Executive Search Firms (also know as headhunters) recruit senior individuals to client organizations.
Search firms often specialize in particular market sectors and have very strong networks in their area of specialization. This network is utilized along with other techniques to find the best people in the market place for a particular role.
Note: This Buyer Guide discusses recruiting executive level employees. Refer to the Recruiting Firm Buyer Guide for information about recruiting clerical, staff, management or technical employees.
Normally the individuals targeted by the search firm are not actively looking to leave their current position. The search firm's job is to approach these individuals with a goal of taking them out of their current company and placing them in another, often a competitor.
Executive searches are performed in one of two fashions: Retained Executive Search and Contingency Search. In the first, a retained search firms will get paid a fee regardless of whether a successful placement is made. A contingency search, on the other hand, is structured so that the firm is paid a fee only after successfully placing a candidate in the position.
A variation of a retained search is a delimited search. This type of search requires an up-front payment from the client before the firm befores the search. Unlike most retainers, however, this fee is refundable if the search firm fails to fulfill certain deliverables defined in the contract.
Fees for a contingency search in the private-sector generally fall in a range of 30 to 40 percent of the first year’s salary. The search firm is generally responsible for any expenses incurred during the search, such as advertising, travel, and lodging.
Executive search firms generally commit to off-limits agreements. These agreements prevent a firm from approaching employees from their clients as candidates for other clients. For example, if the firm recruits an executive for the ABC Company, they will agree not to recommend ABC Company executives to other companies.
Recruiting a senior executive to your company is one of your most important responsibilities. Here are some of the things you should consider before deciding to conduct the search independently:
- Do you have access to a network of qualified people who would be a good fit for the position?
- Do you have the time it will take to locate prospects, conduct the initial screening plus the in depth interviewing required for a senior level position?
- Do you trust your instincts to independently evaluate the strengths of the prospects you interview?
- How difficult will be be to locate the type of person you are looking for?
If you are concerned about the above items, you should strongly consider hiring an executive search firm to assist you.
If you decide to do it yourself, you will want to check out the tools available to registered SBI users in the Resource Center section of this site.