This article was published in the Career & Employment Guide 2020, our special annual publication focused on the labour market, human resources and education.
Most top managers and HR professionals, as well as business families and their companies, know that strategic executive search and leadership advisory services are typically employed to fill key management and specialised positions. And yet many assign a task of finding suitable candidates to recruitment agencies. One of the reasons is that most recruitment agencies include the term executive search in the portfolio of their services.
It may seem that the difference between a recruitment agency and executive search and leadership consulting is just a matter of how and how much a client will pay for the service. While the recruitment agency is entitled to remuneration only after a candidate recommended by it is hired, the client pays part of the remuneration for the executive search and advisory services before and during the search for suitable candidates. But how does it work in real life?
With success fee only payment, the recruitment agency has no assurance that it will receive any remuneration for its services. The success rate depends to a large extent on factors beyond the control of the agency.
Recruitment agencies thus cannot afford to deploy as much drive as it is in the case of the executive search and leadership consulting approach and devote the necessary energy to a client’s project to fill a managerial position.
It is often the case that several recruitment agencies are tasked to fill the same position simultaneously. This creates an environment in which the same ‘active’ candidates are usually addressed, who put themselves in the sight of the agencies and send out their resumes to them or publish their resumes on job websites.
Each agency wants to be the first to deliver a candidate the fastest to their client. This is the fault of contractors, which in most cases entrust several agencies with the same request instead of establishing a long-term relationship with a reliable partner. Recruitment agencies thus have no room to focus on quality of presented candidates. Good enough will do.
This approach cannot cover the source of suitable, talented but ‘passive’ candidates who are successful in their jobs, often abroad, but do not present their resumes online or send them to recruitment agencies. Since the agency primarily draws candidates out of its database but also makes use of advertising, the chances of recommending the best candidate on the market are reduced. In addition, agency staff is often young and inexperienced. Many real-life cases have proven that it was, at least, an uneasy occurrence for experienced managers to meet such workers. This can also negatively affect the reputation of an employer who has assigned such agencies the task of filling a managerial position.
Executive Search & Leadership Consulting
Unlike a recruitment agency, a consultancy providing executive search and leadership advisory services establishes a long-term consulting partnership with its client, which focuses on a strategy and process of selecting the best and most competent managers and experts.
Retaining such consultancy and paying them throughout the process guarantees high commitment of a consultant and their team made up of specialised consultants and researchers. The client has full control and the right to demand the best results.
The partner responsible for a given project defines the deadlines of the entire process and their team makes full use of the network of contacts and discreet information available to the professional consulting company. Without these essentials, quality market research is not possible. The main reason is that quality candidates usually do not actively seek change. Experienced professional consultants can find and recruit those who are successful.
As in other consulting partnerships, the experience, energy and resources a consulting company must put in a project require a payment guarantee. Only in this way can it afford to invest the time and effort in finding the best candidates.
Filling positions vs. tracking down talents
Recruitment agencies maintain tactical relationships with contractors. Professional executive search & leadership advisory consultants build strategic partnerships with clients – companies that emphasise quality solutions when working with them. A recruitment agency is a good solution when it comes to positions that require available and easier-to-replace candidates. Experience confirms that leaders obtained through an executive search and leadership consulting are much more likely to advance in their careers.
The question remains: If the remuneration of recruitment agencies is only slightly lower than the remuneration of companies providing executive search & leadership advisory services, why do some companies rather engage recruitment agencies than the other kind of consultancies described, which provide a solution of incomparably higher quality, when filling key management positions?
21. Jul 2020 at 7:00 | Martin Krekáč