When hiring new leaders, there are many options for organizations to consider when it comes to driving the best outcome and having a partner who can help solve business problems. A retained firm will partner with you in finding senior executives who can play a pivot role in your organization’s future success.
Research done by Statista found that the executive search firm industry has more than doubled in size over the last decade due to increased demand for its solutions. The report noted that not only do 30% of top business leaders in the U.S. plan to increase their use of executive search firms, but another 52% are likely to use them for confidential searches.
Wondering if you should use a recruiter? To determine if this is the best route for your company, you’ll need to understand the different types of executive search firms and why you should retain one. Here’s what you need to know.
What is a Retained Executive Search Firm?
Retained executive search is exclusive to the search firm, which means there will not be several agencies or any internal team members working on the recruitment while the retained search firm pursues qualified candidates.
The results typically lead to six fully qualified and highly skilled candidates on a first slate. At N2Growth, we iteratively source and stay in the market until a finalist candidate is found.
According to IBISWorld, the method known as retained search is becoming increasingly popular as the industry has experienced more than 1% growth over the last five years and is expected to experience growth of 4.8% in 2022 alone. This data further emphasizes the advantage companies are experiencing as more businesses either begin their partnership with retained executive search firms or increase their investments.
What is a Retained Search?
A retained search is a method known for its aggressive and proactive recruiting of passive candidates focused on a high probability of alignment with the role description. It’s a partnership between the client and firm, intent on placing executive leadership within suitable roles. The firm will actively reach out to potential candidates to engage them in the search.
The search is conducted throughout an array of sectors — including public, private, and non-profit — to ensure your company gets the best possible candidates for the role without the limitations of factors such as sector or employment status.
How does retained executive recruiting work?
With the demand for top-level executives at an all-time high, you need to understand how an elite boutique search firm can substantially improve your organization’s future. Here’s a rundown of what to expect.
- Meeting your team — by utilizing a personal approach, you’ll meet one-on-one with those handling the recruitment process. They’ll be able to garner your company’s culture and talent needs. There’s no question of the level of professionalism as the people you meet will be the ones handling direct contact with everyone involved in the process.
- Finding potential candidates — acting as an extension of your business, the firm will meet with prospective candidates to gauge how well they’ll fit into your environment. Thanks to data-driven efforts, you’ll know exactly where your company stands in the process. Every step of the way you’ll know who they interviewed and who looks like a good match to fill the position. They understand those who align with company values and culture stay longer and, according to one study, lead your company to 22% more improved performance results and a 16% boost in your reputation.
- Quality over quantity — larger firms value telling you their greatest strengths than showing them. Most focus on growing their numbers by presenting an expansive talent pool, often without reasoning behind their choices. With an elite executive recruiting firm they have a transparent search process where you’ll gain access to real-time information coupled with a leadership consulting firm that has the agility to pivot if required.
Not only will you be kept up to date with every step of the recruitment process, but you can also rest assured that your company’s success takes precedence.
When should an executive search firm be retained?
While size isn’t an indicator of success, a boutique search firm is equipped with better resources and greater hands-on experience. They concentrate on obtaining top talent for senior-level and executive positions.
This includes:
- Board Directors
- Vice President
- Senior Vice President
- CEO
- C-Suite: CAO, COO, CFO, CTO, etc.
While most companies seek an executive search firm when one of these positions becomes vacant due to a resignation or retirement, it is also common to respond significantly sooner. Maintaining an open dialogue with your search partner all year long allows the firm to go to market quickly when required.
That said, there are at least three cases in which a business contacts an executive search firm:
- The client company doesn’t have the resources to seek out C-level candidates.
- A client company has an ongoing open position they have not successfully filled and needs specialized assistance.
- A new role is available, and the client company requires an immediate search for the right candidate to drive strategic business outcomes as soon as possible.
Understanding the Difference Between Retained and Contingent Executive Search Firms
Retained search isn’t your only option when considering the type of executive search firm you want to work with for recruiting senior-level and executive talent. Another option is contingent, which in some ways, is almost the complete opposite of retained executive search firms.
Here are the major differences you need to know.
Retained Executive Search Firms
A retained executive search firm assigns a dedicated team of researchers and associates to work on an exclusive basis until the capacity is filled. Retained recruiters conduct bi-weekly meetings to update you on where they’re at in their efforts, including candidates they reached out to, their interest level, and a compensation analysis of each.
Along with consistent communication, N2Growth makes it a point to receive direct access to a specialized dashboard containing real-time statistics of the search, making it convenient to stay informed. Should a candidate decide to leave their position, a one-year guarantee ensures a replacement at no additional cost.
Contingent Executive Search Firm
A contingent executive firm prioritizes speed rather than quality. Normally, candidates are presented to the client and the firm will receive a fee only once the candidate is placed. This can lead to short-sightedness in the search process, and in some cases a mishire due to a lack of attention to quality.
There can also be a lack of comparison analytics, resulting in recruiters focusing on quantity over quality. They’re more centered on depicting a large talent pool rather than investing the time necessary in vetting candidates.
Since contingent recruiters work with multiple clients, they can easily become buried under overwhelming workloads resulting in strained communication. Most contingent firms aren’t able to give real-time updates to clients as to where they’re at in the process due to high workloads and limited resources. While this type of search may fit some executive roles, it isn’t a logical choice in cases where the role and talent require extra time to ensure they add to the culture versus just fitting in.
N2Growth: Ranked by Forbes as a Top Retained Search Firm
Finding the right candidate for leadership roles in your organization requires much more than any traditional search strategy used in the past. If you want exceptional leadership, you need a specialized search strategy to reach and resonate with them. At N2Growth, our executive search practice focus on Senior Executive, Board, and C-Suite searches. We understand what it takes to identify, attract, assess, and place the world’s best leaders – and develop them throughout their professional careers.
N2Growth was named Best Retained Recruiting Firm by Forbes for the sixth consecutive year. Contact us to learn more about retained recruiting firms and how we can help you find the right candidate for your leadership position.
