Press Room

Should I Use a Search Firm?

Posted on June 01, 2005

By Paul Frankenberg

Last week as I had dinner with a prospective client. This CEO was telling me about his business and all of the recent changes. This publicly traded company had grown rapidly over the last few years, and the CEO was planning to review internal measures and assess current operations. The CEO indicated that his plan would require an additional senior level manager.

During our conversation the CEO asked, "Why should I use a search firm?" I decided to talk with him about specific circumstances in which he should engage a firm and based on his needs, what type of firm would fit best.

If this is a time-sensitive hire

The CEO commented that using a search firm requires time. He said that if he needed someone immediately, he would be prone to pull the trigger and get a "body" inside. This mistake is a common and costly one. Hiring the wrong person costs you more than doing it right the first time. Additionally, by the time you realize you have the wrong person and you then conduct a proper search, you may be several months or a year down the road. At this point, time pressures are greater and the time you have lost can be costly — in terms of training and the lack of efficiency and effectiveness brought to your organization by hiring "the wrong person".

If internal resources have been exhausted

When internal resources have been exhausted, and you still do not have the person you need, turning to a search firm is a good idea.

When the position is highly specialized

If your business situation requires specific skills, relying on internal resources may not be effective. Some search firms, those with experience in certain industries and/or types of positions, are more likely to be able to locate and recruit candidates with specialized skills.

Do I really need to engage a search firm?

The first question you need to answer is whether you should use your internal resources or engage a search firm. You should initially consider whether your internal resources have been designed to conduct a thorough search.

Looking through the newspaper and posting Internet ads is not recruiting. These passive options only offer you those people who want to change jobs. I suggest that the person you're looking for is someone who is a top performer in his or her current role and is not actively looking for employment. Contacting, recruiting and hiring an individual who is not actively searching proves to be the best long-term option. The non-lookers are the ones whom you can attract only by offering them a better opportunity, career advancement or an improved quality of life. If you can recruit someone under one of these situations, then your employee retention rate, if you can deliver what you promised, will be high. This recruiting method is not an easy one, but the easy method is not the best method.

Maintaining the proper resources requires consistent communication between managers to develop and implement a search methodology. The problem arises when internal departments are stretched too thin to cover current responsibilities while simultaneously conducting a time-intensive search. The lack of communication within an organization often leads hiring managers to go to a firm so that the search receives the time and attention it deserves. It is from this point, deciding to utilize a firm, that you must decide what type of search firm to use.

Three primary categories of search firms

- Generalist firms
- Firms focused on a specific industry
- Firms focused on a specific core skill sets across industries

Pros of each type of search firm

Generalist firms: With broad exposure, these firms attempt to understand the landscape of multiple industries.

Firms focused by industry: These firms spend their time and energy developing clients and recruiting candidates from one industry, ex: healthcare. These firms believe that they are able to understand one industry, in entirety, and therefore are best suited to work with a healthcare client to successfully complete any and all search assignments.

Firms focused on a specific skill set: These firms focus on helping clients in very targeted areas (finance, engineering, etc). These firms work to know high-quality individuals across major industries. This type of firm can work with only a few clients in each industry, offering clients a deep list of recruiting sources.

Cons of each search firm

Generalist: Lack depth of experience within any one industry or job function and potentially possess a limited universe of contacts within the industry and skill set that you are searching.

Firms focused by industry: Companies are either clients or candidate sources. The main sticking point is that your top competitors may be the search firm's best clients. If this is the case, you will either not receive candidates from these companies or your search firm recruits from their clients.

Firms focused on a specific skill set: You will need to develop contacts / relationships with more than one search firm to cover the searches across varying types of positions.

Next step - Gather more information

Recognizing that search firms can operate under different models allows you to ask probing questions to determine which firm is best suited to conduct and complete a successful search. Here are a few questions that I suggest asking:

- Does the person who sells the search actively participate or pass it off to a junior associate?
- Is this a credible search firm and will they represent our company well?
- What is the search firm's process?
- Will my search receive top priority status and, if so, what does that mean?
- What similar searches has the firm conducted within the last 18 to 24 months?
- What companies, within my industry, are off-limits to the firm?
- How long will the search process take, and what type of follow up will I receive throughout?
- Tell me about your service after the search has been completed.
- May I check your references?