18 Jan How Does an Executive Search Firm Work?
Misconceptions about how executive search firms work often cost organizations money.
Executive search firms are invaluable tools for companies with vacant leadership and specialist positions. Still, misunderstanding how they work prevents many organizations from taking advantage of their services.
This article will cover every new client’s basic questions when considering executive search: what are executive search firms, how do they work, and how are they different from in-house recruiters and general recruiting firms?
What Are Executive Search Firms?
Executive search firms are talent acquisition organizations that exclusively work with companies expanding their C-level team or seeking highly skilled niche candidates.
Executive search firms, also known as executive recruiters, invest heavily in building diverse networks of talented and exciting candidates across industries. These networks are then leveraged for the benefit of their clients, allowing executive search firms to make professional connections and executive placements that are generally out of reach for in-house recruiters.
Executive search firms’ immersion in the executive talent market uniquely positions their search specialists to identify, engage, and secure game-changing executives and specialists for clients.
How Does an Executive Search Firm Work?
Most people know executive search firms’ business model revolves around successfully placing high-level candidates in open roles at their clients’ organizations. But answering how executive search firms find candidates, evaluate executives, or earn money is a tall order for most individuals outside the industry.
Executive search firms’ primary asset is their network. Global networks of diverse candidates paired with access to top executives make it easier, quicker, and more affordable for executive search firms to sign competitive candidates compared to generalized recruiters or in-house HR departments.
How Do Executive Search Firms Make Money?
Executive search firms, like most recruiting firms, base their compensation on the contracted role’s first-year salary. Average fees range from 20-35%, which isn’t much higher than the average cost of adding entry-level, intermediate, and mid-management workers to your team (15-25%).
Contingency executive search firms require no upfront payment and only bill a client once one of their candidates has been successfully placed. While this low barrier to entry appears attractive at first glance, this fast-paced, high-volume business model can be a poor match for projects that call for niche experience, unique knowledge, or specialized skill sets. A contingency search firm may simply give up on your search if it proves too time-consuming or difficult-to-fill.
Retained executive search firms operate similarly to retained attorneys, accountants, or consultants. Retained executive search firms work closely with their clients to create customized executive talent acquisition strategies that align with the business’s needs, goals, and growth.
What Is the Difference Between Executive Search Recruitment and Normal Recruiting Strategies?
While executive search firms and traditional recruiters are technically in the same field, the differences between their candidate pools and clientele mean successful strategies aren’t often interchangeable. Both types of recruiting are useful under different circumstances, the key is knowing which type of recruiter is right for which role.
Recruiters’ heavy workloads and reliance on speed and volume have shaped their operations.
Recruiters prefer casting wide nets with tools like digital job boards and social media platforms like LinkedIn to generate large amounts of activity and interest in a role. Then, they use various techniques and methods, (many of them subjective), to narrow their roster of candidates.
Executive Search Strategies
Executive search strategies are typically more refined, precise, and data-driven than conventional recruiting tactics. This is because executive search specialists are typically seeking a very particular type of candidate to fill a leadership or specialized role.
Executive search firms’ mission to make C-level placements that revitalize, evolve, and elevate their clients’ organizations requires deep insights into the executive talent market and consistent access to a diverse global network of top-tier executives.
Executive search firms also tend to invest heavily in emerging technologies that empower their search specialists to make placement decisions that are objective, quantifiable, and, most importantly, consistently replicable.
Active vs. Passive Candidates: Executive Search’s Secret Weapon
Active candidates are individuals actively seeking a job. They’re reviewing job boards, attending networking events, and contacting recruiters to discuss potential opportunities that represent decent fits for their experience and skill set.
Passive candidates are individuals with the ideal skill set, experience, and abilities your organization is after but who aren’t typically looking for a new job.
Rather than simply waiting to see who applies from the active candidate market, executive search firms leverage their connections to access and engage exciting executives who are too busy making waves in your industry to consider taking on a new challenge.
Gaining access to passive candidates ensures your organization lands the best person for the role – not the best person for the position currently seeking a new job.
How Medallion Partners Helps With the Executive Search Process
Choosing an executive search partner can impact the success and direction of your business for years.
Contact us today if you’re considering working with an executive search firm to fill a crucial leadership role in your organization. Medallion Partners is revolutionizing the executive search process to provide our clients with unmatched access to the highest-performing executives and specialists in the world. With over 98 percent of our placements still in their roles after two years, our track record speaks for itself.