Why Companies Should Invest in a Retained Search Firm
There are countless job boards for finding new talent in today's marketplace. Although these postings may bring in numerous applicants, there is no guarantee of the quality of individuals it attracts. Often, companies are left spending hours screening candidates and still never find the perfect fit. Companies hiring an external executive fail 40% of the time to make a viable hire, according to a survey done by ESIX (Executive Search Information Exchange).
Cue the retained search firm.
This blog outlines how retained search firms are worth the investment because they provide the peace of mind, higher quality candidates, and long-term success needed when filling senior-level positions.
Retained search firms allow you to have peace of mind throughout each step of the search process. The firm will initially meet with you to ensure they understand what you are looking for in the next hire. The success of the search lies in the partnership between the firm and you. It is essential that you are transparent regarding what is desired in the position, problems that need to be solved, and behavioral characteristics that will fit with the company's vision and values.
“MMC’s search team, went above and beyond for our CFO placement. Their candidate pipeline, consistent communication, and intention for the candidate experience provided my team with an exceptional leader.”
- CEO, Local Non-Profit
This vulnerability will allow you to work together to prepare an accurate job description and align all stakeholders on the hire needed. The firm will then reciprocate the transparency by providing you with a clearly defined process and timeline. They will communicate with you throughout each step of the process so you stay updated and can rest assured they are on top of it.
Another great benefit is that retained search firms source higher-quality candidates. Firms can utilize their experience to screen through an extensive network of potential hires. Rather than waiting for individuals that are actively looking for a new job to apply, retained search firms are also approaching passive candidates that meet your needs. This is essential, considering executives do not typically search job boards and apply for positions. Rather, they rely on their connections and reputation to persuade them to join an organization. Firms have a database of people at their fingertips; they can quickly match company needs with candidate characteristics. Firms can review candidates from an objective third-party perspective to select individuals that have the needed expertise and behavioral fit for the position without allowing unconscious biases to impact their decisions. This is no simple task as firms typically spend weeks identifying and pursuing target candidates. Once candidates are sourced, firms will spend additional weeks' worth of time qualifying candidates' technical and behavioral characteristics. This larger pooler of individuals, experience screening contenders, and time spent assessing interviewees all results in a higher caliber of candidates.
Retained search firms help safeguard your company against making a bad hire. This is critical considering the Undercover Recruiter estimates that bad executive hires cost about $240,000 in expenses after accounting for the costs associated with the hiring, pay, and retention. Let alone the other costs that can't be quantified, such as lost productivity, damaged reputation with clients, and decreased team motivation. These costs are significantly higher than the fees associated with a retained search firm. Top firms charge around 35% of the new hire's estimated first year compensation. This investment reduces the risk of falling into the bad hire expense trap. As the firm has a transparent partnership with you upfront, they can find an individual that both meets your specific needs and aligns with your company's mission and values. These individuals are likely to be happier in the position and stay with your company long-term. To top it all off, some firms also offer a guarantee of their search success and/or new hire's retention. When comparing the search fee to the costs of a bad hire, the search fee offers savings in the end.
There are always pressures when trying to hire an open position, which are especially heightened when it's a senior-level position. Thankfully, retained search firms can help alleviate these pressures. Although there is an investment in using a firm, it greatly outweighs the costs of making a bad hiring decision. By outsourcing to the experts, you are giving yourself peace of mind, time savings on finding quality candidates, and guarantee of a successful hire. If your team does not have the internal capacity, put the search into the hands of a well-qualified retained search firm.
Once you have decided a retained search firm is the route to go, here are three tips to selecting the right firm:
1. Choose Retained Search Firms
Use firms that only do retained searches versus contingent fee recruiters that may dabble in retained searches. The process and whole firm structure for a contingent fee search is vastly different than for a retained search. Accordingly, if a contingent fee search firm does one-off retained searches, the searches are inevitably diluted by the remaining operations of the firm.
2. Check References
Check the firm’s references. You want to choose a firm that aligns with your company’s values and mission. One way you can achieve this is by asking for case studies or former client’s contact information to learn more about how the firm operates.
3. Be sure you trust your search team!
Trust and transparency are the keys for a successful search. Without trust, you may waste time and money to get a subpar result. By ensuring you have full trust in your firm, their process, and strategies, there is a higher chance of finding the perfect candidate.
MMC Consulting has been hiring leaders and helping them be successful for over 15 years. Differentiated by our sensitivity to Thrive Factor and exceptional record of success, most clients won’t make a hire without us. www.MMCmsp.com/retainedsearch