EXECUTIVE SEARCH - CONTINGENCY vs. RETAINED

A Question of Value
Fees are about the same for contingency recruiters and retained search consultants. Is it the same service?

A Numbers Game
Contingency recruiters never know if they will make a placement. To ensure an income, they must work many assignments (5 - 10) at once, and work them as briefly as possible. A contingency recruiter makes only enough calls to submit the first 2 or 3 candidates he can find. He then hopes they fit. A retained search consultant knows he will complete each search and receive a fee. He accepts only those searches on which he can perform (2 -3 at once), and then can call all the candidates that might fit (50 -100 typically), and submit the 3 or 4 best people (not first). He will work 3 to 5 times harder for the same fee!

Exclusivity vs. Multiple Recruiters
Many employers find out the hard way that more isn’t better with contingency recruiters. They erroneously believe that giving the job order to several contingency recruiters will produce more candidates, more quickly. Instead, it reduces the quality of those candidates. Make a search non-exclusive, and it dives to lowest priority. The candidates submitted will be the easiest to find, not the best. Retained search is done exclusively - the search consultant you select will fill the position. The best candidates know the difference. They take retained search consultants more seriously. Having an expert who treats you as his number one priority, who is dedicated to in-depth recruitment, produces the high quality candidates you’d like to meet in the same time frame.

Real Search or File Search
Contingency recruiters maintain files of candidates who have contacted them, looking for a change. Not the best, but the most vocal candidates. This is their first, sometimes their only source to present from. Retained search firms have even more contacts, having made more calls on each search. These high-value contacts are used as a springboard, as referral sources to finding new candidates to fit a precise specification. The candidates found and screened on a retained search are happy, productive individuals who are not seeking job change, just the top performers you’d like to meet.

Quality Evaluation
Contingency recruiters don’t ask too many questions. The simpler the spec, the easier it is for them to persuade you to see a candidate who might fit. The shoehorn approach doesn’t work. It is critical to write a performance-based job description defining objectives, critical results, beliefs, values etc. so you can recognize the candidate who can do the job. Thorough evaluation means that only candidates already determined to be a fit are the ones you will meet.

When you decide to invest in executive search, make sure that your investment will pay off: Demand to see only pre-qualified top performers who are precisely what you want, who can produce results, and who can positively impact your bottom line. Retained search is your best value!

Job Offers – The Employer POV

There is an old lawyer’s axiom - Never ask a question you don’t already know the answer to. I think this saying also applies to employers extending job offers to management level candidates. I’ve seen too many clients extend offers before they know if the candidate will accept, only to get a turn-down.

Once the offer is extended, the power shifts to the candidate, and often, that is when negotiation begins. The negotiation should be done before the offer is extended. An employer should know whether the offer will be accepted, before they actually give the offer to the candidate. Here is what the employer should know before extending the offer:

• What other factors will influence acceptance? These could include: benefits, bonus, growth potential, relocation issues, spouse’s job, kids in high school, elderly parents, etc. Dispose of these issues before discussing money, and the money becomes easier to discuss.
• What are the non-monetary reasons the candidate wants to come to my company, and/or leave his/her current company?
• What are all the components of the candidate’s current compensation package? Which are important? [Some candidates don’t care about bonuses, and want a higher base; others want the opposite]
• What amount does the candidate want to work at my company?
• What is the minimum level at which the candidate will walk away?
• Would a sign-on bonus (one time payment) substitute for some salary (permanent cost)?

When an employer takes in all the factors and truly understands the candidate’s motivation, then a “test” offer can be given, accompanied by a “trial close.” “If we offered you X, would you accept?” If you get a response “I’d have to think about it”, then you have to discover all the things the candidate would be thinking about, until you get a "yes, I’d accept". Then the next day, you can extend the offer, and know that you’ll get a yes.

Empathy in Business

The word empathy was big in the news last month in connection to Sonia Sotomayor’s confirmation hearings. Some of the Senators made it sound like a bad word!

The concept of emotional intelligence has been a generally accepted business value for many years, and now a new book is out called Wired to Care. I haven’t read this yet, but I like the author’s main idea, that when people in an organization “develop a shared vibe for what’s going on in the world, they’re able to see new opportunities faster than their competitors.” They have a cool tool called the EMPATH-O-METER, that allows you to suggest and rate the empathy level of an employer.

My clients consistently ask for people who are collaborative, who work well in teams, lead teams, etc., yet most people are “wired” to be individual contributors, and our survival instincts work only partly towards teamwork. Increasing the consciousness about empathy is a good thing, and so is the word itself.

Employee Retention in Recession – Part II

My last post was about the importance of keeping your best people, especially in a recession. Today I’ll focus on what motivates an “A” player. These factors need to be in place in order for you to keep your top people loyal. “A” players are motivated to stay with you when they are:

• Inspired by your vision and leadership – make sure you articulate this clearly and stay positive in your communication.


• Impressed by your business plan – You do have one, right? A roadmap to success must be part of your plan.


• Part of a great team tackling a great challenge – an “A” player wants to be surrounded by other high quality teammates, who are operating at optimum performance.


• Believing in the company’s potential to succeed – would you bet on your chances? Your “A” players can calculate the odds too.


• In a stable, secure environment – have you been making people feel safe or not so safe in your comments about today’s situation?


• Able to make a difference, to count – because you have clearly spelled out their objectives and shown them how the achievement of those aligns with corporate goals.


• Have the right compensation – this is last on the list, because if the factors above are present, compensation becomes less important. The “right” compensation for a key manager includes incentives for their own performance objectives.

Take care of your people, mostly through excellent communication and the right attitude, and I believe they will stay loyal and take care of you!

Employee Retention in a Recession

Many employers are mistakenly feeling secure about their current workforce, under the possibly erroneous assumption that no one would dare leave now. There is in fact a real danger of losing great people within the next year.

Here’s my rationale. I’m assuming that any employer who has let people go has tried hard to keep the “A” players, and let go of only the poor performers. Now the “A”s are overworked, and possibly under-utilized or under-challenged. If your business is one of the many that have really taken a hit, your “A” players want out, and have probably felt that way for a while. Such people may be waiting out the recession, but many really have wanted to change jobs for over a year. The minute opportunities start to surface, those people could be gone.

And, there is pent up demand both ways: Employers have held off hiring, and there could be a rush for talent once the recovery begins. Companies that have any edge at all over your company will be trying to hire away your people.

It is really important not to be complacent about your key people even in tough times. Next week, I’ll write more about key retention tips.

Economy's Effect on Your Staffing?

Please take my Linked-In poll on how the economy has effected your staffing:
http://polls.linkedin.com/p/44173/fsppo

Job Hunting Tip #5: Explaining Job Changes

Many job seekers make the mistake of talking negatively about a previous employer, and it is very important to be positive on this topic. When I interview people, I ask them in several different ways to tell why they’d be interested in making a change: What is the ideal job for you? What’s missing at your current job? What needs to be different?

Most of the answers I get revolve around new challenges, a company that is positioned better for growth, the usual. BUT, almost every week, I get one or two people who absolutely tear down their current employer, telling me all the things wrong with the environment, why their boss isn’t a good leader; on and on. Interestingly, I also get overly negative explanations about previous job changes.

Since many of these people are actually really good candidates, I end up coaching them on how to better describe why you want to make a change. Here are some rules:

Every negative can be turned into a positive. Think yin /yang. What is the flip side, the reframe of the negative aspect of your employment? If you think your company is moving too slowly, you say you want a faster paced environment. If you think your boss is poor at giving direction, you say you want a leader who makes it clear what your objectives are, so you have a define path to achieving the goal.

Two sentences is enough. One to describe the circumstances (“I’ve decided to move on; there was a 50-person RIF,” etc.), and one sentence that is forward-looking (“I would like ------------- in my next position).

Show Class. If the interviewer hears you saying negative things, he or she can assume that someday you’ll be saying similar things about him or her. Show some class, and model the behavior you want them to expect from you in the future.

Talk about the future. It is human nature to dig in dirt, gossip, look for the sensational aspects that are fun to discuss. Don’t give in to the temptation. Don’t let a skilled interviewer trap you into “dishing” about all the reasons you are unhappy, only to surprise you with a rejection. Move the conversation to how your capabilities are going to add value to the new employer.

An “A” Player just doesn’t have anything bad to say about a current or past employer! Why would they?