A lot of companies find recruiting on their own complex when looking for C-suite employees. One of the fundamental causes contributing to the difficulty in locating talent, particularly for leadership jobs is the ever-expanding skills gap.
Collaboration with an executive search agency is a crucial answer to this problem for most companies.
However, as a recruitment entrepreneur, if you’re looking forward to setting up your own executive search agency, understanding how such firms work is critical to making the most out of your business.
You’ll firstly need to have your business model in place with proper goals. There needs to be accurate customer segmentation and budgeting (the amount you will spend on employee salaries, recruitment software etc.) done.
But before we talk about these, let’s first understand how such search firms work.
2 main goals of executive search firms
1. Delivering a different solution for each client
You’ll need to clearly understand what such high-level positions demand. In simple terms, you will need to apprehend the duties and responsibilities that come with such roles.
The demand of each open position is as unique as your client.
Executive search firms usually combine experiences of their past hiring processes to learn more about a client and produce a tailored solution.
As a result, these firms can completely understand the influence an executive function has on their client’s company.
The search yields a candidate that can complete their function and contribute to general corporate goals.
Let’s say your client is looking for a candidate to fill the post of VP of Human Resources. A broad search may help you identify a candidate who meets their on-paper job criteria.
However, the search needs to get narrower to further establish whether employing that candidate would have the desired impact that your client is looking for in their company.
To make sure they meet client expectations, an executive search agency leverages its industry skills and connections to respond to a more in-depth search requirement.
2. Engage clients & candidates actively to enhance the search process
Keeping both the candidates and the clients engaged throughout the executive search process is crucial in order to provide a stellar candidate and client experience.
This will literally make or break your search firm!
All about executive placements
Executive search agencies place candidates at the executive level such as Directors, VPs, and other C-level positions.
Here pay packages include high base wages and quarterly or yearly bonus possibilities, deferred income, relocation aid, and attractive benefits and employee stock options.
An executive search is a multidimensional, sensitive process with long-term consequences for your client.
The headhunters you hire for your agency should have held various leadership positions throughout their careers in the past, and their knowledge and expertise should help you execute a smooth and effective search.
Why do companies hire executive search firms?
Executive search firms often also serve as consultants to their clients.
Companies with open C-suite positions will hire a search agency to get hold of suitable candidates if they do not have the time or resources to search themselves, which may be time-consuming and labor heavy.
In addition, traditional ways of posting a job online can sometimes generate hundreds of responses from unqualified individuals, which the hiring manager must filter through.
When using an executive search agency, the hiring manager will only get pre-screened applicants that fulfill the job description.
How do executive search firms hire top talent?
To locate acceptable candidates for clients, executive search agencies leverage their connections as well as their in-depth understanding of the respective field.
Executive search recruiters conduct in-depth interviews before presenting prospects to their clients on a case-by-case basis. They can assist clients in creating accurate and appealing job descriptions to attract a pool of competent candidates.
Once the process is completed and a candidate is hired, the search company gets compensated for its services.
These search firms identify qualified candidates by communicating on social networking sites (primarily LinkedIn), sending emails or InMails, advanced internet search strategies, and posting on numerous specialist job boards.
Furthermore, search agencies have enormous databases of already vetted, competent applicants in their talent pool and connections they have created in-person or virtually through professional networking events.
Executive search firms typically work on a retainer model
Executive search firms typically work on a retainer model to discover candidates for senior-level positions.
A retained search involves the client paying a small amount of the money in advance to begin the search. The initial deposit is credited to the total fee owed after placing a candidate.
Your agency should usually charge about 25% of the starting salary of the position they are recruiting for and might later include more bonuses and commissions that need to be fulfilled by their client if they agree to it.
Sometimes the amount is also paid in 3 stages— 30% on signing the contract, 30% when an offer is made, and the remaining 40% when the candidate joins.
This model produces a more consultative process where recruiters assist in every stage, from writing a job description to crafting a job offer letter.
What is the duration of a typical executive search?
From sourcing to the candidate finally being offered the role, the process typically takes 90 days.
This duration can also be influenced by various factors, such as your client organization’s ability to make swift choices and the competition in the market.
Meeting that 90-day deadline necessitates a thorough grasp of your client’s requirements and how the role contributes to its goal. Unfortunately, starting without a deep dive into competencies, talent, abilities, and expertise you require usually implies you’ll ramble and won’t meet your deadline.
Is executive recruiting the same as staffing?
No, staffing and executive recruiting are not the same.
Staffing agencies usually work with junior and mid-level roles. Here, the agency recruiters log in to the right site, conduct a short keyword search, and quickly generate a list of ‘eligible candidates’ for their clients.
These agencies mainly work on a contingent basis.
The life of an executive recruiter, on the other hand, is somewhat different. The client looking to fill an executive position often wants to identify the best applicants available – and hence prefers to work exclusively.