How to Select an Executive Recruiting Firm

1. Create a short list
This directory will help you build a short list of search firms and individual recruiters who should have the right background to work successfully on your assignment. At this stage your primary concern should be to target recruiters who have recently filled similar positions for comparable companies. In all likelihood your company has relationships with a number of recruiters, some of whom may be relevant for this search. Check with colleagues in other departments or friendly contacts at other companies to get additional recommendations. The number of names on a good short list will depend on the assignment in question, but we recommend it includes a mixture of large, generalist firms as well as smaller specialists.

2. Ask Recruiters Questions
When you telephone short-listed recruiters, have a list of questions ready and go through the list with each recruiter. Your objective at this stage is to whittle down your list to a handful of finalists who you will most likely invite to a face-to-face meeting where the recruiter will formally present their credentials and recommended approach.

Here are some simple questions:

3. Balance Industry Experience Against Blockage Problems
Companies usually want to select a recruiter with experience and contacts in their industry. Unfortunately, if the best recruiter has worked recently with two of your closest competitors, both companies will probably be “off-limits” for you immediate assignment, thereby limiting the available field of candidates.

This critical issue must be assessed carefully on a case-by case basis. If you view your direct competitors as highly likely sources to fill the position, do not work with a recruiter who cannot touch those executives. However, it is usually an acceptable compromise to use a recruiter who is intimately familiar with your industry and has a few blocked competitors.

The standard “off-limits” policy in the recruiting industry has been that a search firm will not approach a company for whom it has worked during the previous two years. But be aware that there are considerable variations from this norm, and the very ground rules are in flux. Some recruiters specify one year instead of two. This will mean they have fewer companies that are blocked from you, but it will also mean your own future protection against being raided is that much shorter. Some search firms observe no off-limits restrictions, and some clients do not require it.

The “off-limits” problem has second dimension. When a retainer recruiter is working on an assignment, he or she will typically take possession of the search firm’s files on suitable candidates for the position. If you then retain a second recruiter at the same firm, this recruiter will not have access to these files until the first recruiter returns them to the firm’s database. This policy is designed to avoid outright competition for executives within a search firm. For large firms that work on many assignments, at once, and for highly specialized firms, it can mean that many of the best candidates are not available to you. Ask about the number of searches that will be going on simultaneously in your area. Your recruiter will always try to gather the best slate of candidates for you, but if the files of the five best VP’s of Business Development in telecommunications are sitting on a fellow recruiter’s desk, down the corridor, you are never going to see them.

4. Evaluate Search Firm Presentations
For higher end assignments the more aggressive search firms you work will often assemble thorough briefings that include target executives — a good reason not to skip this phase of the process. Expect every firm to have smooth, professional presentations. Your challenge is not to focus on the quality of the sales pitch but to assess the real expertise, cultural fit and enthusiasm of each recruiter. Is this someone you will enjoy working with? Do they seem sensitive to the special characteristics of your company? Are they savvy to any internal politics? Do they have any unusual and creative ideas for the position that needs to be filled? How responsive are they to your own suggestions? Pay attention to what is not said. Are there companies that should be important hunting grounds for your assignment where the recruiter appears uncomfortable or changes the subject? Many recruiters hope that the clients do not ask directly about companies that are “off-limits” to them — a kind of “don’t ask, don’t tell” policy. Your best strategy is to ask about every company you want the recruiter to consider.

5. Clarify Who Will Do the Work
By now you should have one or two front runners. Before you pick the winner, there is one more trap to be avoided. Some recruiting firms are blessed with tremendous “rainmakers”— people who are skilled at winning assignments from companies and who spend most of their time doing just that. Charismatic, powerful, entertaining — these rainmakers are experts at attracting clients, but once the assignment is old they move on to the next opportunity, leaving the actual search to other members of the firm. Since an important part of your choice should be your sense of rapport with the recruiter you expect to work with, make sure that his person will be closely involve during the following months. How many other assignments will they be handling? How do they manage their workload? Will others be involved? What will they be doing? Who should you be calling day-to day?

Recruiting firms also differ in the extent to which they use back-room research staffs. Some firms, particularly the largest ones, employ almost as many researchers as recruiting consultants. Researchers do much of the front-end work on an assignment, scouring through databases to uncover candidates, and often making the initial contact to gauge a candidate's interest. This can be an effective way to speed up an assignment, allowing your recruiter to focus on evaluating the candidates. The danger is that the busy recruiter ends up relying too much on the short-list of candidates presented by a researcher. The best searches usually involve a good blend of digging for resumes (by researchers) and inspired networking (by recruiters). Make sure the firm you work with is not overly dependent on just one approach.

6. Make the Final Choice
Your final decision may well come down to the finalists’ track records and your gut feelings about each recruiter. A few years ago, Korn/Ferry Int’l. (the largest retainer firm) commissioned a market research group to ask companies which were the most important factors for senior-level searches. The 10 factors, from most to least important were:

One Fortune 500 company’s head of HR reported a different perspective to Executive Recruiter News. They pick retain search firms based on these seven factors:

The search firm must have completed searches at comparable salary levels in the last three years for one of their divisions or a “highly reliable” reference in other Fortune 500 companies.

The search firm must not offer out-placement or career counseling to executive, but it can occasionally operate on a contingency fee basis. Maximum fees are 33.3%. They try for 30% and they negotiate on whether or not the executive’s bonus is included in the calculations of fees. Expenses are reimbursed only for mail, long distance phone and pre-approved travel.

There should be a two-year off-limits policy, preferably applying to their entire company, though this policy is flexible for a middle manager divisional position. Off-limits situation at other companies must be identified at the outset.

If the new executive resigns or is terminated for performance-related reasons within 90 days, the search firm should work without charge to find a replacement.