sided test isn’t worth the additional time and expense
When in the current economic climate is behavioral assessments REALLY an essential part of assessing potential candidates? When testing a candidate, what are you measuring the results against?
Just in case you’re unfamiliar with behavioral assessment, although the process varies from company to company, it usually involves a questionnaire that asks the candidate about their opinions, preferences and priorities. Behavioral reports can include information such as preferred working environment, how they respond to tight deadlines, preferred management style, approach to selling, and much more.
Define the Role using Team Behavioral Assessments
Figuring out exactly the kind of candidate you’re looking for and creating a job description to match can be a time‐consuming headache. But a simple job survey of the direct stakeholders to the role you are recruiting for, lasting around 12-14 minutes, will produce detailed analysis on how those stakeholders view the role and a composite team analysis on these FOUR POINTS:
Save TIME by Conducting Fewer Interviews
A resume or LinkedIn profile tells you whether a person has some of the qualifications and job history but usually it’s impossible to tell if a person has the right attitude, accomplishments until you interview them. Behavioral assessments, on the other hand, can provide you with that information in a fair and objective fashion.
So if, for example, you have 3 to 4 candidates that look great on paper, TWO-WAY behavioral assessments can help you reduce that shortlist to a more manageable number, and leave you with a much more efficient interview process.
An often-overlooked feature of behavioral assessment is its ability to tell you the training and management styles to use to get the best results from your new employee. Getting your recruit up to speed quickly and making them feel comfortable in the role with fast productivity is not only a time saver but it also reduces the expenses incurred through downtime.
Two-Way Behavioral Assessments Reduces Employee Turnover
We’ve already mentioned the fact that behavioral assessments reduces employee turnover, but have you ever stopped to consider just how expensive and time consuming it can be to replace a bad hire?
Aside from the fact that you have to spend time and money, repeating the recruitment process all over again, you also have to repeat the expense of onboarding and assimilation for the eventual replacement.
Although prices vary quite a bit, the average cost of behavioral assessments are s often far less than employers imagine. And any one of the above four points would more than justify the additional, modest investment. But put these four elements together and you have a potential saving of time and money that represents thousands of dollars. Especially in consideration of reducing employee turnover.
Embracing next technology healthcare without adequate preparation will only open new risk avenues and threat vectors for healthcare cyber attacks. Technology is perceived as a solution to address operational inefficiencies within the healthcare industry and to expand the reach of high quality healthcare services to remote regions. But the risks are mounting.
Vulnerable Devices for Critical Medical Practices
The proliferation of smart technologies will encompass the healthcare industry in coming years. Digital devices such as smart pacemakers and insulin pumps are used widely today, and the next generation of smart technologies will cover a variety of critical cardiovascular, respiratory, and neurological medical practices. However, next technology healthcare devices aren’t immune to sophisticated attacks. In control of malicious actors, vulnerable smart medical devices can deliver the killer blow to patients instead of maintaining stable health.
Cloud Vulnerabilities for Healthcare Cyber Attacks
Cloud connectivity is critical to access patient information anywhere-anytime, a promise that’s driving transition to the cloud for healthcare institutions. PHI data is effectively stored in off-site data centers beyond the control of healthcare providers originally in charge of maintaining patient data privacy and security. Any vulnerability in their cloud networks is an open invitation for hackers to compromise sensitive patient information.
Unlike cloud vendors subject to stringent compliance regulations, patients themselves are unable to secure IoT-connected medical devices at home. A malware infected dialysis machine could be part
of a DDoS attack intended to bring down the entire network infrastructure of a hospital. Since IoT devices come from multiple vendors, through different processes and offer different technologies, it’s not entirely possible to maintain a consistent standard and control around healthcare cyber attacks and IoT device security.
Next Technology Healthcare Cyber Attacks to Mobile Apps
Healthcare providers adopting telemedicine practices using smartphone health apps may not realize or control the personally identifiable information shared with third-party advertisers. These apps run on mobile platforms vulnerable to security threats, especially when the OS is not updated to apply the latest available security patches.
Considering the general lack of security awareness among patients using outdated mobile app and OS versions, and fall prey to mundane social engineering ploys, the industry has a long way to go before considering mobile apps as secure channels to offer effective firewalls and security against healthcare cyver attacks.
Do you think the next technology healthcare industry is ready to take a deep dive into cyber security adoption without adequate preparation and fixing loopholes that exist within the technology itself?
Recruiting expertise in medical devices and electronic health records
Need an executive search consultant with deep knowledge and contacts in the medical field? NextGen has identified and recruited key personnel ranging from principal / chief engineers in software development, systems design, and embedded wireless to directors and VPs in sales, business development, and technology to president of business unit for medical device manufacturers, electronic health records developers, clinical integration, and bio medical research and development.