The Business Transformation Network recently hosted an event, in partnership with Cielo Talent, on “Executive Search: Time for Change?” at 1 Lombard Street in London.
The event was attended by senior HR professionals and the conversation focused on the lack of evolution within the executive search space and what organisations can do to counter this for the future.
Despite the advancements we have faced in recent years, both professionally and socially, the executive search industry doesn’t seem to have changed the way they operate.
Although the majority of business areas have progressed, executive search still seems to function with most aspects staying as they have been previously, attendees highlighted some areas where this was glaringly obvious, discussing why they haven’t changed and what can be done to re-align them with changing business demands.
– Cost
The cost of executive search has always been notoriously high but with the exec search spend now being the same level allocated to the rest of an organisation’s recruitment budget in some cases, executive search is an enormous investment for organisations, which they don’t take lightly.
The ‘big five’ global headhunting firms (SHREK firms) represent 1/3 of total executive search spend and a common feeling of alliance from executive leaders continuing to trust these firms seems to stop progression in the space. Attendees discussed how executive search needs to develop a more innovative cost structure, potentially considering a delivery based pay model or upfront payments (like retainers), with payment in full upon completion, or after a probationary period. This change in pricing strategy could have an enormous impact on the way in which organisations use executive search firms, making it more accessible and reliable in the long-term. Boutique firms have stepped up their offerings by becoming more focused on deliverables.
– The search process
The search process can be long and costly, with little flexibility from both C-suite and the executive search team alike.
We are currently living in an age of instant gratification where the turnaround time needs to be a lot quicker than it ever has been before, so an average of 6 week turnaround time on receiving a shortlist, has become unacceptable, meaning something really needs to change.
Attendees discussed how the rigid and unadaptable nature of executive search and its procedures could be greatly hindering their efficiency. For executive search to thrive in modern business, it needs to become more flexible, which can be helped through embracing technological advancements within multiple steps of the process and improve relationship management with their existing candidate pool.
Having said this, the benefit to using executive search firms, particularly SHREK firms, is that as they are traditional, they will protect their rate, and can move a lot quicker as they are often already on organisation’s PSL’s, meaning that regardless of the way they work, many organisations still see the benefit. One of the most important parts behind a successful executive search process is knowing what you want to achieve and how you want to achieve it, so as much as it can be slightly rigid, there needs to be a clear process for identifying a client’s needs and then fulfilling this successfully.
Due to the nature of the roles handled by executive search, the hiring process is much longer as senior sign off is required, with candidates having to meet C-suite stakeholders, which can often take more time, making the ability to change the process harder than in general recruitment. Using executive search should make the process easier for organisations, ideally with a quick turnaround on a diverse list of candidates who would suit the role. This isn’t necessarily the case though, with many executive search firms using a pre-existing candidate pool repeatedly, causing a lack in diversity.
By using executive search, organisations are embracing the importance of having someone that will be held accountable for the process, to ensure it is efficient, however, the onus of providing a diverse list is often missed. For this to change, executive search needs to reassess their existing processes to change the route to improve diversity. What worked and was deemed effective 20 years ago, does not work in business today, so a change is required to ensure that executive search remains relevant.
– Transparency
The (lack of) transparency when using executive search is a matter of concern for a number of senior leaders, as the roles tend to be highly important or positions of influence. Therefore, trust between organisations and their executive search is integral for executive search to understand what is required of them and for organisations to believe that an executive search firm can deliver what they need in good time. The nature of executive search means that there is a reliance on executive search ‘knowing the best in the market already’, which can hamper the diversity of the candidate pool, therefore affecting the organisation in the long-term.
As the process is regularly outsourced, HR teams struggle with the fact that the outsourced hiring team don’t necessarily understand the organisation enough to sell it sufficiently.
Another key area attendees considered was how you could measure the success of a process that has been outsourced to an executive search firm. The debate on this progressed greatly from highlighting the merits and pitfalls of KPI’s, to the importance of accountability both internally and externally to ensure engagement and retention of candidates, as well as guaranteeing a level of responsibility for the process and its subsequent outcomes.
– Technological Advancements
Attendees discussed technological advancements in detail, looking at how they can make a difference to the way executive search is conducted, with platforms that allow video interviewing to qualify and activate candidates quicker, decreasing the time for a shortlist to be put together, therefore increasing efficiency in the long-term.
Although the human aspect is irreplaceable in people-based processes, like hiring and recruitment, technology can aid increased efficiency and a form of differentiation that doesn’t exist in executive search today. As the nature of executive search has changed from seniority focused to a more niche aspect driven recruitment, the need for personalisation has grown, making technology an straight forward answer to what seems to be a difficult problem at the moment.
Furthermore, technology can be useful for conducting research within a specific area as well as to assess both performance and engagement, which in turn can help organisations build effective long-term talent pipelines.
In short, the process behind executive search needs to change, with a lot of the change being with senior business stakeholders needing to understand that the big 5 aren’t always the answer to the executive search problem. It is no longer acceptable for standard practice to take 6 weeks minimum for an organisation to receive a shortlist for a role, the need to embrace technological advancements, like video interview platforms, can help bring executive search into the 21st century, whilst also speeding up the process. It was apparent that although Executive Search is still required, the proceedings behind it need to change to ensure it encourages diversity and potential based hiring for the future, instead of hiring explicitly for one position. Although it was openly acknowledged that executive search needs to change to ensure long-term success and survival, the willingness for exec search to change needs to match the organisations need for them to change and getting to this point could be difficult in what is deemed to be a space where the processes are proven and ‘a sure thing’.
Keep your eye out for more events like this at www.thebtn.tv/events
This event write-up is exclusive to The Business Transformation Network.
