GETTING YOUR MONEY'S WORTH FROM AN

EXECUTIVE SEARCH FIRM

By Tom Davis, President, T-A-Davis & Associates, Inc.

Your general manager just gave two weeks notice.  Your board of directors has decided that your marketing program must change direction.  You have determined the need to change a key manager on your staff.  Quick.  What do you do?

Chances are, if you want an excellent fit for the position in any of these situations, you'll hire an executive search firm to find that uniquely talented and special person.  But which firm should you hire?  If you haven't been using a search firm on an ongoing basis, you probably will feel ill at ease.

Whether hiring an executive search firm for the first time or using one for the thousandth time, it's important to know that you're getting your money's worth.  How can you be sure to get value for your search fees, now and in the future?

Executive search firms offer several benefits to you as a client company.  They can act as an extension of your human resources department when you're overloaded.  They can find special candidates to fill critical positions.  They can provide valuable advice and consultation on human resource issues and the executive job market.  But the most important benefit a reputable firm provides is that when you need to place someone in an important position, they can save you time by providing a small, select group of the most qualified candidates with established references.

Selecting a search firm should be as important and deliberate as selecting your legal counsel or CPA firm.  In fact, their impact on your business may be more important and far reaching, as they are helping you build the future of your company.

What to look for when selecting an executive search firm

Selecting an executive search firm is often a subjective task that produces less than pleasing results.  If you select a firm on the recommendation of a colleague or other hit or miss methods, you can easily be disappointed.  A common complaint is that there is no way of telling how good the firms will be before trying them out, which can be a frustrating, expensive experience.

The process of selecting a search firm should be much like that of selecting a new employee.  The first step is assessing the needs of your company.

Several questions must be addressed.  Is this a unique one-time search, or will you be making similar changes at other properties?  If you are looking for general managers for three different properties, are your needs the same for each, or do you require a different kind of person for each property?  These questions will help you decide whether to give out the assignments one at a time or negotiate a package deal for all your search needs.

When you are selecting a search firm another question to consider, is whether you would prefer a specialist or a generalist firm.  Specialists know your particular field or industry inside and out.  They keep track of it on a daily basis and know how the industry works and who the top candidates are in every area.  Generalists, on the other hand, cover a variety of fields and use their expertise in seeking out individuals who appear to meet the client's stated requirements.

An important item to note is that executive search firms are considerably different from employment agencies.  While employment agencies receive employment requests, they seek to place the individuals that have tendered resumes to them and attempt to match these individuals with whatever openings they receive.  Search firms specialize in locating and screening the best candidates for the client using carefully developed networking and other techniques.  It is not unusual for a search firm to conduct a nationwide search in order to quickly find the right person for the client.  These firms also discreetly approach highly qualified employed individuals to promote the opportunity on which they are working.

Unfortunately, the quality and ethics of executive search firms varies widely, just as occurs with individuals you might interview for any job opening.  Many highly reputable firms conduct extensive searches to earn their fees.  On the other end of the spectrum are less professional firms that conduct a "search" of their resume files and haphazardly call a few contacts for possible leads.  The truly professional firms have developed systematic, efficient, and highly skilled methods of developing leads rapidly and paring down the list to a small group of the most qualified candidates available.

Many companies receive calls from less professional recruiters who are "speculating" candidates without any knowledge of the company or of an open position within the company.  The sad truth is that this tactic sometimes works for the recruiter.  On occasion, the speculated candidate will be hired.  This is not executive search.  Unless there has been a close working relationship with you, the client, no reputable search firm would presume to know your needs, problems, or who might be a "perfect" candidate.

The purpose of a professional search firm is to help find the people upon whom the future of the company will be built.  Can you imagine such talented managers allowing themselves to be speculated at random by a recruiter whose only interest is in making a quick buck?

Finding the highly reputable firms may take a little digging, but is well worth the effort.  You can develop a list of prospects by discussing your needs with others in your field who can recommend firms they know or have actually used.  You can also contact trade associations in your industry.

Once you have spoken to several recommended firms, you should determine who best meets your specific needs and will likely provide the responsive service you deserve.  This decision often comes down to personal chemistry with the person handling your account.  If he or she seem to thoroughly understand your company and your assignments, if they indicate knowledge of your industry and a desire to conduct a comprehensive search, and if they check out as being part of an established, professional firm, chances are you'll make a good team in filling your company's executive positions.

Look for integrity as you screen each firm.  A search firm with integrity will align its purpose with your company's goals.  It is committed to helping you get what you want, and will work on the search, continually refining the parameters, until you are confident in making a hiring decision.  It will also give you all the facts about a candidate, including the negatives.  And will stand behind its work.  This is important, so be sure to check their references. Are there plenty of references?  Are the references leaders in the industry?

Call some of the references and ask questions such as:  How many searches did the search firm do for you?  Were candidates well screened and were their stated qualifications accurate?  Have any placed individuals failed to work out?  Has the firm ever hired away someone they had placed with you originally?  How satisfied are you with the search firm?

How to guide the firm to fulfill your needs

After you've hired an executive search firm, the job becomes a team approach with you leading the effort.  If you're just starting out using the firm for the first time, educating them about your company and your corporate culture is very important.  If the firm is not a specialist, you will probably have to acquaint them with your industry as well.

There are several reasons why you might prefer a firm that specializes in the hospitality industry. For long-term effectiveness, most companies find it beneficial to establish an ongoing relationship with their search firm so that the firm thoroughly knows and understands the company.  This enables the firm to find candidates that fit in with the company as well as meet the skill requirements of the position.

As with any new relationship there is a learning curve that flattens out over time.  Investing your time in one firm who already knows your industry saves you time and produces results faster.  An ongoing relationship builds more understanding and multiplies the effectiveness of the recruiting effort.  There is no more important decision faced by a company than who to put into a key position.  More time invested in educating your recruiter will save time you waste interviewing the wrong candidates.  For example, one of our clients went so far as to request that we spend two weeks in their offices and traveling with their key executives to learn enough about them to screen candidates for a senior position.

Seeing how the position fits in with the rest of your company is important and helps the search firm work with you in developing a detailed position profile, the first step in a search.  Similar to a job description, a position profile highlights the major responsibilities of the position, yet establishes the most critical criteria of the search.  In other words, the profile prioritizes the needs of the organization for the position.  These needs sometimes are qualities such as assertiveness or entrepreneurial spirit, as well as job responsibilities and the scope of accomplishments expected.

The importance of the position profile cannot be overstated.  It sets the direction of the entire search.  It is much like developing a road map to plan a trip.  The road map tells you where you are going, how you are going to get there, and what to look for to tell if you are getting close to your destination.

Once the position profile is established, the search firm accelerates into a comprehensive search, which you should carefully monitor, especially at the beginning.  Any misunderstandings or course adjustments should be made early to keep the search on track.

With a good position profile you can review how well the candidates fit the profile. You may decide to modify what you want or to give more specific direction to the recruiter.  The profile, like the road map, is an outline that keeps everyone going down the same road.  Changes in the plan are easily made as long as everyone gets the same new road map.

Maintaining contact between you and the search firm not only maintains accuracy and efficiency, it provides updates to you and top management of your company to allow strategic planning related to the position.  Good communication and updates from the search firm can be a strong indication that you've hired concerned and dependable professionals.

Ten check points on whether you're getting your money's worth

1.     Does the firm have a comprehensive search methodology?

2.    Can the search firm supply an impressive list of people who can function as references for the work the firm has done for its clients?

3.    Do you feel that you can trust the recruiter to be honest, maintain confidences, and tell you the good and bad on each candidate?

4.    Does the search firm pre-screen candidates, check qualifications, and provide in-depth references?

5.    Do you get a few great candidates who each fit your position 

        profile?

6.    Do the candidates you talk to understand the position and show enthusiasm for the opportunity with your company?

7.    Does the recruiter keep you informed of his or her progress.

8.    Does the recruiter seem to have your best interests at heart? 

9.    Does the recruiter learn from the feedback you provide and modify the type of candidates being presented?

10.   Does the recruiter continue to work with you even after it becomes obvious that the search will take some time?

The search is worth the effort.

Careful selection and direction of an executive search firm can provide phenomenal results.  By providing you with the best candidates, a good executive search firm helps you assemble the management team that will build your company's future.  The initial task of finding a good firm to meet your needs is well worth the effort, just as it is in finding the right person for an executive position.

It's a good idea to select a search firm now even if you don't have any current assignments for them.  You're right, you don't have time.  But you will have even less time to make an intelligent choice when faced with management turnover.