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.
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.
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.
The HR recruiting process with the highest business impact often has a failure rate of 50 percent according to Dr. John Sullivan on ERE in his article “The 6 Ugly Numbers Revealing Recruiting’s Dirty Little Secret” In this article we will address the problems in Human Resources and Talent Acquisition and how to avoid common pitfalls to recruiting efforts. For the company’s senior executives and board of directors, the dependence and overhead on HR internal recruitment and Talent Acquisition groups does not produce the results desired for the company to achieve success.
Stop treating every potential candidate as active job seekers and applicants
In a soaring economy where the supply of good candidates is far outweighed by the demand to fill jobs (7.5M jobs currently remain open), the company and the recruiters are the seekers, not the other way around. Posting job openings on job boards and social media by and large generates applicants who are underemployed or unemployable. Most good potential candidates are happy with their employer, their current role, and are paid well. These successful people are not looking at job postings and are so inundated by emails and social media messaging from HR, TA, contingency, and RPOs they don’t read or respond.
Avoid Common Pitfalls to Recruiting in the HR Process
Forcing potential candidates that you’re looking for to go to your website to fill out an application is untenable. Just because you have an HRIS or ATS process that governs every candidate perform this, remember it is you that came looking for him/her; they are NOT applicants. And demanding potential candidates at the very beginning to reveal their current compensation is unethical or in many states, illegal.
If you want to attract the ideal candidates, first HR must stop the age old process of creating job postings and messages that don’t work.
The same old blah-blah corporate culture, responsibilities, requirements, and benefits overview is boring to successful people, whose actual interests will be one of the following: a new challenge, more authority, a particular product or service where they can make an impact on the market, location, company and team size, and a competitive compensation package. Appeal to their desires to attract them.
Failure to build relationships with professionals who can become future candidates
The HR recruitment process focuses on building a resume database rather than real relationships. Good executive recruiters are successful because they consistently foster relationships based on common interests with professionals – not by approaching them as potential candidates but as peers and colleagues within an industry by sharing ideas, making introductions, and asking for their advice.
Many Hiring Managers assume they are great recruiters
All hiring managers like to think they are excellent recruiters. But the track record is such that only “A players”, the top 10% of the workforce can claim that distinction. Think about it – regardless of title your primary time is focused on building sales, engineering, product management, operations, etc. How can you possibly excel at something you spend very little time doing when retained executive search consultants spend most of their time on actual recruiting.
Avoid Common Pitfalls to Recruiting in Dual Role Reality
Those dual roles of being a CXO or VP with outstanding capability to lead strategy, manage a team, and deliver while at the same time having the skills and time to conduct recruiting is very, very rare. Want further proof? About one-third of the hiring managers today just want a few notes and a resume. The resume is by far the worst presentation tool ever created. It is generally a one-size-fits-all document. It reveals experience, skills, education, and accomplishments.
It is generalist in nature and rarely delves into how a person used those skills and expertise in relation to the objectives of the role you need to fill. Worst of all…and the reason to always avoid looking at the resume as a presentation tool, is once a hiring manager views the resume, 75% of their mind is already made up. Makes no matter if you provide comprehensive interview notes, measured KPIs, numbers, relevant details of similar accomplishments, and depth of industry relationships to prove the candidates can meet and exceed the objectives of the role; often their mind is already made up based solely on the resume.
Salary ranges and corporate culture fit ignore the rule of supply and demand.
Many companies have this set-in virtual stone salary ranges. Thinking that a cyber wireless engineer or AI architect are just software engineers and must fit within the SW engineering salary range is not reality. Ask Google, Uber, Microsoft – many of these types of engineers make higher compensation that their boss. It is reality with the law of supply and demand. Some companies even offer candidates less than they are making now, believing that the in-person interview revealed how much the candidate liked the company and team and expressed desire to come on board. It is simply absurd and insulting to offer someone less if in same location where cost-of-living makes no difference.
Having HR or TA make offers to candidates is not the right way to go
The person who has built a relationship of trust, usually the recruiter or hiring manager, should always be the person to make the initial verbal offer. When someone in HR or TA group makes an official offer, it is usually someone who has no real relationship with the potential new hire. The results can often be negative as the candidate feels his/her value is not appreciated and they are negotiating and speaking with someone they do not know. Avoid common pitfalls to recruiting where the HR process often fails by causing the recruiter or hiring manager to have to come in and save the day while the damage has already been done.
Low retention rates cause teams to not develop properly
Most companies have some type of onboarding but, it is more orientation and documentation. And even expensive one-size-fits-all onboarding plans fail because they require too many people to be involved. A custom onboarding plan should always consist of two parts: a self-development plan for the new hire and a mentor / coaching plan for the person the new hire will report to.
This simplifies the onboarding process by focusing on utilizing the strengths the new hire brings to the team creating action plans to address potential weaknesses. This ensures the new hire’s impact on team dynamics is positive by ensuring the objective of proper onboarding is met, which is to promote quick assimilation into the team, faster productivity, and longer retention. If you adapt your HR process and learn to avoid common pitfalls to recruiting, you will make a positive impact on your business growth.