According to Leadership IQ, 46% of new hires will fail within 18 months. The statistics only get worse. Take a hard look at the expanded facts as presented by Dr. John Sullivan on ERE. About the 6 Ugly Numbers Revealing Recruiting’s Dirty Little Secret. Choosing the type of search firm to work with is not an easy choice. It is astonishing but not surprising. When the agenda is how cheap can recruiting be done, the results are obvious.
Instead of looking deeply at the process a recruitment firm uses to identify, assess, and deliver potential candidates. When filling a key role, the cost of the fees is the first mindset. What you should be thinking about is the end game – the services offering differentiation and the results.
Does the search firm accept verbatim the job spec verbatim?
- brief overview of the company culture, benefits, and market position. Rather than on the opportunity (USPs) of what this role will do to elevate one’s career. As well as the challenge being offered to entice interest
- Job specs focus on responsibilities when the focus should be on short- and long-term objectives with timelines.
- Too much emphasis on boiler plate requirements including skills and experience. The focus should be on prior directly related accomplishments & key performance indicators. What the new hire has done and will do with those skills and experiences. Not simply the number of years he/she has had them.
Simple economics is that the supply of good candidates is low while the demand to fill key roles is high. As such, using job boards or career websites means that only active job seekers. Sadly in today’s market that is most often the underemployed and unemployable. Because with low unemployment rates, good candidates are very passive.
They don’t look at job postings and they rarely respond to recruiter type emails. Those who are happy with their role, current employer, compensation; as such they are rarely ever looking for a job. They are open to a challenge, the opportunity (unique selling points), possibly location, product or service, and company size.
Does the search firm have a verifiable track record of new hire retention?
It seems odd to me that one would not ask for proof of this. Case in point is I have a direct competitor who is larger than my firm with more offices. We both have done retained search for the same client. We have each placed 3 at the C suite and VP levels. All three of my competitor’s placements departed within 2 years while the three we placed are not only still there at 3.5 years but have been promoted and are meeting or exceeding the objectives for their respective roles.
What makes the difference? The search process, assessments methodology, using psychometrics and the type of relationship. My competitor interfaces with and is managed by the client’s HR group while we work directly with Executive Hiring Managers. One more thing – look at the firm’s replacement guarantee clause. If it is ranges from 90 days to one year, that tells you they don’t stand behind their work. At NextGen Global, we stand behind our work with a 24 to 36 months replacement guarantee.
Does the search firm use science based methods and AI to identify team dynamics?
Let’s go back to that Leadership IQ study where it found that not only do 46% of new hires will fail within 18 months, but at the executive level it is for lack of interpersonal communications skills. The truth is EACH team is unique. By creating a composite of the team profile measuring values, motivations, decision-making traits, conflict resolution skills, relational communications traits, leadership and people skills, the recruiter can then compare the potential candidates’ capabilities to make sure they are either a strong or potential match. Choosing the type of search firm as you can see is part science, part experienced based skill set.
Choosing the type of search firm based on niche specialty
We pride ourselves on being startup experts. While we do perform retained and succession bench search for one role at a time, over the years we have partnered with an outsourced HR and payroll services firm to offer Team Building talent acquisition management services for startups with less than 25 employees in the initial startup phase.
We save clients hundreds of thousands of dollars while filling key roles they need to meet customer or product/service design and roll-outs. Our work is primarily with startups, mid-cap, and spin-offs. We rarely recruit for publicly traded companies or companies large than 5k employees. The reason is simple.
As entrepreneurs ourselves, we understand how VC and PE forms work, we work often with board members in recruiting entrepreneurs, risk-takers, movers and shakers who focus more on the value proposition of equity and generous stock options based on meeting performance objectives. For large companies the latter are generally limited to a select few senior executives.
The larger the company, the less effective we can be as they tend to want their HR or TA group “manage the recruiter” demanding we adapt our search process to conform to theirs. This is what we call “tying one hand behind my back” syndrome. We turn down companies asking us to do that. If you are a large conglomerate or have more than 5k employees, it is best to go with a very large firm for most positions. However, if you are looking for a senior executive or functional leader who is a change agent, a turnaround expert, a solid risk-taking decision maker or motivator, for those roles your best bet is the smaller boutique search firm.
Two neat tricks to help you choose
- Look at the Linkedin connections of the recruiters you are considering. If you need to recruit a senior executive, does the recruiter have those connections with both your industry and with C-levels? If the need is to recruit a VP of Sales of a Director of Engineering, do they have those relevant connections”? You’ll be surprised to find most recruiters’ connections are with Human Resources and other recruiters which means they have few relationships with the type of people you seek.
- Does the recruiter have intimate knowledge and experience in your industry? Look at articles and posts they’ve written. If they are all about just recruiting or job seekers instead of Artificial Intelligence, Wireless, or whatever your industry is, how well do you suppose they understand your products, services, marketplace, or customers>
When you consider the cost of retained search look past the initial fee. Look at the results of the person hired via the firm. If the new hire assimilates quickly, is immediately productive, and meets or exceeds the objectives of the role, the cost of the search fee is irrelevant. And remember, good search firm ONLY recruit “A players” who by definition produce 8 to 10 times more than “B players”. It’s really a no-brainer in the value.
- Myths in Recruiting – Part 2 of Make Better Hiring Decisions - January 7, 2020
- Affordability of Retained Search Fees – Make Better Hiring Decisions – Part 3 - January 7, 2020
- Make Better Hiring Decisions Amid Myths in Recruiting – Part 1 - December 10, 2019
- Engaging a Retained Search Firm for Multiple Key Staffing Needs is Best Option - October 31, 2019
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