- Hiring mistakes are not entirely uncommon in the recruitment field. In the case of executive mis-hires, the costs can overwhelming.
- For giant companies, executive mis-hires may reach up to millions, including direct costs such as salaries and benefits and indirect costs such as a dip in employee morale and error in judgment.
- To avoid the consequence of executive mis-hires, companies turn to executive search firms.
- Executive search firms specialize in finding the top-class qualified candidates to fill up the most important positions in a company.
Business leaders are under immense pressure every day, making decisions that could make or break the company.
Among these major choices has something to do with the company’s survival – Who should be next in line?
It’s a tough call to make knowing that executives play an important role in an organization.
According to business leaders, senior executives account for a quarter of the company’s success or failure.
“They set the vision, the strategy, and the positioning on a global scale,” states Caroline Hodson, Marketing Director of Trend Micro. They act as ‘pilots’ and steer the organization towards a common purpose.
In this fast-changing technological era, executives are in charge of transformations that are designed to push the company ahead of its competition through effective communication, modeling business changes, creating a strong and talented team, and personally getting involved in the work process.
The Cost of Executive Hiring Mistakes is Rising
So much is at stake when choosing an executive. However, finding and retaining professionals with the highly sought-after skills that can lead the company to success is not a walk in the park.
In fact, from 2000 to 2013, a quarter of executives from the Fortune 500 were removed involuntarily and what used to be a 10% to 11% executive turnover rate in North America, turned into an average turnover rate of 14 percent as we entered the new millennium.
Related: Key Emerging Talent Acquisition Trends Making an Impact on Executive Search in 2022
According to Top Echelon, these frequent turnover rates can be a result of mis-hires. Translation: They weren’t fit for the job.
Hiring mistakes are not entirely uncommon in the recruitment field. In the case of executive mis-hires, the costs can overwhelmingly reach up to millions of dollars for giant companies.
The only difference is that the cost of a poor recruit has increased over the past years. With businesses facing greater financial constraints in the aftermath of the pandemic, the stakes are higher when it comes to investing in a new hire, especially for executives.
Research from global staffing firm Robert Half shows that 64% or two in three hiring decision makers say that the negative impact of hiring mistakes is more severe than it was in 2021. Poor recruitment practices can affect businesses in terms of:
- Time is wasted in hiring and training the new employee (33%)
- Team morale and productivity decrease (27%)
- The stress levels of supervisors increase (20%)
Some of these damages can also be in the form of direct costs, such as salary and bonuses, health insurance, travel, and office expenses, and indirect costs such as poor business judgments, faulty strategies, execution failure, lack of direction, and loss of trust.
Asking for Help Will Equate to a Successful Executive Hire
Hence, companies turn to executive search firms to take advantage of their expertise in recruitment to fill up the important position of an executive.
Companies, however, can have varying experiences with search firms depending on how experienced the firm is.
Obviously, not all executive search firms are created equal. In fact, according to Kevin Sheridan “86% of executive search firms feel they are doing a good job recruiting, yet only 60 percent of candidates report having a positive experience during the recruiting process with them.”
It’s easy to be overwhelmed by the different search firms available in the market, so here are the qualities you should be looking for in your choice of an executive search firm.
Related: How to Attract and Retain Executive Talent in 2022
What Qualities Make a Great Executive Search Firm?
Executive positions take time to fill because top talents are usually already working for a company. They’re already well established making it a challenge to convince them to move, or it can also be that the executive position has a small pool of candidates to choose from.
Executive search firms are brought in for these tough searches to acquire these qualified candidates by means of poaching or by making use of their specialized network.
Historically, executive recruiters’ role used to be limited to “guardians of introductions”, meaning they are only in charge of introducing the candidate and the client to each other – their value heavily relied on their database.
But since the dawn of LinkedIn, a time when people can post their experience, accomplishments, contact information, and skills online, the role of executive search firms has shifted since their job description now requires more versatility. No longer are they limited to being the “guardians of introductions”.
An executive search firm’s value does not rely on one simple element anymore. Now, the best executive search firms have to show strengths in different areas, and we are going to be discussing some of the qualities that the best executive search firms have in common.
1. They must have great communication and listening skills.
Though it may be true that people can now post their resumes online, the top-level executives are a dime dozen that refuse to join the trend. They’re not exactly fond of submitting resumes to job boards and websites. Aside from Linkedin or networking, one of the few ways to seek them out is through plenty of hard calls.
Hence, when choosing an executive search firm, it becomes necessary that your choice of firm knows how to communicate well. An executive search, at its very first and last stages, involves lots of talking and sincere listening.
As the client, you have to relay the job specifications for the available executive position. If the firm has great communication skills, they can ask the right questions and truly listen to your response, to be able to have a strong grasp of what you want and expect from the partnership.
Since a big chunk of an executive search firm’s obligation is spent on conversation, usually by having to answer and make calls, the search firm of your choice has to be able to maintain a high level of enthusiasm to answer any inquiries that you have – from the very first call, on the day of the first meeting, up to the point of placement.
When interacting with their clients and potential candidates, the best search firms can communicate in a way that they are able to build rapport. They can do this through follow-ups to search for honest answers and suggestions that can help with the recruitment to develop a more effective search plan for their client.
2. They must know the market and can find talents from all over the world.
As we’ve mentioned before, top-tier executives are not easily found on online job boards – they’re a hard bunch to find. But the best executive search firms can find them for you by having the capability to do wide geographic searches.
They also know the marketplace better than their clients. They’re in the loop of unheard-of places wherein qualified candidates can be found, and can cater to clients from across the globe who are planning to start a business in an offshore country and need executives who are going to run their business for them.
They can locate local talents from that offshore country by making use of their huge databases of various industries, sometimes in different specializations such as IT, engineering, HR, and finance.
3. They must work with speed and urgency.
Top talents are in demand and companies want them for themselves. Executive-level candidates receive job offers every year, and in recruitment terms, these other offers mean competition for the executive search firm.
The best executive search firms are aware of this tight competition and understand that top talent has no need to look for job opportunities when the jobs themselves are the ones being presented to them. The timeframe when executive-level candidates can be persuaded to move to the company of the executive search firm’s clients is limited.
Also, the less time that the search goes on, the fewer recruitment costs for the client. Having a speedy and focused sense of urgency, but still delivering quality results by producing relevant candidate information and well-researched profiles under 24-48 hours of calibration, can keep the client ahead of its competition.
4. They must have great relationship-building skills.
Since they are usually the ones who make the first contact with the candidate, your choice of executive search firm has to be able to represent you in a positive way, so that the candidate is going to be encouraged to make a move to your company.
They have to be great at relationship building. It’s their job to introduce candidates and clients, and they have better chances of success if they are able to develop a relationship between the two.
The search for executives can be a long and hard process. It’s riddled with risks, and sometimes dire consequences for the company.
For giant companies, executive mis-hires may reach up to millions including direct costs such as salaries and benefits, and indirect costs such as a dip in employee morale and error in judgment. And to avoid the consequence of executive mis-hires, companies turn to executive search firms.
Executive search firms specialize in finding the top-class qualified candidates to fill up the most important positions in a company. Ideally, they are meant to make the search process considerably much more cost-efficient for their clients.
But the marketplace is not perfect. Executive search firms perform differently and the best ones share common qualities such as great communication and listening skills, have impressive headhunters, able to work with speed and urgency, in possession of huge database, capable of giving consultation services, and builds relationship where it matters.
Did we miss other qualities that the best search firms have in common? Does your executive search firm of choice display any of these mentioned qualities? Share your thoughts and leave a comment down below!
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