Strategy Safari: Executive Recruiting Sets a Bad Example for All Recruiting

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Sep 14, 2020
This article is part of a series called Strategy Safari.

As a recruiting professional, you know the struggles of getting people to follow some sort of process. Decision-makers try to skip steps, interview panelists insist on asking illegal questions, and hiring managers want to hire someone who thinks (and looks) like them under the guise of “culture fit.” Or their son grew up with the candidate. Or they like that the candidate went to their school. Or any other factor that has little to no impact on whether someone can actually do the job.

Where does this constant struggle come from?

Some of it stems from some onerous process requirements (whether self-imposed or mandated). Some of it stems from some basic human need to rebel when told to follow the rules. But really, a lot of it stems from the bad example set by executive recruiting.

Justifying the Cost

The executive search industry is a monster. Globally, it generated $15.6B USD in revenue in 2018, and a quarter of all executive search firms are located in the United States, with Korn Ferry being the largest. Korn Ferry alone pulled in $1B in revenue, with the vast majority of their business being conducted in North America.

That’s a lot of money changing hands, considering that chief executives comprised only 0.2% of all U.S. hires in 2019. The market is competitive, with the perceived shortage of top executive talent driving practices that are closer to wooing a movie star vs hiring an employee per EEOC guidelines.

A quick search of how executive search firms justify their cost boils down to three primary areas:

  • Supply and Demand. There are only so many candidates for an executive position, so you need an expert who has the right network.
  • Speciality. There is a science — nay, an art — to executive search, and you need an expert who won’t spook the candidates.
  • Proaction. Executive search firms are far more proactive and will hand-pick your perfect candidate for you.

So basically, executives are a rare breed that need to be catered to and for whom a regular ole recruiting process just wouldn’t do. I mean, would you really expect a CEO candidate to fill out an application?

The Trickle-Down Effect

Because executives experience a radically different recruitment process, is it any wonder that they fail to see the value in a standardized process? After all, they were actively sought out — executive recruiters build and maintain relationships with a core group of prospects in anticipation of that next placement. That means some serious ego-stroking.

The executive candidate most likely talked openly about their commute, their family, the work-life balance issues. If they did an assessment, it was probably in an assessment center vs an online test that took hours at a time. 

They were also wined and dined, meeting with a number of key stakeholders across the organization over weeks, if not months. They had access to people to answer all of their questions and were given the opportunity to carefully consider their options and to name their price.

In short, an executive search is the ultimate candidate-centric experience.

This is why most executives have little patience for compliance in the hiring process. They probably hand-picked their direct reports, and those people probably used all their influence to “expedite” the process for their teams. It’s a trickle-down effect of what is both expected and tolerated —  and it can impact the effectiveness of any internal recruiting team. 

Perfectly Imperfect

Reading through the executive recruiting process, you might think that’s how all recruiting should happen! Think about it: relationship-based sourcing, unstructured interviews, in-depth conversations about personal considerations. Perfect, right? 

Well, maybe not so much.

Executive searches are not all rainbow and unicorns, and the outcomes are not always what an organization might want for all candidates:

Issue #1: Time. The average time to fill for an executive search is 12 to 26 weeks, with an additional 12 to 24 weeks for the notice period if the executive is leaving a similar position. That’s a long time to wait for someone to start doing their job.

Issue #2: ROI. Executives don’t typically stay in their roles at any one organization for very long. The median tenure for a CEO is about five years, and in 2019, more than 1,400 CEOs left their posts. Once a CEO leaves, there is typically a ripple effect of turnover as the new CEO brings in their own people. Factor in the costs for any transformation a new leader is hired to bring, and that’s a pretty high price tag for what you get. You could argue that five years is “worth it,” but it’s also disruptive. 

Issue #3: Equity. I’ve written before about the disappointing statistics around diversity in the leadership ranks, and I think much of this can be attributed to the fact that there is no one holding executive recruiting accountable. Search firms are measured on their ability to fill a role, not necessarily on the diversity of their candidate pool or placements. And relying on a small network of executive candidates only helps exacerbate this issue.

The Solution

To close the gap between executive and non-executive recruiting experiences, the best solution might be to help the two processes meet in the middle a little bit. Scale some of the good bits of executive recruiting, such as making candidates feel wanted, encouraging recruiters to build networks and relationships, and giving them the time and resources to source appropriately. Also provide candidates enough information and flexibility to make the right choice for both themselves and the organization. All of which means investing in updated tech for automation where it’s appropriate and working with hiring managers to understand better what they’re looking for before posting a job.

On the executive recruiting side, it’s time for search firms and companies to be part of the solution for helping ensure all selections are made for the right reasons. It means reigning in some of those questionable methods that search firms use as tricks of the trade. It means transparency around EEOC or general HR complaints about hiring practices. 

It also means measuring the success of search firms not just on their ability to fill a role but on their track record of diversity and helping organizations expand their candidate comfort zone. And it means recruiting leaders helping to educate executives about why the process is built the way it is — and not making exceptions if someone whines. It’s important to be flexible, but do it for the right reasons.

No recruiting process is perfect, because humans are imperfect. It takes a strong leader to support a standard, structured process at all levels of the organization. And it takes a strong recruiting team to take a hard look at their current process and admit there are improvements to make. 

Click here for more Strategy Safari columns.

This article is part of a series called Strategy Safari.
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