By Curtis Krause, CFA
Every talent team faces a build-versus-buy decision: run searches internally or partner externally. “Going direct” (ie. posting publicly, sourcing on LinkedIn, leaning on inbound and referrals) may seem like the obvious answer as it creates the perception that the company retains:
• more control
• lower costs
• without needing to explain / translate company, team, role, etc.
So why not just do it yourself?
The observation
Going direct used to be a smart default for lower scope roles, where the opportunity cost of leadership time was small, and a miss was survivable. But we’re now seeing this direct playbook move upstream into MD+ roles where the stakes change. Three current examples:
- MD Investment Strategy (12-15 years experience) at one of the country’s largest life insurers
- MD Public Investments (12+ years experience ) at a leading foundation, with base compensation listed at $450k
- MD Head of midWest Institutional Sales (15+ years experience) at a global equity manager
At this level, both the upside from a home run or the downside of a strikeout are nonlinear. These roles report into global leadership, are cross-functional and highly visible. These roles include significant client-facing responsibility and/or regular presentations to the Board and IC. These are not “high churn” seats. They are roles where the right hire can shift outcomes while the wrong hire can quietly tax performance for years.
Before moving into executive search, I was an operator at alternative managers across client/product, fundraising, and revenue leadership, working closely with internal TA on senior external hires. We constantly debated when to run a search ourselves versus bringing in outside help and learned the trade-offs the hard way. Five lessons stand out:
1) the market-mapping challenge and adverse selection
Your view of the candidate market gets colored by the most visible – the subset we touch – overindexing on:
• Applicants – active job seekers
• Referrals – your network’s network
• Low Hanging fruit – people easy to find or easy to assess quickly
And simultaneously underindexing on those:
• succeeding in their current seat,
• discreet and unlikely to apply
• reachable only through targeted outreach and peer-level credibility.
The risk is an illusion of coverage.
2) the Persuasion problem
For senior roles, you’re not “selecting” as much as recruiting. Top candidates need targeted outreach, peer level credibility, and a customized value proposition to their situation. Moreover, top MD+ candidates interpret process quality as a proxy for the firm’s quality. Anything less than an excellent direct process can turn off the exact people you’re trying to attract.
3) Referrals high-quality, but biased
Referrals can surface excellent candidates, but they’re not neutral. They tend to be:
• narrow (same school and company alumni circles),
• politically influenced (“help my person”),
• soft on fit (with chemistry and similarity to incumbent substituting for objective evidence).
4) Signal-to-noise collapses, and the process turns into shortcuts
When applicant volume overwhelms, or when the day job inevitably crowds out recruiting, even the most disciplined teams start simplifying:
• keyword screens,
• prestige proxies,
• quick pattern-matching,
• “who looks most like our last good hire.”
As postings attract more applicants, particularly for senior roles where compensation is increasingly transparent, the volume problem worsens.
The implication is that strong people get lost in the pile, not to mention many of the best never join the pile in the first place.
5) The cost reality versus perception
The biggest cost in senior hiring is leadership time. When you run it direct, your most expensive people end up getting drawn into time-consuming work. Every extra interview, reset, and false start consumes leadership attention and slows the business. A retained partner absorbs the workload and reduces waste with a real market map and slate of pre-vetted, genuinely interested and well referenced candidates.
Why this decision matters more for MD+ roles
For senior hires, early failure or early exit is common enough that it should make you wary of false economies in the hiring process. Harvard Business Review cites a 50% chance a senior executive will leave within 18 months, with one estimate of failure cost reaching 10x salary. Given these stakes, the search method should optimize for:
• comprehensive coverage,
• honest calibration,
• high-signal assessment,
• and discretion.
Going direct is a powerful tool, and helpful in the right context as part of a broader search strategy. My experience prior to search taught me that going direct worked best for situations where time to fill wasn’t critical, where we could wait even perpetually for our perfect candidate, where the role was not critical and didn’t require a highly specific or complex profile. In contrast, if we could answer yes to 2 or more of these questions, the risk of going direct outweighed the savings:
• Would a miss plausibly cost 12–24 months of performance or credibility?
• Is the best candidate likely not applying?
• Is confidentiality material (team, clients, competitors, market optics)?
• Do you need a real market map of tradeoffs across profiles, not just a shortlist of names?
• Does your team need structured calibration (scorecards, consistent bar)?