Options are plenty when it comes to executive search firms. On one end of the spectrum are the commandingly large firms, which come with big brand name recognition, high overhead and revenues in excess of $700 million annually. Several of these publicly traded firms have great reputations, but they have historically catered to Fortune 500 companies. If your organization is not a Fortune 500 company, your search can easily get lost in the shuffle or pushed down below the partner level, and costs can quickly exceed your price range. Worse yet, sometimes these firms will try to recruit from your organization after their one or two year hands-off commitment has expired.
On the other end of the spectrum, however, are another option: boutique search firms. You may be skeptical of these smaller firms, fearing that they lack the resources and experience to find the right executive for your organization. But these fears are often unfounded — in fact, boutique firms offer several advantages that may make them a better fit for your search.
When engaging with a boutique firm, you are more likely to deal directly with the person or team leading your project. By contrast, when engaging with a large firm, you may only engage with a partner occasionally. Often, larger firms delegate key work to less tenured associates who you have never met and who have only second-hand knowledge of your organization and its needs. This can result in candidates whose resumes match your specification on paper but may not fit your culture or your goals, which leads to mis-hires.
Executive search firms have an ethical and contractual obligation not to recruit from clients. Because large firms conduct business with so many organizations, they have significant hands-off limitations which impact their recruiting strategies. Candidates that are active on a search within a firm are also off-limits for other searches. With large firms, this can equate to thousands of candidates who are unavailable to your search, severely limiting the talent pool. Remember that while the large firms’ lengthy lists of clients may be impressive, these lists also show the companies you cannot recruit from.
You want a search team who understands your culture, major players and unique needs. The boutique business model gives search teams more time to learn these aspects of your organization and use them to inform their search. Additionally, since the lead partner usually handles the engagement directly, they are better positioned to present your opportunity, vet candidates and provide value-added insight on your industry, the market, the function and the role.
One of the most important questions to ask while interviewing search firms is, “How many searches are you currently conducting?”— and make sure that they include searches that are near completion (compensation mediation can be time-consuming for a search consultant). Typically, boutique firms work on fewer projects, and their “top-to-bottom” approach offers the client extraordinary attention to detail. Large firms, meanwhile, are usually in a constant state of growth, which limits the attention they can pay to your search. A sizable client base may be great for them, but it might not be best for you.
Many partners at large firms cannot describe their process in detail and often don’t adhere to an established methodology. This is because it is difficult to consistently execute a data-driven methodology within a large firm. Boutique firms are generally more transparent about and invested in their process.
You should expect to have access to performance metric reporting that allows you to drill down to the name, title, employer and feedback from all potential candidates that are contacted for your search. This detailed reporting allows you to better communicate and collaborate with the search firm.
Cross-selling ancillary services is a huge priority for many large firms, so much so that partners at these firms are as concerned with cross-sales as with the search itself, and their attention is diverted from what you contracted them for in the first place. Conversely, boutique search firms are, by and large, strictly focused on retained executive search. Rather than diversifying into other services such as candidate assessment, boutique firms will often refer their clients to specialists, ensuring they remain focused on the task at hand.
According to Robert Stein, in his book Pipeline Talent: An Evolution in Executive Search, search completion rates at boutique firms can be as high as 99 percent, while many large firms are closer to 65 percent. When meeting with a search firm, ask what their completion rate is. You are likely to see that larger firms — which, by virtue of their size, can afford to leave a search unfulfilled — don’t have as strong a record of bringing candidates across the finish line as their boutique counterparts.
The constraints on large executive search firms are real; they limit the firms’ ability to bring great candidates to you and contribute value to your organization. When selecting a firm for your search, critically assess the quality of service you will receive, instead of simply picking the largest firm on the market. Remember, bigger isn’t better; better is better.
For more information on this topic, or to learn how Baker Tilly staffing specialists can help, contact our team.