THE DEMAND for executive search services is increasing globally, said the Association of Executive Search Consultants, and Slovak firms active in the field have noticed the growth as well.
Just 20 years ago, the term executive search was virtually unheard of in Slovakia.
However, with the increasing number of foreign investors and fierce competition for talented professionals, executive search has become a developed industry.
Even though the last two quarters of 2007 saw a downturn in the US economy, year-end net revenue for the global executive search industry rose 22 percent from the fourth quarter of 2006 year-on-year, said the Association of Executive Search Consultants (AESC) on March 4. This growth represents four consecutive year of positive industry results, with compounded growth equalling 86 percent since 2004.
"The performance of the executive search industry over the past four years has been exceptional," Peter Felix, president of AESC said. "It reflects the tremendous need for executive talent that is being experienced around the world as the baby-boomers retire in western countries and major new markets such as China, India and Russia evolve into dynamic market economies. In spite of economic turbulence, we predict that organisations will continue to seek out the very best executives and that demand for executive search consulting services will remain high."
As well as the development of production in Slovakia, foreign direct investment and the import of foreign know-how into local plants, new knowledge has penetrated the human resources consultancy market, causing it to gradually adopt global standards and specialisations.
The increasing demand for executive search is connected with the current reality in industry and the labour market, which suffers from a lack of qualified labour and is experiencing a battle for talented professionals, the best managers, and specialists.
"Identifying and attracting key managers and specialists, as well as talented workers and those with high potential, has become a complex task requiring a professional approach and this is at the root of the increasing demand in Slovakia," said Miroslav Poliak, a partner at Menkyna and Partners Management Consulting.
The labour market in Slovakia offers many more job opportunities than before and it is now mainly employees who are choosing their employers, rather than the other way round.
"In such a situation, it is natural that when a company decides to change top managerial positions or is forced to make a change after its manager decides to leave, it uses the services of an executive search company," said Mariana Turanová, managing consultant with Target SK.
Executive search companies in Slovakia have recorded the highest demand for their services in dynamically developing industries with the most acute need for human capital, such as car production, electro-technical industries, IT, telecommuni-cations, finance, banking and the entire consultancy business.
There are also industries which recently decentralised from former monopolies, such as energy and utilities, which are now in need of new know-how from commercially-oriented sectors.
Whether a company hires head-hunters to find a new manager or specialist or decides to use its own powers depends on many factors, including the size of a company's HR department, its priorities, the availability of suitable candidates on the market, their budget, and the company's internal policies, executive search consultants said.
Companies usually look to hire in-house first, but sometimes it is necessary to look outside, said Turanová.
The companies turn to executive search consultants right from the beginning when looking to fill top managerial spots, hoping to get the most suitable candidate available on the market within a set time frame, added Poliak.
"But some companies first try to look for the candidates by themselves and order the search from external consultants only after exhausting their options," he said.
Turanová said that it is always better to cooperate with companies that have a clear recruitment strategy - for the executive search consultants as well for the companies themselves.
"They usually have one or two 'suppliers' and they know who is good for which area," she said. "They have set the terms of contracts in advance and when the situation comes that a new person is needed, they have a precise budget for the position and they know whether it allows them to use an agency or use their own resources."
To accomplish the search successfully, it is necessary to understand the company's needs, its culture, its values, and to get a detailed description of the position.
"We also need client feedback during the process and an assurance that we got correct information," said Turanová. "It means it cannot happen that the position defined as a sales director is in the end just the head of a sales group, or that the salary a candidate gets is in fact 20 percent lower than was presented to us."
To achieve success, it is also necessary to manage all the parts of the executive search process: briefing, original research, approaching candidates, the interview process, presentation of candidates, offer negotiation, and successful transitions, Poliak added.
"Success is not just about filling the position, but when a client [a company] and a candidate are satisfied," Poliak said. "When a client got a good employee who's effective in implementing company strategy and a candidate got a new challenge related to his ambitions."
Executive search is a specific method of finding candidates for senior managerial positions and specialists in which a consultant identifies and directly approaches suitable candidates.
It is different from the recruitment process for common positions and middle management, which uses only passive search methods, such as advertising.
"Executive search is used when it is difficult to find suitable candidates by common recruiting tools," said Poliak.
It requires a detailed knowledge of the market as well as a whole team of partners, consultants, and researchers, while simple recruiting is in most cases carried out by one consultant who doesn't need such long-term experience in the field.
"In the executive search, the candidates are usually employed, successful people who are not actively looking for new job opportunities," said Poliak. "On the contrary, in the recruiting process, the candidates are job seekers."
Therefore, an ideal executive search consultant has a detailed background in the business and knowledge of the industries for which he does the search and has gone through several managerial positions, Turanová said.
"In the executive search, the time and experience spent in a certain field are irreplaceable and they really pay off," she added.
An executive search consultant needs to be accepted by a company and by a candidate, who is usually a successful top manager or specialist, as an equal partner in negotiations, Poliak said.
"In developed countries, executive search consultants and partners are very experienced managers who are wrapping up their professional career and want to use their experience and vast networking in their field to advise others," he said.
12. May 2008 at 0:00 | Marta Ďurianová