There’s one topic in the recruitment industry that continues to divide people: the fees charged by recruiters, especially those in the executive search space, for their services.
I’m talking predominantly about the larger global blue chip search brands, but also many of the other executive search companies that present themselves in Australia.
Despite it being a hot topic for years now, little has changed, but it definitely needs to.
Research – who’s who in the zoo
Executive search used to be hard; it was hard to do the research. There were limited resources available, and often the research was very painstaking and protracted. It also required lots of intelligent people with a really strong awareness of the market just to be able to build a list of prospective candidates for any particular vacancy.
That’s not the case anymore. Ninety-eight percent, if not 99%, of white-collar executives in the Western world have a LinkedIn profile, or they’re on an organisational chart, on a company website, or they have some kind of fingerprint on the internet.
This means the research is far easier than it used to be. It’s very quick and comprehensive to do, and that fallacy or that traditional view of recruitment, has changed.
Does a big name guarantee search success?
Another way a lot of recruitment agencies justify their fee price is by saying you need a blue chip brand on the business card of the executive search professional in order to get a candidate’s attention.
In other words, if a candidate received a call from a big, global search practise, they’re more likely to accept the call than if it were from a small professional boutique executive search firm, like Arete Executive.
As someone who’s now done hundreds of executive search assignments at C level for my clients throughout Australia, I don’t agree. I think it would be fair to say that 99% of the time, the candidate couldn’t care less whether they are receiving a call from Richard Triggs at Arete Executive or from a recruiter at a Big Five search firm.
What they will do is look at the LinkedIn profile of the person that’s calling them, and as long as they look reputable and professional, the candidate will likely take the call. And not only that, the candidate will take the call seriously, and if it’s something they’re genuinely attracted to, they’ll express interest.
The recruiter is just a conduit between talent and opportunity. I think executive search professionals have a high expectation that the market should regard them in a particular light because of the fact that they are headhunters and specialists and so on and so forth.
A waste of time and money
Another common justification for recruitment fees is that it takes a long time to do the research, to engage with the candidates, and to build out a shortlist. They’re typically talking about delivering shortlists in 6, 8, even 12 weeks’ time, and the reality is that executive search can be now done very quickly. Research can be completed literally within a couple of days. Candidate engagement can be done within a further week. Securing the interest of interested parties is, again, a very quick and easy thing to do.
These traditional companies and some of their competitors in the Sydney and Melbourne marketplace, charge their clients 25%, 28%, 35%, even 40% of the package, where their recruitment fees are $140,000 on average. I personally find this a value proposition that no longer holds any weight.
The things they are using to justify their expense simply aren’t required. If you look at the remuneration being paid to the executive search professionals, it becomes clear that is where your money is going.
Put simply, clients who continue to engage and pay those high recruitment fees, are wasting their money. There are much better, much more viable options out there.
Grab the opportunity for insight
We, for example, offer a Headhunted Shortlist solution where we guarantee to deliver you a telephone interviewed and shortlist of candidates within 20 days of engagement for 7.5% of the package. When you compare that to paying 25-40%, the savings are tremendous. The speed is much faster. We guarantee the quality of candidates that are delivered.
If we don’t deliver you a minimum of three candidates that you’re delighted to interview, then you don’t pay us. There’s complete transparency of the process. We show you a spreadsheet of every person we’ve spoken to, which includes who they are, where they work, what they said about the opportunity, what they said about your organisation, and what they said about the remuneration.
We also strive to gather other information for you that could be used for your benefit, such as how you’re perceived as an employer of choice. It’s a deep, comprehensive and transparent service, which you simply can’t get with a lot of executive search organisations charging substantially higher fees.
In most cases, the search is dictated by the recruitment company rather than by the employer. In my experience, organisations who have engaged in those type of search practices have been left feeling disappointed and ripped off.
Technology has changed, especially LinkedIn. Just as technology has driven massive disruption through many other industries, it needs to do the same within the executive search space.
Executive search needs to become much more focused on delivering true value in a competitively priced environment. If the recruitment spend of your organisation is something you’re scrutinising, I would definitely suggest you explore cheaper alternatives. I’d be glad to take your call – 0403 588 517.