Top 10 Reasons to Use a Recruiting Research Firm

Recruiting research firms, such as Intellerati, are positioned as an alternative to traditional executive search firms. Executive search research firms uncover and map prospective candidates — a process known as candidate identification (“candidate ID”) and name generation (“name gen”). Recruiting research firms also profile candidates by enhancing the candidate records with career details, phone and email information, and other relevant information.  Even better, some executive search research firms contact and qualify prospects, delivering interested and qualified candidates to your doorstep.

Having a recruiting research firm focus on the front end of an executive search saves you valuable time and enables you to focus on more important matters. It frees you up to usher interested candidates through to hire. Moreover, recruitment research firms serve as a natural extension of your own team without increasing headcount. They serve as subject matter experts. In fact, the really good research firms can help your recruiters and talent acquisition teams gain a competitive advantage by leveraging the power of actionable intelligence. Of course, to enjoy the advantages of an executive search intelligence firm, you simply need a reason to begin.

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1. Retained search is not an option.
Retained executive search firms charge fees that often are in excess of $100,000 per search engagement.  Clearly, from a budgetary perspective, retained firms are not the right choice for every executive search.  Moreover, retained search engagements fail to complete 40% of the time. Recruiting research research firms offer a more collaborative, transparent, and flexible approach that reduces the risk of failure and gives you the opportunity to save.

2. Contingency search is not working for you.
Contingency search is great when it works. You only pay when a contingency firm makes a placement. However, when you have a lot of hires to make, those placement fees really add up.  Recruiting research firms give you the opportunity to save while eliminating the risk of an opening not getting filled. Contingency firms are often forced to abandon searches that are too hard or that take too long.

3. Job postings are not working for you either.
Job postings can result in a huge amount of wasted time and effort because anyone can apply and often do. As many as 98% of job applicants lack the necessary qualifications, leaving employers wondering whether the candidates even read the position description in the first place. Making matters worse, job postings attract active candidates — a talent pool made up primarily of unemployed and unhappy workers. Research firms provide much needed relief by targeting passive candidates, a higher quality talent pool

4. You have an important executive opening that is not at the C- level.
Openings at the mid-executive level can be hard to fill. Often the leading retained search firms refuse to work on searches at the Senior Director and Vice President level: they’re simply not lucrative enough. Recruiting research firms are ideally suited to addressing roles at the $150,000-$250,000 compensation range.

5. You have evergreen senior technical openings that will not go away.
Recruiting research firms also excel at filling perpetual openings that are highly technical and hard-to-fill — such as partner-level roles on the technical career track. A good recruitment research firm can map, profile, and develop available talent for faster, cost-effective hires. It can also provide you with market insight to inform your search strategy.

6. You do not have the bandwidth to fill all your critical openings.
If you have too many important openings and too few recruiters to fill them, recruiting research firms can offer you much needed relief whenever your bandwidth is maxed out. Because executive search research firms offer unbundled recruiting services, you can get help with whatever part of the recruiting process you need.  By using a trusted research partner, you can improve recruiting quality while keeping your talent acquisition headcount low.

7. Your candidate slates have too few women or persons of color.
Executive search research is a great way to boost to your diversity talent acquisition efforts. Engaging a recruiting research firm to develop a diversity talent pool in advance of your hiring needs can help make sure that your executive candidate slates are diverse. In fact, because many diverse candidates do not self-identify, real research expertise is required to uncover the best and brightest prospects.

8. You need to replace an incumbent senior executive.
If you need to replace a senior level executive, a recruiting research firm offers you a much-needed veil of secrecy to recruit qualified, interested candidates while that executive is still in the role. Proactively developing a succession bench also ensures continuity of operations in the event a key senior executive jumps ship. Succession benches are ideally suited for C-level (CXO) roles.

9. Your company has implemented a corporate executive search function.
Increasingly, large corporations are establishing internal executive recruiting teams, often led by a former search partner from one of the leading retained executive search firms.  Top executive search research firms offer unbundled, flexible, collaborative services tailored to enhance the efforts of internal executive recruiting teams.

10. You are seeking a competitive advantage and unprecedented ROI. 
Most important, in addition to delivering great hires, top executive search research firms help you harness the power of information making you smarter. For example, they can provide you with insight on how your competitors are recruiting and how they may or may not be besting your offers. In fact, when you blend talent acquisition with human capital intelligence the return-on-investment is often profound. In addition to delivering top talent, we have helped clients spot emergent competitors, identify companies for M&A, and save millions in product development costs — all that from a single study of a talent ecosystem.

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Top 5 Things to Look for When Hiring CRM Executives

With more and more companies harnessing the power of big data and analytics, the demand is on the rise for skilled CRM executives. In fact, here at Intellerati, we have experienced an influx of Customer Relationship Management (CRM) engagements as companies discover that senior CRM executive openings are getting harder to fill.

Senior executives within the CRM, Digital Marketing, Customer Acquisition, Engagement and Retention functions are the masters of looking at the data analytics and deciding what to do with all that information. They know what to look for in the analytics to inform decisions around how often to contact each kind of customer and what “channel” to use for each type — whether it is better to reach out on Facebook or by email. They spot patterns in customer or user behavior — such as as the time of day customers are more likely to login to a website or to play a game. Then then set a strategy leveraging that new insight to acquire, engage and retain customers. The function often sits between Marketing and Data Analytics — serving as a kind of translator — or it is frequently seated in Marketing. Either way, the scope of responsibilities vary according to the organizational needs and structure of each particular company. However, we’ve observed that while employers in pursuit of top CRM leadership talent are seeking a very nuanced blend of knowledge, skills and abilities, they look for 5 basic qualifications to hone in on the candidates who are the best of the best.

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1) Can this person not only think, but do? While the role requires someone who is pretty technical and highly educated, most of our clients require that the candidate not be all up “in their head”. In fact, some clients cite that as the reason they prefer candidates with a master’s degree, such as an MBA, over a PhD. In addition to ideation, a candidate must have the executive ability to formulate strategy and execute against that plan. Moreover, most clients are seeking a balance of the technical knowledge with an intuitive sense of the customer, one that is informed by a background in the marketing discipline. In order to translate data analytics into ROI, you need a balance of the technical with real human insight.

2) A proven track record of success When considering candidates ask yourself, “Has this person done what you need this person to do successfully in the past?” As you speak with the executive, get specific examples describing how they have solved the problems your organization is looking to solve in the past. For example, if your organization is looking for someone that can increase new customer acquisition, make sure that the candidate has solid examples (with metrics if possible) of how they are doing that in their current roles or in their past roles. Of course, past performance is not always an accurate indicator of future performance, but it does speak to a person’s character.

3) Where has your candidate worked previously? Does the candidate you are considering come from an academy company that is well known for cultivating great CRM talent? Often top CRM talent are alumni of academy companies such as American Express where they master best practices.

4)Does the candidate have startup experience? If your company is still early stage, you will likely need someone who has had experience working in a startup-like environment. To be successful, CRM executives at startups must be willing to “roll up their sleeves” and must be comfortable with ambiguity. If a candidate has not yet worked in that kind of environment, then there needs to be something entrepreneurial in the background that speaks to their ability to get things done in a more rough-and-tumble environment. Conversely, Fortune 100 companies require CRM executives with large company experience, adept at eliciting the buy-in required to get things done.

5)Is the candidate aligned with your company culture? Almost as important as the candidates knowledge, skills and abilities is the person’s fit with your company culture. If your culture is work-hard-play-hard, then the candidate should have a history of success working in that kind of environment. That leader may not be the best fit for a larger company that moves more slowly, is more staid and formal, or where executives don’t clock as many hours.

Of course, these are not all of the points you should consider as you conduct your next executive search for a head of CRM. What do you believe are the essential qualities for your next CRM hire?

New Executive Search Research Paradigm | Intellerati Video

A new executive search research paradigm is transforming board and senior-level executive recruiting as we know it.  Quite simply, research is the execution engine of executive search that identifies and delivers top talent: build a better engine and you create the ultimate recruiting machine. With Intellerati, corporate executive recruiters have a tremendous opportunity to gain a competitive advantage by making executive search smarter.  Our latest video describes the new paradigm.

 

 

Intellerati is a human capital intelligence and executive search research firm headquartered in the Greater New York City Area. We recruit board and senior-level executives for some of the most powerful and successful companies in media and technology. We do it direct and on-demand. Positioned as an alternative to retained executive search firms, Intellerati partners with hiring executives and internal executive recruiters, serving as a natural extension of their own in-house recruiting teams.

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The Latest Trends in Executive Search? Big Data. Big Data. Big Data.

The executive search industry has witnessed a dramatic shift in how board and senior-level executives are recruited.  Co-Founder and General Partner of the venture capital firm Andreessen-Horowitz Marc Andreessen believes LinkedIn is “eating” the recruiting industry. Yes, that’s the actual verb he uses in an essay he wrote for The Wall Street JournalWhy Software is Eating the World” and yes, as an investor in LinkedIn, Mr. Andreessen has a vested interest in promoting the idea. But he has a point.

Software is changing how we do what we do in fundamental ways. But with every cool new advance in technology, there’s a catch. (Isn’t there always?)

There is now a treasure trove of data available on candidates.  However, in most cases, it is not current, it is incomplete, and increasingly it is not structured.  Moreover, there is so much information available, recruiters are suffering from information overload. Increasingly, they’re missing top talent, not because the candidates are hard to find, but because they cannot see the forest for the trees. Recruiting “best practices” were never designed to deal with Big Data.  It represents both a threat and an opportunity that I detail in our latest video.

 

 

 

We welcome your thought and comments on the trends you’ve witnessed.

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What are the Best Search Firms in the New York City Area?

Every year, we at Intellarati meet with more than 100 buyers of executive search as does our retained search practice The Good Search. Since we advocate for better executive search practices and make our feelings known (on this blog and elsewhere), we frequently get asked about the other search firms or competitors in the NYC region. Naturally, people want to know what are the best executive search firms in the New York City Area.

In the interest of objectivity and putting a little good karma out there, below is the listing of some of the other New York City Area executive search firms that conduct senior executive search in the tri-state region of New YorkConnecticut, and New Jersey.  While everyone has their favorites, these firms have solid histories of providing retained executive search in and around Manhattan.

Question for the reader:
What qualities do you seek in the executive search firms that you use? What qualities distinguish those that you consider to be among the best? We welcome your thoughts and comments . . .

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Executive Search Pricing: What Does Executive Search Cost?

Cost is one of the top questions that executive search buyers have when they have an important opening to fill. The problem with answering the question is that there are so many kinds of search firms and recruiting services available that executive search prices vary wildly.

However, I can give you a sense of what companies typically spend on an executive search by sharing common price ranges of various executive search services.

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Going Out to Search Or Ordering In?

The first question a company needs to answer is whether it wants to hand off the executive search to a search firm or whether it wants to manage the engagement in-house. There are companies that offer flexible unbundled search and recruiting research services, a trend that has grown in popularity in recent years. Employers seeking full-service executive search services usually turn to a search firm.

For companies that want to go “out to search” there are two traditional search firm models: retained search firms and contingency firms.

  1. Retained:  Retained executive search firms are paid a retainer to do the work of executive search. The fee is not contingent upon making an actual placement. Retained firms tend to concentrate on recruiting senior executives who are passive candidates — those who are not actively looking for the next job.
  2. Contingency: Contingency search firms are only paid when they make a placement. They tend to concentrate on recruiting candidates that are actively looking for their next jobs. While there is some cross over — mainly at the VP and Director levels — retained firms focus on executive searches, and contingency firms focus on non-executive search.

Executive Search Pricing: Search Firms

The pricing model of traditional search firms typically does not give clients an opportunity to save. Employers pay a full fee regardless as to whether the search takes a week, a month, or half a year. That’s because the pricing is not based on effort or time spent looking or the difficulty of a particular engagement. Rather, it is based on a percentage of annual compensation.

Percentage-Based Pricing

With percentage fees, the more a candidate is paid, the more a search firm makes. Some contend that is a conflict of interest. Percentage-based pricing provides financial incentive for search firms to negotiate higher salaries of the candidates they place, which is not in the best interest of the client.

  • Retained search: 30-33% of total first year cash compensation of the candidate placed, plus expenses
  • Contingency Search: 20-25% of first year base salary of the candidate placed
Flat Fee Pricing

A small percentage of search firms charge a flat fee, including Egon Zehnder, one of the leading retained firms in the world. (Full disclosure: Intellerati is the research division of The Good Search, which also offers retained services by flat fee.) Egon Zehnder maintains the pricing model enables the firm to be “completely unbiased” and to “facilitate hiring negotiations with no conflict of interest. Most fixed fees are similar in total amount to the percentage based fees.

While there will always be firms that charge less, and there were always be search engagements that enable a firm to charge more, most executive search fees fall within a basic range, regardless as to how the firm does the math.

Average Full-Service Executive Search Fee
  • $50,000 – $300,000

Executive Search Pricing:In-House Services

At large corporations, the do-it-yourself executive search model has grown in popularity.  Employers using internal executive recruiters and corporate executive search teams to conduct executive search in-house. In doing so, they frequently turn to executive search research firms and vendors offering unbundled executive search services to augment their own efforts. Sometimes, all they want is a list of potential candidates for their own executive recruiters to call. Sometimes, they want interested, qualified candidates that they’ll usher through the interview process through to hire. Sometimes, they want a firm that flexes to serve as an extension of their own team.

Executive Search Research and Unbundled Services

Executive Search Research firms and search firms offering unbundled services typically charge by the hour, by the project/search, or by monthly retainer.  Research firms offering name generation services also charge by-the-name. Name-gen research produces lists of target candidate names. Typically, the lists are comprised of information gathered from the Internet and from calling into companies.

The wide range in pricing depends on the services offerred and on domain expertise, access to top talent, consultative abilities, and executive presence of the firm. The budget firms may produce candidates who are simply “willing to take a call”, without qualifying, interviewing and vetting the candidate with a more thorough assessment. They typically do not position offers, assist in negotiations, and close the candidate.

Average By-the-Name Prices:
  • $30 to $50 a name
Average By-the-Hour Prices:
  • $90 to $150 an hour
Average By-The-Month Prices
  • $20,000 – $40,000

Increasingly, in-house recruiting teams are turning firms that offer the expertise of retained search firms services, but a much more flexible model. designed for in-house search teams.  Frequently, theses firms work by monthly retainer as a natural extension the in-house executive recruiting team.  Unlike the retained model, the monthly retainer gives companies a significant opportunity to save.

In most cases, firms offering unbundled services are not responsible for the hire. Research firms do make it a practice to guarantee the quality of their research.

Risks to Consider

By-the-Name Risks

The risk of By-the-Name pricing is paying for names you don’t need. Another weakness is it is a quantitative approach. A name doesn’t tell your who is good. Moreover, a name does not a candidate make. Someone still needs to do the work of recruiting, converting the name into a viable candidate.

By-the-Hour Risks

The risk of By-the-Hour pricing is that it gives the illusion of comparing apples-to-apples when that is rarely the case. A company with a lower hourly rate may be a terrific bargain or it might cost you more per engagement — either in the total fee for the engagement or in a botched search or missed opportunity. Another risk of By-The-Hour pricing is that the meter is always running. The risk can be mitigated if it is possible to set a flat project fee, so you know what the work will cost.  The challenge of setting a project fee is that research firms are not Masters of the Universe that control outcome.

By-the-Month Risks

The risk of By-the-Month pricing is that a company could end up paying more for an executive search if, for example, a search is put on hold for a time or if hiring executives are on vacation and available for interviews. However, that risk is mitigated when companies have the option of switching the firm to another search. Also, the monthly model works better when a company can commit to a four or more searches a year. Doing so enables the firm to assign a specific team member to serve the client for concierge-quality service.

The True Cost of Executive Search

Last, price is not the same as the total cost of a search, a figure that is the one that I’ve found is the more accurate measure. It is a figure that also takes other factors into account, such as the cost of a position languishing unfilled, or of a cheaper, but ultimately bad hire. There is a reason that the most powerful and successful employers in the world continue to invest in quality executive search, whether through their own teams or in league with a trusted executive search partner. I’ll address that topic in another post.

Questions for the reader:

What do you pay for executive search? If you have paid different fees, what have you paid and what was the outcome? We welcome your thoughts and comments.

 

 

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