8 Questions to Ask About Using a Search Firm

Search cost avoidanceI’ve led talent acquisition teams for over 20 years in three industries: banking/financial, high tech, and healthcare, and before that I dabbled in recruiting as an HR generalist. For the past one and a half years I went to the dark side when I joined the executive search world, or so I thought before I took the plunge. What the last couple of years has taught me is that I had things backwards when it comes to deciding whether a search firm should be engaged.

The rest of this article will help define what I mean. I know what you are thinking … is this just another self-serving article about the search industry?

As a leader of talent acquisition teams, I felt it was my responsibility to do what I termed “search avoidance.” I even had a search cost-avoidance metric that looked like the one pictured.

I most often found that I was saving the company money … or was I? I would never consider using a search firm until the internal staffing team was not able to source and secure the talent that our internal customers needed. I usually used a metric of total days open to gauge when we were “getting in trouble” or would determine that we didn’t have the skill set to do the work.

As I’ve thought through that approach, I realized that it was totally backwards! What is ultimately important is whether the actions you take will get the results expected. Here are a few questions you should consider asking early in the engagement process with the internal client:

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  • Does my internal staff have the background and experience to be successful in this search?
  • Does my internal staff have the bandwidth to complete the search in the time the client needs it done?
  • Is this a repetitive search or a one off?
  • Does the internal staff have the passion to successfully complete this search?
  • Does the internal client really know what they want or will they know it when they see it?
  • How critical to the success of the business is this search? I.e. is there immediate contribution to the bottom line or top line by completing the search? If so, measure the loss of that against the search fee, not whether avoiding the search is avoiding cost.
  • Which direction is best to determine whether you will get a quality hire?
  • Do you have search firms that you can trust and engage to deliver in the time frame needed, and have you created an assessment process to determine if they have had success in this type of search?

What I think you will find is that you will be perceived by your internal clients as adding value to your team and your organization. Don’t get me wrong — you must continue to be diligent about spending money wisely. But it may be time to do what Dr. Covey suggested quite a few years ago. When it comes to the use of a search firm “begin with the end in mind.”

I welcome any comments or thoughts about this approach or lessons you’ve learned that I might share in the future.

Bill Graves, the managing partner of Sources for Talent, LLC, has been working with Sanford Rose Associates – The Tolan Group in executive search. He formerly served as director of talent acquisition at Press Ganey Associates. Press Ganey partners with more than 11,000 health care organizations worldwide to create and sustain high-performing organizations, and, ultimately, improve the overall patient experience. While there Mr. Graves implemented a video interviewing platform (HireVue), and was also responsible for behavioral interviewing and assessment implementation, and applicant tracking assessment investigation and implementation. Earlier in his career he was technical recruiting manager and divisional recruiting director at Xerox. There he was responsible for technical recruitment in the engineering and IT departments as well as sales and customer recruiting and implementation of an on-site temporary staffing process. He also served as an end-to-end corporate staffing system team member. Graves earlier held several HR and recruiting roles at Boeing, Bank of America, and Tektronix.

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11 Comments on “8 Questions to Ask About Using a Search Firm

  1. I’m always amazed and a little disappointed when a company comes to me after a lengthy search process and now thinks there’s some Magic to finding a person.

    Do I have more time to make those calls? Yes. But when a company has burned through a couple hundred contacts, there’s a lot of inefficiency for the third party recruiter. That’s one reason we have to keep fees high. Chasing a six month stale job req at 20% is a quick way to burn out.

    The best searches are fresh searches.

    So kudos for you to figuring that out. Now if we could get third party recruiters to understand the risks you face when using a third party firm, we might get somewhere.

  2. Great article, thank you.

    Another question to ask: tell me about your guarantees? Both of placement and longevity of hire. That will separate out many firms, and help HR leaders determine the best fit for their needs.

    1. Not really, most have 30-90 days replacement, mos try to avoid offering a refund. Retained search generally give longer guarantees, up to a year sometimes. But that’s all industry standard, it doesn’t really distinguish any from the other.

      1. My point, ‘results matter.’ ‘Speed matters.’ ‘Fit matters.’ Not all search firm guarantees are the same; and certainly few search firms will accept liquidated damages for slow search or no success; however, if they would, it would be a compelling difference between high performers and the rest. The presumption of a guarantee is a statement of validity of the work and goodness of fit; the perception of certainty of results. If you don’t think guarantees matter, strike the text from your contract and see if it raises any ire from your clients.

        1. I didn’t say they didn’t matter, I said almost every firm has them, so they don’t help in distinguishing one firm from another unless you can get specifics WRT retention, and those are next to impossible to get because it would require releases from every single client with the understanding that the information would be disclosed on some level. Nor do guarantees deal with root problems; at a certain point firms have to take responsibility for retaining the people they hire and not blaming it on an incorrect ‘fit’ for someone who was hired over a year ago.

  3. Good questions to ask, but I think they should be subsumed in a large framework of asking whether or not the hiring process in place at any particular firm – everything from how a req comes up and gets approved, through on boarding and a year or so in from hire – is built to produce good people? Most times the answer is no. As Jim Durbin mentioned below, firms often come to agencies when they are already ‘troubled,’ or facing ‘challenges’ as they say. Both of which are euphemisms for common hiring and retention problems which are usually rooted in the client’s culture, and often impossible to overcome. Usually these problems end up being poor pay, benefits, or culture/management. There aren’t enough fingers in the world for me to count the number of managers that I’ve spoken with who have been desperately looking for ‘the right kind of person’ to hire, only to work with them for a short while and realize the manager was the problem. Everything from low pay to screaming at employees and calling them, “%$#@ing idiots,” repeatedly, to piss poor benefits, no off time, ridiculous hours, or expectations like bilingual brain surgeons who can type 100 word per minute, etc., etc., etc.

    Generally speaking the places where people want to work don’t need recruiters, they need people to manage the influx of applicants and to occasionally reach out to get hard to find skill sets by proactively marketing opportunities to people. But they already have a great employment product that people want to buy. The places that need help on a consistent basis are generally the ones who are facing the a’fore mentioned ‘challenges.’ So, before asking these questions, they would be better benefited by using an assessment tool of some kind to get a reality check as to what they can command, what they can afford, realize where in the market they are really playing, and then see about doing their own recruiting or engaging an agency if necessary.

  4. This is very timely. Only this morning I was thinking about a tool I designed when I worked in-house at Shell which focused on helping internal recruiters work with hiring managers to determine the optimal resourcing strategy (internal direct sourcing or third party) by assigning a rating in terms of urgency, difficulty of search, internal capability/networks in that area, priority within the broader organisational context etc. Now I’m on the other side, I still don’t get this ‘them and us’ mindset. I do understand that many internal recruitment functions are seeking to build their credibility with the business but it isn’t admitting failure to use search firms when appropriate, it’s about making a call to get to results in the most efficient way. The cost to the business of not getting the right results quickly is likely to be far greater than a search fee.

    1. It is often viewed as a failure of internal recruiting when super fast results aren’t gotten. There’s two problems with this. One, the ROI of a pipeline goes way down in corporate vs agency settings. An agency may have thirty similar positions at any given time, however a corporate may have just one such position. Generally speaking, if you need a pipeline in corporate recruiting, you’re either growing exponentially or your turnover is horrendous. So, when quick results are needed, agencies can help. But this leads to two, quick results are always needed because most managers suck, despite even earnest efforts by recruiters to get an idea of future needs. I did that at my last job, and still damn near every hire was a fire drill. Rarely was a position truly planned for and anticipated. Once it was approved, the manager always needed this person three months ago.

      People just really do not value hiring or the HR or TA processes in general, they do not value their employees in general, so is it any wonder they always want the take-out-food model; deliver it to me all cooked and ready in fifteen minutes after one phone call.

  5. Glad you finally saw the light. Search is a value added tool and resource and should be valued by talent leaders. I have been on both sides, external search and leading TA teams and have always maintained relationships with value added services.

    Companies use “search firm cost avoidance” as a good thing and while sometimes it can be; internal talent leaders know that open positions cost money, people walking out the door costs money, people coming on board costs money, etc.

    I laugh every year at the article that comes out that says Corporate Recruiting sucks or Executive Search sucks…news flash, they are very different worlds and not the same but each hold significant value.

    Companies and talent leaders who recognize how valuable a good search partner is, will always win.

  6. Good article, and I too have sat on both sides of this proverbial fence. The key to this all is having a “value add”. There are pros and cons to both sides and using/inspiring the talent internally to get the job done should be a first thought, but the cost does have to be a weighed factor.

    Is the staff capable of finding the talent, working within the time table and focusing on the priority or is a firm needed to narrow the target window and focus exclusively on the task at hand.

    Criticism on both sides is unwarranted if trying to compare apples to apples, I assure you the recruiter at the firm does not have committee work requirements, projects for improvement of processes due to changes in branding, strategy, HRIS systems etc. At the same time a search firm recruiter can suffer from overload of “pounding the phones”.

    Understand and engage your firm partner and you will have success in your searches. Oh, the other key, make sure your search is adequately defined for the firm. If you don’t know what you are recruiting or what it looks like, they won’t be anymore successful than the inside recruiters.

    Communication, communication, communication.

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