So, for those who have had a great deal of experience hiring a search firm, no doubt the following will ring familiar. For those who have had little or no experience hiring a retained search consultant before, this should provide a short form framework for both the process, and the economics. As well, the following should help outline how retained search differs from other types of recruiting services.
In contrast to the similarities among professional services and advisory firms referred to above, in retained executive search, the processes and methodologies deployed by each search firm are often very much not the same. Just as one surgeon may use one technique, and another might not, retained search consultants differ widely in the processes they use, and the different methodologies they lever on behalf of their clients’ needs to ultimately secure the best executive talent for the role needed. If there were a caveat emptor or “buyer beware” alert, it would apply here. Are there any similarities between firms? Of course. But herein lie the reasons a client would want to hire one retained firm over another.
At BSG, there are three broad stages in each search engagement on which we’re retained:
Discovery is the stage where we invest time learning all we need to know about the company and the position being sought. This involves an in-person meeting with the company and the key stakeholders in the success of the position. Information collected across the discovery phase includes but is absolutely not limited to the following:
BSG has developed a proprietary toolbox for discovery that allows us to collect critical information for the success of the search. And we’re happy to share more about our approach with you and how it’s both different, and better.
Duration: 1-5 business days (client dependent)
Documentation is the phase of the search process where BSG synthesizes all the information collected during the discovery phase, and delivers a set of internal and external documents and tools used by our client and ourselves in executing the search during the third stage of the search process, the delivery phase. BSG has a set of unique and proprietary tools that have proven to maximize candidate pool yield. We’re happy to share more about these ahead of any engagement to educate the client on our differences.
Duration: 1-5 business days (client dependent)
Delivery phase comprises the bulk of the search timeline and includes the following steps:
As above, BSG has demonstrably innovated the delivery stage with a methodology and set of tools that allow for greater transparency of the process, faster candidate interviewing, and deeper candidate assessment techniques that deliver what we consider to be the gold standard in company-candidate fit assessment.
Duration: 90% of BSG searches identified the ultimate candidate hired in the first 30 calendar days from search kick-off. 90% of BSG searches have completed candidate recruiting and BSG candidate assessment within the first 60 days of search kick-off. Much of the length of the rest of search timeline is company-paced, and we work with each client to move with a sense of urgency and purpose commensurate with the importance of the role and impact on near term business objectives.
The difference in fee structures is what often jumps out first to companies in the market for executive recruiting services. Often, clients have had more prior experience with a branch of recruiting called “contingency recruiting”—simply put, if a contingency recruiter introduces a candidate to a company for a specific role, and the company hires that candidate, the company pays a fee. This fee is “contingent” on hiring. If the company doesn’t hire any of the candidates put forth by a recruiter, there is no cost to the company. It’s not dissimilar to buying a house through a broker—you only pay if you close on the property, paying nothing if no purchase is ever consummated.
Retained search economics is quite different, and more like selecting a doctor for a medical procedure than picking a real estate agent. We pay a doctor for the process, not the outcome. And because of this, we often ask others who have had a similar procedure who they used, carefully checking references on things like number of similar procedures performed recently, the percentage of successful outcomes, availability, bedside manner and more. After selecting the physician we feel best suits our needs, we and the medical team do all possible to optimize the outcome, but have no guaranty of success. Retained search follows this same general payment structure.
And what of price? Again, other professions like medical, legal, or management consulting offer the best comparison. When hiring a lawyer, usually the more experienced the lawyer, the higher their hourly rate. Similarly with a surgeon. This is also often true within management consulting—the more experienced a doctor or consultant is, the higher their fees. The assumption is that if someone has more experience (and likely success), they’ll be better able to cut to the quick of the core issues in play, diagnose most accurately, and help efficiently and effectively solve whatever problem or opportunity is being tackled.
Retained executive search is similar not just in payment terms to these other professions above, but in price. The more experience and prior success a search firm has, the less discounting is likely to occur.