Choosing a Retained Search Firm

It's a critical decision with long-term implications.

A retained search firm is generally recognized as your optimum resource whenever you need to identify and recruit outstanding executive talent. That's because retained search is a highly focused, precision recruiting solution when properly applied.

However, not all retained search firms are the same. In fact, some retained search firms are little more than contingency search firms working out of an existing candidate data base. Unfortunately, whenever this is the case, the search process will be short-circuited, and the search results will definitely suffer.

When you need a precision solution, when outstanding executive talent is a requirement, and when you need to "get it right" the first time, a bone fide retained executive search is your optimum recruiting solution.

Here are "8-Questions" that will help you identify a retained executive search firm that is Thorough in their process, Successful in previous engagements, and Trustworthy in terms of their people, their commitments, and their ability to deliver the best possible results.

1. What is the retained search firm's process?

It is important for you to know the retained search firm's process for understanding your needs and how they will manage the recruiting process. Does the retained search firm have a thorough understanding of your industry, your companies place among competitors and industry drivers? Additionally, does the retained search firm invest time in order to thoroughly understand and assess your organization's specific functional, operational and leadership needs relative to the industry and the company's strategic objectives.

In order to understand the retained search firm's process, we suggest that you ask specific questions to find out how the retained search firm will identify and recruit potential candidates. Will the firm rely on a database or will the firm's team actively recruit new targeted individuals for your leadership role? Do the partners personally know and have direct access to the industry's centers of influence and can they leverage existing relationships to identify and connect with proven players? How long will it take the retained search firm to generate the target list for your search? Find out if there are specific companies that are "off limits" to your search firm, meaning the search firm can not recruit individuals out of those specific companies. Retained search firms expect to discuss what targets they will avoid due to off-limits.

2. What is the retained search firm's process from initiating the search through completion?

Determine whether the retained search firm has completed similar searches to ensure a clear understanding of the role, the market and the challenges that will be encountered in the process. Be cautious of retained search firms that make promises to deliver is an unusually short period of time. While time is of the essence you want to make sure that you are hiring the leader capable of executing and "fitting" both today and in the foreseeable future. The industry average from search inception to candidate interviews is 90-100 days. You should have a specific understanding of what will happen if the retained search firm does not deliver in the time frame set forth or if a chosen candidate leaves within several months of accepting the new position. Additional search process metrics to question to aid in selecting your retained search firm:

• What is the average time to completion?
• What percentage of searches does the retained search firm actually complete?
• What percent of searches are completed with external candidates versus internal candidates?
• What is the retained search firm's retention rate or stick-rate during the successful candidate's first twelve months in the role?

3. Who within the retained search firm will be responsible for conducting and leading your search?

You need to be confident that your retained search firm is putting their best people on your project and that your search is of high priority. A few questions to ask in assessing the level of staff you will have assigned to your search as well as the service you may expect to receive from the retained search firm. Will the person who sold you the search be the person conducting the search? How many other searches are being conducted simultaneously to your search? What are recently completed searches in your industry and sub-segment of the industry? What is the level and style of communication you can expect to receive throughout the process from the retained search firm?

4. Will the retained search firm be a credible ambassador for your organization?

The retained search firm you select to conduct your search is a direct reflection of your company. Spend time with the principal(s) of the retained search firm to gain an understanding of their industry and sector knowledge, how they are perceived in the community and industry as well as their level of professionalism in regards to how others will view you and your business through them.

5. How will the retained search firm be involved to ensure candidate retention?

Retention rates are highest when the retained search firm maintains communication and overall continuity with both the client as well as the successful candidate during integration. Additionally, it is equally important for the retained search firm's partner to stay connected through the hired executive to his or her family as they too transition.

6. Who will the retained search firm provide as a reference?

Ask for two to three client references from the retained search firms you are considering or the one you are selecting. You may also consider speaking with candidate references to hear a different perspective on the retained search firm's process.

• How did the retained search firm approach you and what is your impression of the person who contacted you?
• Did the retained search firm keep you updated throughout the process and did they set clear expectations?
• Was the firm able to clearly communicate the position and the organization that they were representing?
• Were the members of the firm both accurate and thorough in their questioning to ensure cultural and functional alignment to their client?
• Was the retained search firm respectful of your time?
• What level of priority did you feel was given to you and the client from the retained search firm?

7. What quality standards does the retained search firm have in place?

It is very important to understand the track record of a retained search firm and their operational metrics. The partner should be able to clearly articulate the firm's operational metrics and quality delivered to each client. Progress timelines from the points of initiating your search to candidate interviews to completion, percentage of annual revenues generated from repeat business and candidate retention or stick-rate for a defined time period are common questions to ask when selecting your retained search firm.

8. What is the difference between retained search firms and contingency search firms?

Companies and equity-sponsors that work with retained search firms are exclusively working in partnership to conduct a search for a specific leadership, strategic / advisory or functional leader. The retained firm will work as an exclusive advisor to and consultant to the client. Through a highly selective approach, retained search firms confidentially network and directly contact corporate and business leaders the firm knows, has connections with and believes to align directly with their client's opportunity. Retained search firms seek current business leaders with a strong track-record of performance and current success in leading people and strategic outcomes. Retained search firms invest several hours talking with and meeting personally with the identified leader, conducting direct and third party references and interacting with the trailing spouse, prior to presenting him or her to the firm's client, to best ensure strategic, functional and cultural alignment.

Contingency search firms are one of several possible headhunters used by a company to fill a position. The fee is contingent on the successful placement of the candidate; therefore, contingent firms represent the individuals seeking placement. Contingency firms do little background or "workup" on a candidate. Instead, they tend to forward resumes on to the client to filter. A candidate's resume may be "floated" to several companies simultaneously, so client companies compete for talent. Additionally, several contingent firms may present the same person's resume to their client, therefore causing confusion and payment pressure to the client based on who first submitted the individual.