1st Executive Blog

13 Apr Executive Search and Recruitment – 6 Differentiators

There is a great deal of commentary around about the difference between Executive Search and Recruitment. While much of this is self-serving, the reality is that in essence, they both involve the recruitment of people to work for an organisation, particularly when the role is supported by a third party such as an agency or consultancy. However, most executives understand that there is a difference.


Six Differentiators

In our view, there are at least six differentiators between recruitment and Executive Search.

1. Retained vs Contingent

Contingent work is the lowest common denominator. It represents one organisation providing service to another without any promise of payment unless there is a successful outcome. In a competitive market, that may be acceptable to some but contingent work by recruitment firms tends to be mirrored by a lack of loyalty from hiring organisations. It is quite common for hiring organisations to provide a request to source candidates for a role to multiple recruitment companies, with the only payment going to the firm that provides the placed candidate. It is essentially, bad practice by recruiters that don’t have the confidence to back their own services which in turn promotes, arguably, unethical client behaviour. There is really nowhere else in the field of professional services when one organisation expects another to provide a service and not pay them for it. Imagine only paying an advertising agency if their advertisement, being one of three or four produced and aired at the same time, produce the highest response rate or imagine engaging three law firms and only paying the one that achieves the best financial outcome in a case. It just would not happen.

2. Generalist vs Specialist

This is often introduced as a differentiator however, we do not believe it is. It is usually only the principals in either a recruitment or Executive Search company that are likely to have deep industry knowledge. The problem with this is that it is unlikely that exceptional candidates will be placed from a parallel industry and the opportunity to bring new knowledge and ideas to the employer is lost. From time to time, highly specialised knowledge may be required, such as a specialised field of software development or some unusual engineering construction requirements for example. This provides an interesting dilemma in that a contingent recruiter from a specialist firm is unlikely to have depth of process (or time) that is required to find AND assess a highly specialised candidate. Conversely an executive search consultant will not hesitate to hire in specialist knowledge to identify the right candidates and then evaluate them thoroughly which is where they have an advantage in the next differentiator, Sourcing vs Selection

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3. Sourcing vs Selection

We have heard of hiring managers saying to contingent recruiters, “we don’t want you to just place an ad on a job board”. Such a hiring manager may be expressing an appreciation that Executive Search methodologies are a little different but is unwilling to pay and to make the commitment to exclusivity to an Executive Search firm, leaving the contingent recruiter in a very difficult position. A key part of the sales process for effective Executive Search companies is that they will clearly identify to the hiring manager that the ability to find candidates simply goes with the territory, and it is not that difficult. What is more difficult is the effective analysis and interpretation during the selection process that matches the right candidate with the role and helps educate the hiring manager as to why an in-depth appreciation of the candidate’s competencies needs to carry weight.

It is easier to confirm the workplace skills of the candidate than it is to assess the competencies required for them to be successful. Sometimes this involves consulting with the client to make sure that they are clear about the attributes that they really need in the role. Then it is about having the experience and the capacity to build a case for the successful candidate’s competencies in areas such as leadership, emotional intelligence, communication skills, resilience and strategic capability among many others. This means that, when asked if there is a different fee for a candidate referred by the employer, the answer should be “no” because the bulk of the work still needs to be completed.

4. Method vs Speed

Quite often, speed is seen as a key advantage by hiring or human resources managers in the recruitment process. To some extent this is driven by the contingent nature of the work, speed only helps the recruiter invoice a fee faster, it doesn’t necessarily produce the best outcome. By contrast, is often the case that Executive Search professionals can produce a superior outcome when they work exclusively on a general recruitment role. In most cases, they will be able to apply many of the selection disciplines that they have developed in hiring C Suite executives to other middle management or professional roles. It takes a little longer, but the cost of an incorrect hire is exponentially greater than a short-term cost of vacancy. Added to this is the fact that an Executive Search consultant is likely have at least 20 years’ experience and is more than capable of holding challenging and engaging conversations with people earning high six and seven figure salaries.

5. Insight vs Variety

It is quite common for generalist recruiters to present anywhere between five and ten CVs for a role. When driven by speed, this is almost inevitable. They have not put the work into establishing what the client really needs, perhaps even arguing the case with him or her, and then working to a tightly defined brief. An obvious outcome of this is that many placements in such an example will be ticked off against a list of skills. It is impossible for this approach to develop an insightful analysis as to why a particular candidate is best for the company culture, the company’s point in the business life-cycle or the unique stresses, limitations and barriers that may inhibit performance inside the organisation. It also increases the time investment required by the hiring manager.

6. Consultation vs Service

The sixth differentiator, Consultation vs Service, is not suggesting that recruiters do not provide good service. It is a comment on the nature of a master servant relationship in which the recruiter is simply doing the hiring or human resource manager’s bidding. A great Executive Search consultant will make a powerful case for a final candidate based on the insights that they have developed from both the candidate side and from the client during the process. The economic reality is that a contingent recruitment consultant, working multiple roles, with no guarantee of payment from any of them simply cannot apply the required amount of work even if they have the capability.

While Executive Search consultants inevitably charge more for their services than generalist recruitment firms, the risk of working without depth, only on the surface, and too quickly to avoid mistakes is something that enlightened hiring managers understand is unacceptable.

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