Choosing A Recruiter (For Client Companies)

The Headhunting/Recruiting Industry has been around (unofficially) for thousands of years. For example, even ancient armies probably needed to find recruits to serve as warriors, and almost all religions had similar representatives whose function it was to find new acolytes, converts, devotees, etc., as well as to renew the faith of former adherents. I would suggest that Recruiting is probably the second oldest profession, at least according to popular belief and history. Modern recruiting, as an industry, began in the 1920's and 1930's (according to the classic text "The Headhunters" by John Byrne (https://www.amazon.com/HEADHUNTERS-Byrne/dp/0025179500).

Since then, the Employment/Staffing Industry has evolved into a $30 billion yearly market (according to Statista: https://www.statista.com/statistics/1097508/market-size-executive-search-industry-worldwide/) for executive positions. Other estimates, focused more on placements involving 'individual contributor' or 'technical' positions are in the range of as much as $400 billion per year in collected fees, with one firm (relatively unknown and unheard of, even to me, as a participant and exponent of the Industry for 33+ years) called 'Allegis' reporting revenues of $10.4 billion for 2020.

The obvious fact is that Executive Search, 'Technical Search' and other "Staffing"-related firms are here to stay, and that they play an essential and vital part in the world's economy, enabling many companies to enhance their functionality and market-share by providing workers who perform essential and valuable functions that allow those companies who hire them to address the needs of their own clients in a more satisfactory fashion.

Sometimes, aspersions are cast towards recruiters for the fees they charge, which seem 'high', but are typically simply based on the value of an employee being placed in a specific position, in contrast to the extreme cost and obvious loss to profitability of not having that position filled. Estimates of not having an employee in a key role range from 30% to 50% of that prospective employee's salary, which is why placement firms tend to charge fees in the same range. Companies that offer discounted fees of 25% (and sometimes less) are counting on 'volume business' to make up for the reduction in fees that they offer, and are a good source of bargains on great candidates, as well.

When a company pays for a search, what they are really paying for is not the hired candidate (a candidate who is hired is not a 'product', like a toaster or pair of shoes), but for the time of the highly-skilled industry-expert recruiter who dedicates himself/herself towards contacting many potential candidates (often hundreds, and sometimes thousands of people) in a specific niche which only the highly-skilled and expert recruiter would ever be capable of identifying, finding, contacting and reaching. This is why many search firms charge hourly rates ($200 to $700 per hour) like attorneys charge, without any guarantee of results. In a similar manner, 'retained searches' involve 'up-front' payments which do NOT guarantee any results, but which are intended to defray the search firm's expenses, as well as to discourage 'window-shopping' and 'looky-loo' sorts of pseudo-clients, who have insufficient respect for the recruiter's time and value.

My solution has been to offer discounted rates, with a hybridized 'retainer' which is refundable if my client is not able to interview at least three candidates I present that they are willing to bring in for an interview at a local site. With the past/current conditions of COVID, we have modified this condition to stipulate that interviews may be conducted as full panel ZOOM- or Skype- video meetings, instead. I have had an extremely high percentage of repeat clientele, whereas old-style firms offering the 'old model' of retainer typically fail 66% of the time, and charge fees which are 40% higher on the base salary, with additional charges on stock-options, bonuses, relocation, sign-on bonuses, and loans.

When looking for a search firm to fill your key positions, you should look for someone to be your prime contact (key representative) who will work your critical search personally, and oversee all elements of the search (i.e. industry research, sourcing, contacting, recruiting, negotiation of salary, on-boarding, and follow-thru). Often, the largest companies (which charge the highest fees, and paradoxically, tend to offer inferior customer satisfaction) will divide these functions up into multiple persons, which tends to lead to incomplete communication, loose ends, 'dropped balls', and a less satisfactory outcome. The very rare Headhunter who can offer excellent skill at all these functions is worth his weight in gold (metaphorically as well as literally), and tends to far outperform even the largest and most comprehensive firms, with the largest research staffs. This is a fact I have repeatedly seen proven true, in my 33+ year career.

Probably just as important as finding a Headhunter who has complete mastery of all phases of the hiring/recruiting process (truly a rarity!) is finding one who has a strong Industry background. Industry expertise (for me, a Chemical Engineer, I relish the technical challenges of working on searches which stretch my knowledge and understanding of any relevant technology) is a factor which makes an enormous difference, especially since so many recruiters simply 'landed' in their positions from outside fields with no technical expertise whatsoever. For example, the personal 'network' of a recruiter that has actual industry experience in a particular field is likely to be magnitudes larger, with much more familiarity with individual contacts, built up over years of professional practice, than any 'outsider'.

The paramount factors any prospective Client company should consider when making their choice for a Headhunter/Partner/Recruiter to fill their key positions should be:

(1) How much experience does this individual have in our Company's technology?

(2) Is this a recruiter with a successful track-record, or is he/she a 'newbie' offering the lowest possible fees, hoping to secure business?

(3) Is this recruiter intellectually 'strong'-enough to interview top scientists and engineers with PhDs and multiple patents, to be able to distinguish whether those candidates are really good 'fits' for a specific position?

(4) Is this Headhunter 'hands-on' throughout the entire process (from 'womb-to-tomb'), ensuring the highest possible level of quality control on the introduction, 'vetting', etc. of candidates; thru the offer, negotiation, and closing stages?

(5) Does this recruiter follow up with the candidates to ensure that they actually start at the position, once they have accepted the offer, and does he know how to deal with situations like 'changes of heart', 'counter-offers', 'cold-feet', and so on?

(6) Is this Headhunter a skilled-enough 'Management Consultant' (which all great Recruiters really need to be, to be successful) to be able to teach the partners (HR, etc.) how to successfully conduct a search and hire key employees, how to improve their own practices, how to correct any mistakes they are prone to make?

(7) Is this Headhunter/Partner able to communicate well and show in-company hiring teams how to succeed?

(8) Does this vendor/Consultant really care about your company's success? Is he/she willing to 'go the extra mile' to make success happen in terms of hiring the right person?

(9) Do you get a good 'gut-feeling' about this person, or do you feel doubts and have reasons to wonder about his/her personality/ethics/behavior or other factors which might make it hard to work or partner together?

(10) Does this recruiter offer you a clear-cut 'game-plan' whereby he/she will fulfill the obligations you wish to bestow upon him/her? Is that game plan thorough, definitive, and believable? Do you have confidence in the dedication of this person you are choosing to make your Company a better and more competitive one?