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A Planned Alternative to Random Recruiting

By Sibyl Masquelier
Executive Resource Group, Inc. Copyrighted 1985 Updated 1996

While every company executive will list the hiring of people among the critical priorities, few will use any technique other than traditional, random methods to identify the key professionals and managers they choose to hire. Media advertising, networking and employment agencies are the three methods most used to source potential new hires. While these techniques can work in certain circumstances, each is basically a random process relying on who happens to be: available and willing to come forward, at a particular point in time. All these essentially miss the universe of individuals, often the most qualified, who are neither available nor looking to change jobs but if identified and contacted can be recruited. Search is an alternative to random sourcing methods. It is a planned interactive process that uses as its sourcing technique the methodical identification of every possible qualified individual, without regard to their interest in a job change, and then moves to recruit them.

Search, retained search, and executive search are the most common names for this comprehensive process. At its best, it is practiced by skilled professionals at consulting organizations called executive search or executive recruiting firms.

Search firms are consulting organizations that are paid on a retainer basis to recruit a certain type of individual for a company. This is contrasted with employment agencies, which are essentially sales organizations, who earn fees by placing individuals with a company.

Search firms are traditionally hired to recruit for high level management positions where confidentiality, professionalism and business acumen are necessary to recruit the best possible person.

Search in High Technology
In recent years, the strong seller's market in high technology recruiting coupled with the inability of traditional methods to deliver in certain critical areas, has prompted companies to began hiring search firms to recruit important individual contributors and specialized technical managers.

For example, virtually every company in the Internet field speaks of their urgent need for quality people. The better known companies say that they get thousands of resumes from their advertising, networks of associations and employment agencies. But, because they are extremely selective about whom they hire, they spend a great deal of time interviewing, but hire very few people. Using search to recruit for their most critical needs dramatically increases the probability of finding and hiring the people they want. With their search firm working as their representative, these companies will be actively involved in going directly to and recruiting the most qualified individuals rather than waiting for those individuals to come to them.

More typically, companies say that they have been looking, through traditional sources, for a year or more, for a particular technical specialist or manager; but they have not been able to come up with anyone qualified or if they have, their offers of employment were rejected.

Both cases are clear and quite common illustrations that employment in technology is a seller's market. The more complex the technology, the more difficult the problem of identifying and recruiting people becomes.

Research is the Key
The retained search process involves itself with every aspect of recruiting, from framing the position description through negotiation of the offer and acceptance. However, the engine of the process that makes it uniquely valuable and effective is a search firm's research capability, its ability to identify and reach that most qualified group of individuals who are not available or looking for another job.

The best search firms do not use media advertising to source candidates. They know that the "shotgun" approach will at best generate a volume response but little, if any, quality people. The time, money, and effort spent sorting through hundreds of resumes may create the illusion of progress but yield little of practical value. They know that their time, effort and the client's money are more productively spent in direct identification and recruiting of qualified individuals.

The most common objections to hiring a search firm are:

  1. Cost
  2. Possibility that, despite the money and time spent, the search may not result in a hire.
  3. Length of time it takes to complete the process.

1. Cost
The most prevalent search consultant charge is calculated at 30 percent of the successful candidate's estimated total first year's cash compensation. Total compensation usually includes both base and guaranteed or probable bonus. Other financial arrangements used by search consultants include: the flat fixed fee, fixed in advance; a retainer fee, established for a specified period and under certain circumstances; a time charge, sometimes with an agreed upon maximum. Typically, fees are billed in progress payments; normally one-third at the start of an assignment, a second third after a specified period of time and a final third at the conclusion of the assignment. Clearly, hiring a search consultant requires an initial investment in the search process before a final result is reached.

2. Possibility that, despite the money and time spent, the search may not result in a hire.
Eighty to eighty-five percent of searches result in a hire. When a company hires an individual through a search firm the usual guarantee period for reputable firms is one year. That is, if the individual hired is terminated for cause or quits during his first year of employment, the search will be re-done at no additional fee to the client. Of the fifteen or twenty percent of searches that do not result in a hire, three to five percent are due to the search firm's inability to find an acceptable candidate and fifteen to seventeen percent are due to the company's stopping the search because of internal or market considerations. Often a company will interview the best people in the industry and decide that their plans for a particular product or project need refining and decide not to hire anyone. In these cases, the company often considers the search process was successful, even though no hire was made.

3. Length of time it takes to complete the process.
There is no set period of time to complete a search. On average, it takes thirty (30) to sixty (60) days to gear up research and to complete the first round of recruiting. However, a competent, organized search firm should have the ability and flexibility to speed up the process, within reason, to accommodate a client's need.

On the other hand, there are searches that take a long time, (six months or more) to complete. This frequently occurs when a company has been trying, unsuccessfully, to fill a position through traditional sources for a year or more. Often the company will hire a search firm expecting to hire the first candidate presented whose background is close to their needs. If the search firm is competent, the client company will probably interview two or three qualified candidates on the first round. Typically, the client who hired the search firm out of frustration will often, now, at the sight of a number of qualified individuals, become highly exacting and selective about the quality of the person to be hired. This swing between the extremes of expectation and the time it takes to resolve itself often requires a protracted time to complete the search process.

A top search firm will recognize the client's need and, indeed, right to be exacting and continue the process, generating new candidates until the client is satisfied.

The long search best illustrates that search is a partnership. Both the client and the search consultant must understand their roles and responsibilities and commit the time and expertise necessary to make the joint effort a success.


Media Advertising
Classified and Display Advertising

  • Newspapers
  • Trade journals
  • Radio/television
  • Internet
  • Reaches a broad audience quickly
  • Low cost relative to number of persons reached
  • Works well for positions requiring generic skills
  • Can result in a quick hire
  • Quality and quantity of candidates who respond is random
  • Cost per hire can be high
  • Effectiveness decreases as technical complexity of position increases
  • No sustained recruiting interaction with candidates

Recruiting people who are known and/or asking them to talk to and recruit other people that they know. Strengths

  • No cost
  • Can work well where timing is not a factor
  • Generally produces a good skill and personality fit
  • Limited by circle(s) or associates of people in the network
  • Circles tend to close upon themselves
  • Random process relative to time, quality and quantity of candidates
  • Tends to produce homogeneity of personality and point of view in work group
  • Does not provide for choice, except by chance, among qualified individuals

Employment Agencies
Sales organizations that place individuals for a fee. Strengths

  • Can work quickly
  • Works well when skills required are generic and level of accomplishment is modest
  • Works best where there is a pool of available people
  • Cost per hire can be high
  • Agencies depend upon media advertising and networking as main source of candidates; quality and quantity of possible candidates is random
  • Candidate rather than company oriented
  • Emphasis on placing an individual to collect a fee, rather than identifying and recruiting the best possible person.

Retained Search
Consultants who are paid to work with a company to systematically identify and recruit individuals. Strengths

  • Methodical process
  • Can be managed and planned
  • More likely to result in hiring top quality individuals
  • Most effective where skill level and level of accomplishment is high
  • Company oriented
  • Provides competitive compensation information
  • Supplies vision of developing candidates
  • Expensive relative to cost per hire
  • Can take months to complete process and hire.
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