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The Job Blog

The Headhunting of today, Executive Search

The practice of removing or decapitating the entire head of a human being has been practiced across Africa, India, Asia and Eastern Europe as late as 1912. Montenegro the pearl of the Adriatic had the last European documented cases circa 1910-1912.

The reasons vary from culture to culture, a trophy, spiritual or cannibalistic. The practice is now far more widespread albeit under a different guise, the much more tasteful name of executive search.

How this ritualistic act has come to lend its name to the much more seductive art of executive search is a point of contention. It is the one area of the recruitment industry that still holds on to some mystique for the general public.

Like most professions the global executive search industry suffered in 2008, but showed signs of recovery and growth in 2009. The value of the market and deals done remained approximately the same, but the number of deals dropped. This has meant that firms were being engaged to seek out a smaller number of higher caliber individuals.

The value of the global executive search market hovered around US$17 billion globally in the year 2009 more recently it tipped just over US$18 billion in 2012.

A recent study showing the trends over the last few years in the USA Executive Search market which is the largest such market in world showed some downward pressure on some the industry’s key indicators.

(A) The average time to hire for example has decreased from 140 calendar days to 120 calendar days.

(B) The number of female candidates hired was 23% now 30%

(C) Candidates interviewed per assignment decreased from 6.5 to 5.3

(D) Minority candidates hired rose slightly from 21% to 22%

There are several reasons why firms engage the services of executive search companies to seek out top talent such as the requirement for a confidential search, emerging skills or specific technologies that are key to the role, or that firms simply don’t have the expertise to sufficiently source a candidate pool for upper echelon level roles.

A very telling statistic that is widely quoted perhaps gives us a unique insight into why executive search firms will always play a part in the quest for talent. It has been shown that 60% of the jobs for the 21st century require skills possessed by 20% of the workforce.

Firms who wish to compete effectively need to look at new revenue streams, latch on trends in their industry as well as globally which offer scope to growth. One example currently in vogue would be the profession of social media marketers. It is difficult to find anyone working in this space with a résumé that goes back further than 10 years as the market is so new. But it increasingly devours a larger slice of a firms overall marketing budget. It trends quicker and faster than all other mediums and requires a dedicated resource to perform effectively in this space. The new money on the horizon has always been the younger generation and the key to unlocking this could very well be social media. Finding a social media guru can be quite difficult without help.

Executive Search falls broadly within two categories, that of Retained and Contingency executive search. Retained search services are exclusive assignments given to an executive search firm; the prescribed fees are split up into a retainer paid in advance and then a schedule of payments as the process gains momentum, with the balance being paid upon successful completion of the assignment.

Contingency search predominantly carries no retainer for the search and can be on an exclusive basis or indeed open to a number of firms. The structure of executive search firms has been styled very closely on the legal profession. You have a team of researchers who are given a category or industry to become subject matter experts; they build up industry knowledge, identify thought leaders, look at trends and develop leads through research.

They will then present their findings to the associate with whom they work with. The associate will be responsible for the stakeholder management aspect, business development, interview process and closing the deal. They have usually come up the path of being a researcher for a number of years so they have excellent industry knowledge and credentials.

The market for executive search has suffered like many others; the global crash resulted in a significant drop in retained searches and a spike in contingency. Firms had less of an appetite to absorb up front recruiting costs for Senior Executives.

This prompted another growing trend that has recently gained traction, that of “taming the headhunter”. Increasingly firms are more cost conscious but the competitive need for top talent is still there. The solution more recently has been to source a head hunter to come and work in house in your firm. For those headhunters who are tired of eating what they kill, use their hunting skills but revert to becoming more a farmer once they move internally. They are given a list of assignments and are focused on the candidate search as well as the execution of that assignment. They no longer have to hunt for both new business and candidates; they must however assist with maintaining the workforce for the farm. The firm / farm benefit from this as their fees are significantly reduced while harnessing the skill set they would normally pay a much higher fee for.

A significant factor which has shaped every type of recruitment has been the stellar growth and usage uptake of social media such as Facebook, Twitter and LinkedIn to name some of the most popular. Social media has touched or influenced the lives of billions of people around the planet. Everyone from government ministers to pop stars fashionably tweet on a daily basis catapulting them and their thoughts to a global audience. Ultimately making them more identifiable, traceable and reachable.

Companies themselves are providing plenty of online information about their own employees. A company trying to get a higher Google ranking for their business page will populate the home page with useful content such as profiles and contact details of their senior management team to bolster confidence and showcase their talent. This is ideal hunting territory for headhunters or researchers looking to gather market intelligence.

Due to this increased global accessibility of talent, finding talent is no longer the hardship it once was. It is now more important to be able to sell the proposition to the candidate and close the deal than having clinical industry knowledge and research skills, although still important, it is not the leading trait of a headhunter it once was.

Headhunters have been around for hundreds of years in once sense or another. I don’t foresee this changing. However the tools and methods they use will understandably evolve. The engagements they are given will also mirror the complexities of the global market and the new skills of tomorrow will become the targets of the hunters of today.