There are different types of Executive Search and each is effective in its own way. The difference is primarily in the level of service required and the level of experience of the desired talent. The search consultant’s compensation is usually based on a percentage of the new hire’s salary, anywhere from 20 – 33% depending on which type of search model and level of talent sought.
Retained Search – As the name implies, this search model entails an upfront retainer fee for services provided. Payment terms are usually a third of the fee up front, with another third due at an agreed upon time (sometimes 30-45 days or when a certain amount of candidates are presented) with the remaining payment due upon a represented talent accepting a position with the client. In this model, the Executive Search Consultant acts as a true consultant, advising the client company with regard to search process and thoroughly identifying, qualifying and reviewing potential candidates for specific leadership positions.Included in this model are services like:
‚¬ Consulting with hiring manager(s) and principals to review/ revise job profile/description
‚¬ Creation of a recruitment strategy and ideal talent profile
‚¬ Research of competitive talent landscape and client competitors
‚¬ Positioning/profiling of passive talent and initial talent contact
‚¬ Conducting of candidate interviews and presentation of viable candidates
‚¬ Scheduling of phone and in-person interviews between candidates and client
‚¬ Gathering of feedback with interviewers and the candidates
‚¬ Continual updates/progress reports to the client throughout process
This model is most effective for high level executive positions (Senior Director to C-Level) and/or hard to find talent where a specific and exceptional skillset is required for the role. Often referred to as ‚¬”Headhunting‚¬, Retained Search is a disruptive methodology – most of the candidates targeted are ‚¬”passive‚¬, already working in a similar position for another company. In this sense, your Executive Search Consultant acts more like a member of your Marketing Department, connecting with highly sought after talent to engage their interest in your position and company.
A Retained Executive Search Consultant’s loyalty lies with the client and as such, the consultant will endeavor to bring the best talent for consideration and present a realistic assessment of the candidate’s strengths and alignments as well as areas of potential growth. And as a contracted consultant to the client, they are free to share competitive information that they collect during the course of the search.
Retained Search is a partnership between client and Executive Search Consultant that most often results in the client finding the best and most uniquely qualified talent for their critical position as well as an enhancement of the client’s employer brand in the competitive marketplace.
Engaged Search – This model is a variation of the Retained Search model whereby an initial service fee is due upon engagement (usually a flat fee or percentage of the position salary) with the remainder due upon a talent accepting a position with the client. This model is most effective for Mid-level Executive talent (Senior Manager to Director Level) or for smaller company clients for whom a fully Retained Search is not cost effective.This model gives the client and the Executive Search Consultant the opportunity to build a relationship based on mutual trust that would presumably evolve into an ongoing Retained Search relationship. Much of the research and passive candidate sourcing is the same as with the Retained model, but the difference would be a matter of the search’s priority for the Executive Search Consultant and with the sharing of derived competitive intelligence. This model is more about providing talent to consider and less about consulting with regard to process or search innovation.
Engaged Search is a mutual understanding between client and Executive Search Consultant that results in quality candidates being introduced for consideration and the opportunity for client and Executive Search Consultant to build a strong trust built relationship.
Contingent Search – This model is most effective for entry level to junior management level roles, especially for large companies looking to fill multiple positions. Contingent search involves no initial upfront fee for the client with the recruiter being compensated upon the successful completion of a search with a commission based on the salary of the talent. The most common manifestation of a contingent search is the traditional job posting placed on a job site like Monster or The Ladders. In that sense, Contingent Search is a bit of a misnomer; most contingent recruiters will repost an employer’s job description on various job sites and not conduct an actual ‚¬”search‚¬ or any candidate outreach on behalf of a client.
While there’s no commitment on the client’s part in regards to a partnership with a Contingent recruiter, that relationship is the same in reverse. The challenge with the Contingent model is often that the talent presented is of lesser quality and being reliant onclosing commission based deals, a contingent recruiter will devote less attention to an individual client’s specific needs. Additionally a contingent recruiter may present the same candidate to multiple employers to maximize their chance of a placement and size of their commission and whereas a Retained Executive Search Consultant will present a full assessment of a candidate to the client, a contingent recruiter may likely downplay or omit any negative assessments they have about the talent they are presenting.
Contingent search can be effective in supplementing a client’s existing talent acquisition efforts or talent pipeline and can produce a large quantity of applicants. However, there’s often a tradeoff with regard to quality of talent and level of service.
Talent Acquisition Strategy Consulting – An additional option to consider when faced with a need to find top talent with an eye towards cost effectiveness. Some Retained search firms are beginning to offer Talent Acquisition Strategy Consulting a solution that is especially effective for startup companies. The fee for service in this model is a traditional hourly consulting fee, enabling the client to utilize the Executive Search Consultant’s expertise without the upfront fee and with the ability to more deftly allocate costs.
In this model, the Executive Search Consultant is hired by a client to act as an in-house consultant to either supplement an existing team or act as an outsourced process solution. Many temporary staffing firms offer RPO solutions (Recruitment Process Outsourcing) whereby they operate as a client’s talent acquisition team. But whereas RPO performs inbound screening of applicants for entry to mid-level openings, the Talent Acquisition Strategy consultant would work with the executive level team of the company and in essence ‚¬”teach them to fish‚¬.
The Executive Search Consultant serves as an advisor to the Executive Team and helps them set up an Executive Recruiting process for the company with regard to sourcing strategy, understanding their employer brand and competitive landscape and guidingthem through the tactical steps of finding and engaging the talent they are seeking. The responsibility for the outreach to the talent and subsequent engagement tasks would be assigned to the Executive Team so they can gain the experience necessary to repeat the process on their own for subsequent searches.