Executive Recruitment


The rapid growth of services to find and place executive talent has also created confusion for many involved in this field. This is not surprising since some organizations serve the company, some serve the executive, and others attempt to serve both.

The name of an organization may not immediately clarify the nature of its activities, and often requires a look beneath the label. These labels include management consulting, executive search, executive career counseling and employment agencies.

Management Consultants
Management consulting firms offer a broad range of professional services to companies, institutions and the government who retain them for particular studies and assistance with many kinds of management and operating problems. Some management consulting firms also provide professional executive search services for their clients. It is not uncommon for a corporation to ask a management consulting firm to undertake the search for a qualified executive. Charges to the client company are based on professional time spent rather than a percentage of salary or fixed fee. 

Management consulting firms that provide executive recruiting services are generally willing to receive resumes from executives who are immediately available or who may be contemplating a change in position.

Executive Search Firms
Companies seeking executives employ these firms, also known as executive recruiting consultants, to identify and appraise executives qualified to fill specific positions. This highly specialized area of the management consulting profession started as a normal service rendered by general management consulting firms. 

Executive search has now experienced rapid growth, with hundreds of consultants handling executive search or recruiting, either as a specialty or in conjunction with other forms of consulting work. Executive search firms generally bill their clients monthly as the search progresses, and deduct these payments from the total fee, frequently 20 to 30 percent of the first year's compensation. Some may charge on regular per diem basis, or a flat fee, plus out-of-pocket expenses.

While these firms accept resumes from executives seeking new job opportunities, they do not help executives find jobs.

Executive Career Counseling Firms
The principal client of such a firm is the executive seeking a position. The fee is sometimes paid by a current employer who may feel an obligation to help an employee relocate, but it is usually paid by the executive. Fees vary widely, from approximately $25 per hour to a fixed fee amounting to as much as several thousand dollars per individual. 

Some firms in this category may ask for additional fees from companies that employ their clients. Some firms have a psychologist, licensed or otherwise, on their staff and include a "psychological appraisal" in their services as a selling point. Caution should be exercised to determine the reliability of these tests, since the results may be designed more to flatter clients and persuade them to use the firm's services more extensively - at an additional fee.

Some firms may have listings of available positions. Others have directories listing possible employers by type, size and geographic areas, which can be adapted to an applicant's specific fields of interest.

Nearly all prepare letters and resumes and to varying degrees offer counsel on interviews and negotiations with potential employers.

Executive counseling firms usually do not guarantee employment, nor is the fee contingent on employment. Rather, the fee is for specific services. Complainants have often alleged that they did not receive services promised. Therefore, the client should investigate the reputation of the firm and should insist that all details, including the fee, be spelled out clearly in writing. The client should also consult a lawyer before signing any contracts.

Employment Agencies
The simplest way to identify an employment agency is to determine whether it is licensed, as required in many states. Fees are often paid by employers. If fees are paid by individuals, New York State prohibits advance fees. Instead, the fees are paid after placement and vary from 25-60% of the first month's wages, depending on how much salary is earned. 

Public Accounting Firms
Some of the small and most of the large CPA firms have management consulting divisions working for client organizations. All are interested to know of the availability of executives, particularly in the financial and related services areas, since these firms are frequently called upon to help in the staffing of key positions. Usually, their fees are on a regular per diem basis plus out-of-pocket expenses, the same arrangement prevailing for their other professional services. 

Executive Clearing Houses
These are information centers whose basic function is to bring together employers and candidates for positions on an informal basis. They collect information from two sources: individuals interested in a position and employers or their search consultants seeking executives to fill specific positions. The information concerning the individual and the position is classified and entered into a computerized retrieval system. Both the individual and the employer are expected to share the cost of these information systems. 

Companies may pay either a standard amount per position per year, or a placement fee, generally 20% of it and when they employ someone referred by the clearing house.

Financial Institutions, Associations and Clubs
Many of the larger commercial banks and some investment banks are interested in knowing of the availability of top executives. They may retain files, but take no active interest or responsibility in placing individuals. It is a business development service for these institutions. Most industry, functional and professional associations and clubs maintain resume files on members seeking to change jobs. 

Guidelines for the Job-Hunting Executive
After evaluating your talents and interests, checking out the employment picture, and developing a resume, you may want to consider a career counseling firm. Exercise judgment in selecting employment counsel. You should demand unmistakable evidence of results. Ask to see materials prepared recently for former clients with a similar background. Ask, too, for references from former clients in circumstances like yours. Get a clear-cut description in writing of what the firm will and will not do, what the costs will be, and the period of time covered by the agreement. 

Tips to follow:

  • Investigate the company. Learn how long it has been in business and the qualifications of its staff. Contact the BBB for a Reliability Report on the firm.
  • Ask for the record or success of placements and the names of satisfied client executives.
  • Ask for the names of satisfied employers with which it has placed personnel.
  • Determine if the firm's advertising has been proper and accurate as to the services offered.
  • Examine the contract. Make sure it covers all aspects of the agreement. Note the service period and any provisions for a refund.
  • Make sure additional promises are in writing and signed by an officer of the firm.

Guidelines for Management
When a company needs an executive, it can promote from within, draw from its backlog of inquiries, or conduct a campaign to attract the right person through an executive search firm. 

Among the advantages of using the services of an executive search firm are its knowledge of management requirements, broad contracts, discretion, practiced skill in evaluation, freeing management from spending time on search details, and confidentiality, especially when the position to be filled has an incumbent.

Before selecting an executive search firm, management should:

  • Visit several firms to develop a working knowledge of their facilities and their approach to recruitment.
  • Meet the individual consultant who will handle the search.
  • Learn when the consultant will be prepared to start work.
  • Determine approximately how much time the assignment will require for satisfactory completion; expect an estimate, not a guarantee.