MYTH: “The larger the executive search firm, the better the search.”
FACT: “Smaller, boutique executive search firms typically outperform the large, bulge bracket firms with greater access to top talent, higher completion rates, and faster time-to-close rates.”
When hiring an executive search firm, many companies “Play It Safe” and hire one of the large, bulge bracket search firms: “If the search fails, my Board, my boss, cannot get upset with me because we hired one of the largest search firms, and therefore one of the best.” Boasting about hundreds of partners worldwide and 50+ offices, the large firms often are perceived as the “Safe Bet.” But plugging their size as their most critical market differentiator will not fill your search.
Having worked at both the large firms and now the boutiques, we have personally confronted the many challenges the large firms have in delivering on searches. You are not “Playing It Safe.”
Myth #1: “Our size and prestige give us access to the biggest talent pool in your industry.”
Large firms tout that they have a higher response rate from executives because of their size and their prestige brand, but this is nonsense when they are blocked from calling an executive. Large firms have shrinking talent pools due to their off-limits clause. When your search firm is blocked from recruiting from numerous client organizations, you are blocked from the top talent.
Large Executive Search Firm = More Clients = Fewer Candidates
Solution: Make sure your search firm has access to the top talent in your industry. Spell out clearly the off limits: “Where and who can and can’t you target?” Build out a target list of companies and executives, and go one step further and make the target list a binding guarantee in the search contract.
Myth #2: “We know the talent better because we are doing, and have done dozens, of similar searches.”
Given their scale, a larger firm may be running dozens of similar searches concurrently. Most use this as a market differentiator. Not only does this firm have obvious off-limits issues, but even more importantly, the fierce internal competition amongst its consultants will further restrict your access to the top talent. Often when an executive is already a candidate on one search, that same executive is blocked from being considered for another search.
Solution: Understand the internal competition for talent. How many similar searches is your executive search firm currently conducting? You are already competing in a fierce market for top talent. You should not have to compete against your search firm.
Myth #3: “We have the BIGGEST DATABASE in the world!”
In today’s open environment, relying solely on an internal database is not enough. Your search firm must utilize all resources and map the market for every search leaving no stone unturned. This sets apart a player from a champion. One can be the most well networked headhunter in the world, but may still know only a small segment of the entire market.
Solution: Insist on market mapping. Your executive search partner must employ all resources, not just their internal database, to exhaust the market in their search to uncover the top talent.
Myth #4: “We have broader industry experience and a deeper knowledge base.”
Your search firm should have experience with a broad range of companies, from venture backed companies to the Fortune 500. Often due to fee restraints, the large firms are unable or choose not to work with the smaller, entrepreneurial companies. The boutique search firms are not burdened by such restraints, so they can work with a broader client base ranging from early stage to mid-size to the Fortune 500. Here at Calibre One, we have found that our public company clients appreciate our broader company experience and expertise. They see us as more capable in building a larger ecosystem and broader talent base, given our direct experience in working for and recruiting from companies of all sizes.
Solution: Ensure that your executive search firm has worked with a broad client base and knows how to assess and work with talent from all types of organizations, ranging from the small, entrepreneurial companies to the Fortune 500.
Myth #5: “We are motivated to complete your search (despite our time based billing model).”
Large firms still follow the archaic practice of time based billing: First payment upon commencement of the search; second payment at 30 days; and final payment at 60 days. Time based billing has nothing to do with delivery and performance. This archaic practice motivates search consultants to focus on bringing in searches, rather than on completing searches. In turn, their revenues are tied to time, not performance. In maximizing revenue and their incomes, some search consultants are known to carry 15, even 20 searches at one time while pushing 80%, 90%, even 100% of the candidate outreach to junior team members, allowing them to focus on driving revenue.
Solution: Your search firm must have “skin in the game!” Tie payment to performance and milestones. Time based billing is a relic from the distant “Bubble Years.” Also, know your search team. Demand and expect a consultant led and consultant executed search. Their focus should be on completing your search, and not on their business development efforts and revenue.
CONCLUSION: “Playing it safe” in fact is not safe!
About Calibre One
Calibre One is a global executive search firm that partners with some of the world’s most successful companies. Our clients range from major global giants to high-growth market pioneers. Visit our Testimonials page to read comments from our clients.