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6 min read

The Limits of Executive Search Firms (And Who You Should Use Instead)

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There are plenty of executive search firms out there of all different sizes. For example, there are large agencies that have off-the-charts brand recognition. While virtually all of them have impeccable reputations, they mainly cater to Fortune 500 corporations.

If your business isn’t a member of this elite club, it could easily be brushed aside for a more lucrative client. Besides, these firms are usually very expensive.

On the other hand, much smaller boutique search firms excel at giving their clients a highly individualised experience. 

While it might be easy to dismiss smaller companies due to their size, these agencies often offer significant advantages over their much larger counterparts.

The challenges of legacy executive recruitment

Navigating the complexities of hiring new team members can be challenging for startups to do in-house without exceeding their budget. 

However, many give it a go anyway because so many legacy recruiting agencies do such a poor job.

With no licencing requirements and few barriers to entry, virtually anyone can enter the recruiting game. This inexperience often leads to bad hires or an inability to hire in the first place.

Here are some reasons not to use traditional search firms:

Failure to hire

Nearly 40% of all executive searches fail to place a candidate in the needed position. 

One major reason for this massive breakdown of a once viable system is the continued use of unorganised and poorly managed hiring processes.

You’d think that companies wouldn’t be able to keep positions open for too long without suffering significant business setbacks. The fact of the matter is, failure to hire happens with alarming regularity, and it’s only getting worse.

Outdated hiring practises

Many firms continue to use outdated and inefficient hiring practices, such as hopelessly antiquated job boards. 

This includes a failure to leverage the power of technological advances that can considerably improve the process, such as data analytics and AI.

Locked into long-term contracts

Some hiring agencies require you to sign long-term contracts where you’re locked into using the firm for everyone you hire.

However, some companies looking for talent don’t necessarily need to pay recruiting services for each and every job. They might decide to do some hiring in-house, and being bound to the nightmare of a long-lasting contract prevents this from happening.

Too expensive

All too many traditional recruiting firms charge their clients an excessive amount for substandard results.

It shouldn’t be this way. That’s because any company that enlists the assistance of a recruiter that fully embraces digital transformation should see substantial cost savings over the traditional way of hiring.

Hiring the wrong candidate

The failure of executive recruiting doesn’t just extend to not being able to hire in the first place but also to hiring the wrong candidate. 

Because executives receive a substantial salary and hefty benefits, a bad hire can cost you up to 30% of the job holder’s first year’s salary.

This doesn’t even include the amount you’ll invest in onboarding and other aspects of the hiring process. There might also be severance packages to consider, making the monetary costs even higher.

The loss of trust

The biggest blow to your company might not be measurable in terms of money. 

That’s because when an enterprise repeatedly fails to hire and retain a major company role, employees and other stakeholders start to lose faith in its mission. Team members might begin to disengage with company leaders and consequently become less invested in growing the organisation.

Legacy executive search firms: pros and cons

It is worth noting that there are several categories of executive search firms, which we will detail below, along with the pros and cons of using each type. 

Retained Search Firms

A retained search firm charges an upfront fee. It then works closely with a client company to carefully construct an ideal candidate profile.

A retained search firm typically spends a lot of time getting to intimately know a client’s business from every conceivable angle. This includes the enterprise’s strategic objectives, its inner workings, the thought processes of C-suite members, and other things.

The firm then searches for the most highly qualified individuals for the role across their networks.

Pros

These kinds of firms use advanced assessment tools to narrow the possibilities to a select group of prospects. This results in the client being given a list of only the very best applicants––the “cream of the crop.”

Having a shortlist of meticulously curated candidates saves a company from looking at an endless parade of candidates. Most of them probably aren’t even viable possibilities anyway. Because of this in-depth work, retained search agencies usually only take on a select few clients at a time. This allows for a lot more in-depth research.

They generally offer placement guarantees. That means if a candidate doesn’t work out, they will find an alternate candidate at no additional cost.

Cons

Retained search isn’t cheap, often requiring a hefty upfront retainer fee. Sometimes, this amount can be up to 50% of the candidate’s first-year salary.

Additionally, some of these firms demand further payments at specific milestones, such as when the agency comes up with its list of qualified candidates or when interviews start. For some smaller companies, forking over all this cash might prove to be prohibitively expensive.

Contingency Search Firms

With a contingency search firm, it’s all about quantity over quality. 

These kinds of recruiting agencies work with many open positions at once. To do this, they use a database of known candidates, culling a bunch of possibilities from it and giving them to the client for their consideration.

A contingency search firm doesn’t get paid until they actually place a candidate in the role. Their search fees usually amount to 20% of the candidate’s salary.

Pros

The beauty of a contingency search firm is there are no upfront fees, and they don’t require you to sign an exclusive contract. This reduces the risks for a client company.

Cons

Some HR experts characterise this method of recruiting as “throwing CVs against a wall.” 

A contingency recruiter has to work fast, getting as many candidates as possible into the hands of a client. Unfortunately, this way of working often doesn’t produce the best results.

Because the relationship between the recruiter and client is merely transactional, it doesn’t allow for a more collaborative partnership that might be more fruitful.

Top reasons to try an alternative to executive search firms

Access to a diverse candidate pool

When you partner with an alternative executive search firm like Juggle, you’ll get access to a much more diverse talent pool than you would with legacy recruiters. In fact, 70% of their placements are women.

Juggle’s mission is deeply rooted in gender diversity. The company wants to see women represented equally in business leadership.

Juggle believes that challenging how people work plays a crucial role in bringing about this much-needed change. If individuals can work on their own terms regardless of their gender, they’ll have more flexibility to structure a career that fits in with their lifestyle.

They have a mission metric they swear by, which is 65 to 70% female placements. 

Candidates get access to opportunities they wouldn’t necessarily get through a legacy search firm. For example, experienced mums looking to get back into the workforce.

The agency carefully vets companies who want to be part of the platform to see if they’re genuinely committed to offering flexible work options. That way, Juggle knows these companies are making gender equality a priority.

Remove unconscious bias

Juggle anonymises all candidate data until the interview stage, thus reducing the insidious unconscious bias perpetuating gender inequality. Most legacy search firms don’t do this, resulting in a flawed interview process.

Businesses can only see an individual’s initials until the interview takes place. This helps companies make decisions solely based on merit.

Benefit from AI-powered recruitment

Juggle is an AI-driven technology company, making our recruitment process four times faster than the industry standard. Our platform plus the talent team do all the CV sifting for customers, giving them a curated list of possibilities.

AI helps Juggle figure out how well a candidate is suited for a particular role and whether they have the required skills to do the job. Conversely, it also helps them ascertain if this is the right job for the applicant.

Because there are a dizzying array of factors that feed into these questions, the company continues to monitor, evaluate, and tweak the process to ensure a high rate of accuracy. This helps keep their operations up to date and responsive to your needs.

Engage in transparent negotiations

Juggle is upfront about candidates’ salary expectations. There are no “cloak and dagger” negotiations that legacy search firms love to engage in. This takes some of the stress out of hiring, making it less of a game and more about two potential collaborators exploring their potential for partnership.

Break free of the limitations of legacy hiring with Juggle

Juggle is a brand-new way to hire high-quality talent quickly, with no long-term contracts or exorbitant fees.

Get started today!

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