Executive Hiring

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Recruiting can be hard at the best of times. But bringing someone senior into your business can add another layer of complexity to the whole process--often unnecessarily.


Simply because there’s usually an ‘air of mystery’ associated with Executive Recruitment conjuring up images of secret meetings in lobbies of 5-star hotels; search processes akin to private investigators working for the CIA; and course the massive fees that accompany a typical search process – often as high as 35% of the candidate’s salary or flat fees of in excess $US50K.

Executive search (sometimes referred to as ‘headhunting’) is a specialized recruitment service used to source candidates for senior, executive or other highly specialized positions within an organization.

Depending on who you ask, the minimum base salary of a candidate to be sourced via a true executive recruiter will usually be $150K – although some head hunters will take on briefs for lower salaries if the role is in a specific niche.

However, you don’t necessarily need to engage an executive recruiter for a senior hire – especially if the position isn’t within a Fortune 500 company.

Executive recruiters will usually insist on charging a ‘retainer’ to engage their services. This means you will typically end up having to pay one third of the estimated placement fee (mentioned earlier) when you engage the search consultant (this amount is non-refundable); another third of the estimated placement fee when the consultant presents you with a shortlist of 4 or 5 suitable candidates (also non-refundable); and the final third of the placement fee charged when the position is filled or the candidate signs the contract (this instalment would be subject to the search firm’s placement guarantee).

This means if you are looking to bring on a Head of Marketing, or a CTO and you ‘fall for’ having to engage a true head hunter, assuming you are looking to pay a salary of around $120K, you could end up having to part with an excess of $20,000 (non-refundable) before you even interview any of the most suitable candidates.

Executive recruiters will tell you that the reason they are quoting you such high fees is that they are able to tap into the passive candidate market. This was certainly the case 10 years ago. But today you are actually able to source exactly the same candidates on your own (check out RecruitLoop’s sourcing guide to help with this: http://recruitloop.com/resources/recruitment-technology-guide).

If you don’t have the time, patience, or desire to run the recruitment process yourself, you can certainly engage an external recruiter who will not charge you a ‘retainer’, or a 35% fee based on the candidate’s salary.

You could either engage a contingent recruiter who will most likely charge closer to 15% - 20% of the candidate’s salary.

Whilst this amount may still seem pretty hefty, you will only pay a fee once you actually make the hire. You won’t be paying an engagement fee, or some ‘instalment’ at the shortlisting stage.

Or you could engage an independent recruiter who might bill you like an attorney or accountant – an hourly rate for the time they spend on your search. Even if they take 50 – 60 hours to find your CTO or Head of Marketing and charge $100 per hour for their work, you will end up saving a bucket load of money compared to going down the executive search route.

Rest assured there are plenty of contingent and independent recruiters out there more than capable of tapping into the passive candidate market and running a search even for a $200K candidate.

Sure they may decide to interview candidates in the lobby of a 5-star hotel; or they might be tapping into some of the most sophisticated sourcing tools available. But they may have simply decided not to badge themselves as a head hunter or Executive Recruiter.

You’ll still be in good hands. You just won’t have to take out a second mortgage to pay a traditional search fee.

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