What Is The True Cost Of Choosing The Wrong Executive Recruiter?
Not all Executive Recruiters are the same. Without the right one, an already long process can be delayed significantly. But ultimately, the biggest risk of partnering with the wrong recruiter is that your search will fail outright.
The truth is choosing the wrong recruiter for a key hire is a huge contributor to the fact that our Executive Search Performance Benchmark Report shows roughly 30% of retained searches fail. And despite how it appears on the surface, failed searches result in deeper and more significant costs than many realize.
A failed search costs your company in three primary ways.
1. Lost search fees
If you choose the wrong firm and the project fails, you’ll lose the fees already paid at the beginning of the search. Because search fees typically run around 33% of the first year’s salary, this loss can be substantial. And this cost is what one typically thinks of, but there’s much more to consider.
2. Lost time
On average in the retained search industry, it takes 123 days—roughly 4 months—to successfully place a candidate. As I mentioned before, an average of almost 30%—or 3 out of every 10 searches—fail to end in a successful placement. Most often, these failed projects linger on for weeks or months beyond that 4-month average before a decision is made to terminate the search—at which point you need to start a new 4+ month search process all over again with another recruiter to fill your role.
As this illustration shows, if you choose the wrong recruiter and that search project ultimately ends in a failed placement, you’re risking adding many more months to the process. And if 30% of all searches end in failure, there’s nearly a 1 in 10 chance the search also fails the second time through the process!
All in all, it can easily result in your company being without a key role for up to a year or more. As you likely already know, having an important role open for so long is bad for your company.
3. Lost opportunity
Key hires are ‘key’ because they represent a big investment in your company’s future. In a highly competitive business environment, any amount of delay in filling key roles can make it harder to reach your business goals and stay on the leading edge of your business space. In reality, any added time taken to fill these roles can significantly affect your company’s ultimate trajectory and success.
We all know the quicker the best candidate is found and placed, the quicker they are doing their job, and the sooner they will be making an important impact on your business. Therefore, the most significant loss you face by choosing the wrong recruiter is a huge opportunity cost for your company.
Characteristics of the right—and wrong—recruiters
There are two primary characteristics of quality Executive Recruiters that you need to look for when determining who to work with.
The first is that they should specialize in searching for the specific sort of candidate you need. If you’re an AI company in the market for a CTO, for example, the recruiter you partner with should be the smartest and most informed person in the room when it comes to finding Chief Technology Officers operating in the artificial intelligence industry. As is true for any industry, the more you specialize, the more effective you are at that specialization.
Unfortunately, with the advent of platforms like LinkedIn, it allowed more and more recruiters to try to operate as generalists—with recruiters claiming they can find and place engineers just as effectively as they can find and place marketers. While technically possible, most recruiters can’t actually live up to that claim for key roles. Every type of search is fundamentally different, just as each industry, location, and level of seniority is different. From the example above, the right recruiter to find you the best available CTO in the AI space requires a unique understanding, expertise, and proven track record of successfully performing that type of search.
The second characteristic you need to look for when hiring an Executive Recruiter is that they have a set, proven search process. This process should be an established blueprint that informs how they approach and execute every search they perform. If they lack an established process, they’re more likely to approach the work with a haphazard trial-and-error approach, which is a fundamentally riskier means of engaging in a search. Recruiters that operate in this way are a large part of why an average 3 out of every 10 retained searches are canceled or terminated.
When hiring for a key role, ask yourself: how do we set ourselves up for success as quickly as possible?
The answer, ultimately, is vetting for those two fundamental characteristics when selecting the right Executive Recruiter as soon as the need is identified. The easiest, quickest, and most reliable way is to use our Find-A-Recruiter service. Our consultations are free for companies and we can provide multiple Executive Recruiters operating in your specific industry that have the above characteristics.