Internal Executive Search

I have recently read a very interesting article on „The Benefits of Internal Executive Search and Why Now Is the Perfect Time to Make the Move

I wonder whether any Romanian company took this option into consideration.

If I had to “sell” this idea to a local company and I had to choose only 7 of the arguments listed in the article, I’d choose the ones quoted bellow:

The increase in “face time” between talent acquisition and the executive committee further increases the function’s ability to sell the vision of the organization and sustain operations when budgets get tight.

Recruiting for executives requires you to “sell” a large number of influential executives inside and outside your industry on the value of your firm. When you use external executive search, relationships “belong” to and are retained by the external search firm. However, if your own recruiters build these relationships and sell your firm effectively, it’s possible that a significant number of those candidates not hired will hold a more positive image of your firm, and as a result may consider becoming a customer or strategic partner with your firm. The benchmarking and candidate assessment work that is now done by your own recruiters might also yield competitive intelligence that can be used to benefit your firm. The dollar value of this benchmark information and potential sales and partnership opportunities need to be added to the positive ROI of an internal function.

Losing candidates you never see. External recruiters create an initial list of qualified candidates that you never see, and they do 100% of the “selling” to those on that initial list. Because you’re not involved in any aspect of this initial selling, you can never know whether you are losing great candidates because these external recruiters are doing a bad job selling.

“Bidding” for candidates is expensive. It’s only natural that large executive search firms “shop” top candidates to many different clients. This exposure to many potential clients allows their top candidates to be bid on, like highly valuable auction goods. This competitive process gives their candidates an opportunity to accept a much higher monetary offer, which simultaneously increases the search firm’s income. This means you will pay significantly more for candidates who are externally bid on. In contrast, passive candidates you directly source might only be interested in your firm, and may be up to 25% cheaper than high-demand executive-search candidates.

Avoid restrictions on candidate availability. Search firms often have agreements not to recruit from their clients. This might seem to be a benefit on the surface, but it also means that large executive search firms with many clients in an industry will have a smaller candidate pool to offer you because they can’t include employees from their current clients. Even though these individuals might be willing to change firms, you’ll never know it because no one will tell you about these restrictions.

Cost of recruiting. Some executive recruiting fees have been reduced during the recession but are still markedly higher than corporate recruiting cost per hire. If you hire a retained search firm, you pay even if they fail to fulfill the search. If you hire a contingent firm, you may pay more indirectly, in the time wasted by your managers sorting through mediocre resumes that contingent recruiters might send them in the hopes that one will “stick.”

New clients may occasionally get a preference. Firms that are desperate for attracting new clients may steer their very best candidates toward those clients with whom they hope to sign new contracts. If you’re a long-term client, you have to include that risk as part of the equation.

LE: new post by the same author: An Action Plan for Moving Executive Search Inside Corporations

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2 Comments

Filed under People Management

2 responses to “Internal Executive Search

  1. Steve Green

    With successful careers initially in Executive Search industry and the corporate arena, I have been a proponent of companies building internal, proactive search groups for all the reasons mentioned. However most large firms look at using third party recruiters, retainer or contingency, as a way of keeping their hands clean. In order to be effective an internal search group would have to have the flexibility to proactively recruit talent from any company including competitors and possibly clients. By paying a fee the company has always been able to say the candidate came to us, we did not recruit him/her thus avoiding conflicts and even lawsuits when one company feels like they have been “raided” by another.

    • HR Perspective

      As I used to work in Executive Search industry too, I found myself in the position of emphasizing the advantages of working with third party recruiters to my clients/potential clients.
      I am perfectly aware that there are pros and cons when it comes to bringing Executive Search capability in-house. I wanted to underline the pros the Romanian managers are more likely to take into consideration.

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