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Deciding on which search firm meets your particular needs is difficult if you have not had experience working with various firms. The only reason to hire a search firm is you have a problem that needs to be corrected quickly and you do not want to have the problem occur again. All search firms boil down to just one person, the consultant solving your problem. It is difficult for an outsider to judge a retained executive search professional's competence. It can be hard to separate someone with true retained executive search execution ability from someone who merely makes a good first impression.

SELECTING A SEARCH FIRM

RECOMMENDED READING: "FINDING HEROES" A QUENTASENTIAL BOOK FOR HIRING MANAGERS DEALING WITH RECRUITING EMPLOYEES AND SELECTING AN EXECUTIVE SEARCH FIRM.

The best indicator of a retained executive search professional's ability is the person's reputation and experience in conducting executive searches. Some firms have "Face People" individuals who sell the services of the firm, and then assign the task to more junior consultants to complete. They surface again in the candidate presentation phase to sell the candidates to the client. When this happens, chances are your search is not a priority in the firm. When sitting down with a search firm for the first time and a team from the search firm arrives for the meeting, start off the meeting by asking each individual what role they play in the search process and their background and experience.

Questions to ask a search firm:

• What companies in your industry are off limits to the firm?
• What is the firm's success ratio in closing searches successfully?
• What is the guarantee of the selected candidate success in the position?
• What is your replacement guarantee if the candidate proves not to be successful in the guarantee period?
• What is your sourcing and assessment process of candidates?
• What are the circumstances that will cause the firm do to give up on a search?
• What is the timing before seeing a slate of candidates?

THE CONSULTANT'S BANDWIDTH

One of the most important factors in how quickly your retained executive search is completed is how much attention the consultant and his team devote to it. This is typically a function of the firm for which the consultant works. "Large" search firms leverage their senior consultants heavily with junior staff. This means that your search project might only be worked on a half time bases or one day per week at best. (No wonder the large firm's average time to complete is 180+ days!) Hire a consultant working on no more than 3-5 projects at a given time. Working on more than 3-5 projects, the quality drops significantly.

LARGE FIRM vs. SMALLER FIRM

Inexperienced buyers of retained executive search services often feel safer dealing with a major, multi-national firm. The truth is that you are hiring an individual consultant, not a firm. Despite statements to the contrary, there is actually very little "cross fertilization" between search teams at major firms. In fact, there is often competition between search teams within the same firm for the best candidates. If a firm has numerous searches within a specific industry sector, several consultants within that firm might be vying for the same candidates.

A smaller firm has fewer clients, and hence fewer conflicts in serving their clients. You will also have more clout with a smaller, more personalized retained executive firm. Just be sure the firm has experience filling positions at the required seniority level.

COSTS

Retained executive search firms almost always charge one-third of the successful candidate's total annual cash compensation (including bonuses at target). This fee is payable whether or not the firm actually completes the search. They are also reimbursed for their out-of-pocket expenses, typically associated with candidate travel. In addition, all the major search firms charge additional, "allocated" expenses of 15-18% of the total retainer amount. The stated rationale for this charge varies, but in fact it is a hidden tax than can add $15,000 or more to your total cost. Look for a retained executive search firm that does not charge for allocated costs and is reimbursed only for out-of-pocket costs that are agreed upon in advance.

Contingency search firms charge only if they place a candidate. While this would appear to reduce your risk, such firms work on a large number of assignments simultaneously and offer very little personalized service. Also, few of these firms work at the executive level. Using financial terminology, such firms are on the "sell side", often representing candidates they hope to place. In contrast, the retained executive search firms are on the "buy side", devoting a large amount of time conducting a highly tailored and intensive search for a specific client with an urgent, senior level, need.

Clients often overlook the largest cost of all: the opportunity cost of not having a top-notch executive in place and advancing the company. This opportunity cost is just as real as out-of-pocket costs. In the case of fast-rising tech companies where the firm's progress and valuation - if not outright survival - can be affected, having the search completed quickly and with high quality outweighs the fee.

Savvy retained executive search buyers are rarely cost driven. Rather, they select a retained executive search consultant they feel will drive the project through to a successful conclusion. Look for a retained executive search consultant that "takes it personally", and is truly committed to getting it completed successfully and quickly.