Fees Many small and mid-sized firms think their choice for executive recruitment is either to do it alone or to pay some New York based firm to handle the assignment. We are a safe, affordable and efficient third choice. In our Fee Section on Professional Search, I said that most companies are overcharged by their recruiting vendor and I explained why. That is also true in the retained world, but for different reasons.
Bluntly put, you are paying too much for executive search because you are confusing pomposity for professionalism.Most executive search firms are designed to service large, Fortune 500 companies. They want to conduct national and international searches. If you are a local small or mid-sized firm interested in finding someone for an executive position from a related, local company, you may run into a problem. Here’s an example. Last year I received an assignment for a VP of Marketing from a $50,000,000/yr firm near Lancaster, PA. A big-name international recruiting firm had the assignment for 6 months. The client kept seeing candidates from Fortune 500 companies who had high compensation expectations and needed relocation. The recruiting firm seemed uninterested in exploring candidates from smaller companies and insisted that the client needed to pay a higher salary than originally budgeted. They also charged a $50,000 fee.
Here is what I told them – I said that within 45 miles of their facility there are 50 companies that are similar in size or slightly larger who have similar markets/products. Large recruiting firms with offices in New York, Singapore and London will not be aware of a $60,000,000 company in New Holland, PA that might employ a good prospect. Right Recruiting lives in the local market and knows the type of company where your candidate is currently working.
Our candidates, clients and referral network are people and companies just like you. Large firms won’t show you people from small and mid-sized local firms for two reasons. 1)You are small potatoes to a company with offices internationally. You might pay one large fee every 3-5 years. These firms want relationships with international firms that can support their international offices with multiple assignments. They think they are doing you a favor by taking your assignment. 2) The type of people that best match your needs work under the radar of large recruiting firms. Their core business is the Fortune 500 market so their database is full of Fortune 500 candidates. Candidly, they think that your pool of candidates is beneath them.
We received the above assignment and filled the job within 2 months at a $20,000 fee. Since then we have also filled 4 professional level jobs at the same company in other departments.
Our Fees are simple: 15% of projected first year salary with 1/3 of the fee paid up front as a retainer. That’s it.
Our Methods Filling executive and C-level jobs at companies from $20,000,000/yr. to $300,000,000/yr. is complicated. That is a diverse group of companies, each with it’s own organizational needs. For example, a CEO at a $30,000,000/yr company is basically also every VP. He wears every executive hat and is lucky if he has one other high-level manager on his executive team. On the other side, a CEO at a $300,000,000/yr. firm manages thousands of people in a much more complicated organization All executives are not interchangeable, even within an industry.
For the last 30 years, I have worked with executives and professional staff in this region and I have gotten a good perspective on local executive talent. Here are some of the things I’ve learned.
1)This may sound harsh but there are two types of executives, caretakers and leaders/managers. The first group is content with the status-quo and loves being the boss, no matter the outcome. The second group doesn’t feel successful unless they have created positive change. It’s hard to tell the two groups apart without background info on them and their companies. 2)Size matters in both directions. An executive in a small company has a fundamentally different job than in a large company. Scaling down, from a large company to a small company, can actually be harder than scaling up. The biggest mistake made at the executive level is to “over hire” for a C-level job. When you hire an executive you are actually hiring for two companies. The first, your company as it exists now. The second, your company as it will exist in 3-5 years. If you are at $40,000,000 now and hope to be $80,000,000 in 3 years, it can be disastrous to bring in an executive from a $500,000,000 firm, for example. I have done research that bears this out. 3)Not everything good or bad that happens on an executive’s watch is due to them. All executive resumes come with statistics about improved EBITDA and revenue growth. Having an objective understanding about how those numbers are achieved is critical. Once again, background is important. Sometimes an executive has simply been at the right place at the right time. Once every few decades the planets do, indeed, line up. 4)An industry match is not critical but there are certain traits that exist across certain industries that make transitioning from industry to industry harder or easier, depending on the situation. I’ve learned to look past the industry and analyze the specific situation to help my clients create the best candidate profile possible for them.
For an executive search, an understanding of the client situation is absolutely essential. What are the strengths and weaknesses of the current executive team? What do you want the company to look like in 1, 2 and 3 years? What changes need to be made and what cultural aspects do you want to keep? All of these questions need to be answered before the candidate identification process begins.
An effective profile development procedure is vital. High-level searches can bring in a lot of candidate “static”. Many people feel they are eminently qualified for any executive job. Once a person has gotten to a C-level job, they don’t like hearing “no”. They can and will make forceful presentations on their behalf. Without a rigorous candidate profile as a starting point, you can be diverted down an unproductive path. A recruiting firm familiar with the pitfalls of an undisciplined search, like Right Recruiting, can and should keep you on target.
We have a huge advantage over other firms when it comes to candidate selection. Please don’t forget our database consists of both executive and professional level staff. It’s the contacts and information gleaned from the professional staff that gives us an unvarnished view of executive performance. While maintaining the highest level of confidentiality, we can use our professional staff files to probe performance and insure the accuracy of an executive’s resume. How would you like to be the company that hires a CEO based upon an enviable record of top-line growth without knowing that the true hero, the VP of Sales, had quit 2 months earlier because he was tired of butting heads with the CEO, who unbeknownst to you, had no knowledge of marketing or sales strategies?
So far, here is our process: 1)Client company evaluation 2)Candidate profile preparation 3)Candidate identification 4)Candidate selection
At this point, we should have a final 3-4 people. The next phase can be very important. We want the person who best understands what the job is and what it is not. In other words, the person who wants to take it for the right reasons. We go back to the finalists and question them carefully about both their level of interest and the source of that interest. In other words, is there congruity between the candidate’s expectations around the job and the practical experience that he or she will have while doing the job? Earlier, I said that once people get to this career level, they don’t like to hear the word “no”. They also get competitive. I’ve run across people who just want to “win” the interview process and who have given little thought to actually doing the job well. This last part of the process is to insure that all parties are on the same page.
We understand the needs of all stakeholders. No matter whether you are an owner/founder seeking to bring in executive talent, a VC or equity firm seeking to install new management in an acquisition, a board member tasked with managing a search committee or just a local business that wants to grow, we can be an effective and efficient tool for you and help you navigate the pools and eddies of executive recruitment. We can help you get better. Please contact me with any questions. I have listed specifics on some of the executive search assignments we’ve filled in the “Our Jobs” section of the web site.
Lastly, for companies who have multiple needs, we make special arrangements on fees. For some info, please see the “Other Services” section of the web site.
RIGHT RECRUITING Water Tower Building, 6198 Butler Pike, Suite 120, Blue Bell, PA 19422 Tel: 215-641-9300 Fax: 215-641-9308 jeffzinser@rightrecruiting.com