25: Three Things You Need To Know About Executive Recruiters

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Executive recruiters and executive search firms end up playing such a crucial role in advancing the careers and personal narratives of so many of my clients.

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But the majority get into that game, knowing very little about how executive search firms actually work and the best ways to get and stay on their radar screens.

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And that's because executive search is a relatively opaque industry.

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Unless you've worked in the search firm, they can be pretty mysterious, and many of the assumptions you might have about them could be off base.

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That was certainly the case for me when I was trying to work my way up the ladder in consumer products.

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And I got two of my jobs through executive recruiters.

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I definitely had some misunderstandings about how executive search firms work.

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And I made some mistakes.

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But you don't have to.

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I worked as a senior recruiter at a topic executive search firm for about four years.

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And now, in the next few episodes, I'm going to give you a peek behind the curtain.

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In this first episode of the series.

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I'll share three things you really should know about executive search firms and executive recruiters.

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Let's get started.

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Over the next few episodes.

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I'm going to pull back the curtain on executive search.

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The ultimate goal being that you can more effectively build mutually beneficial relationships with the executive recruiters who can help advance your career.

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If you're familiar with my background, you probably know that I worked as a marketer in consumer products and healthcare after getting an MBA at Wharton.

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It's an involved story, so I won't get into it in this episode, but when I left Neutrogena and J&J and moved from LA to Boston in 2004, I ended up working as a Senior Associate at Isaacson, Miller, a top retained executive search firm, which is headquartered in Boston.

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Isaacson, Miller focuses exclusively on placing senior leaders in mission-driven organizations.

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Think university presidents, college deans, heads of foundations, board members, that kind of thing.

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I worked in the institutional advancement practice, so I worked on searches for chief development officers and their staff, that's fundraising, and heads of alumni relations.

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In the grand scheme of things, this focus made sense, because I had worked in development for non-profits before I went to Wharton, and when I was at J&J, I was heavily involved in MBA recruiting.

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So in a way, it brought those two things together.

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Add in the fact that I do like to talk and listen for a living.

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And there you go.

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It was a pretty good match.

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I mentioned earlier in the podcast that I had gotten a couple of jobs through executive recruiters before I ended up at Isaacson, Miller.

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And while those things worked out, I had plenty of interactions with executive recruiters that I think I handled poorly.

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Just like a lot of people, I had some ideas about how executive search firms and executive recruiters worked and how to build relationships with them.

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And some of those ideas, well, they were way off target.

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It didn't take much more than a week or two of seeing how things really worked behind the scenes before I figured that out.

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And boy was I embarrassed.

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Embarrassed about the expectations I had about recruiters and what they'd potentially be willing to do for me.

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And this was all because I didn't really understand their business, the economics and the dynamics of it.

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And I don't want the same thing to happen to you.

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I don't want you to look back on your interactions with executive recruiters and be embarrassed or regretful.

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Knowing just a few things can improve the nature and outcome of those interactions.

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So here are three basic things you really need to know about executive recruiters and executive search firms.

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The first is probably the most basic thing about the business.

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There are two types of executive search firms, retained firms and contingency firms, and their economics are quite different.

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Retained executive search firms compete against one another to work exclusively with a client to fill an important role.

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Typically, they pitch their services in a competitive process and only one firm is hired or retained to fill a role or a series of roles.

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Firms that fall in this category are the big ones that you usually hear about, like Korn Ferry, Spencer Stuart and Egon Zehnder.

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Isaacson, Miller, where I worked was among the top 20 retained firms at the time, and there are plenty of smaller boutique retained search firms, many with a specific industry focus or niche.

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The other type of firm is a contingency firm.

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Contingency firms compete against one another to fill a role at a company they might have a relationship with, whether that's a long-standing relationship or a relatively new one.

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In practice, they can end up serving as agents for potential candidates and they only get paid for their work when they actually place a candidate in a role.

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Retained firms, on the other hand, get paid a fixed fee that's agreed upon in advance.

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It's typically about one-third of the first year's cash compensation for a role they've been hired to fill, and they work until the candidate is placed in the role and the search is complete, however long that might take.

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It could be a couple of months.

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It could be many.

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Most of the mid and senior-level MBAs I work with are going to want to target working with retained executive search firms, which generally end up working on the higher status roles in name brand companies that many MBAs and up-and-coming professionals are shooting for.

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So that leads me to the second point.

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If you're interacting with retained firms, you need to keep the following in mind and it's very important.

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They don't work for you.

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They work for and are accountable to their clients, the people paying the bill.

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Now, if you've had any interactions with retained executive recruiters and were a candidate or a potential candidate, it may have felt like a recruiter at a retained firm was working for you.

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But it's important to keep in mind that when push comes to shove, they're looking out for their client's best interests.

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Not necessarily yours.

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That's not to say that retained executive recruiters will treat you unethically.

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They won't.

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They rely on the goodwill and trust of their networks to do their work.

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Their reputations and connections are their value.

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The people I worked with at Isaacson, Miller cared about their clients, their candidates, and the people in their network.

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They wouldn't have done anything to breach the trust or confidence they had built with those stakeholders over time.

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But still, recruiters are, in the end, accountable to their clients first.

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I remember a time when I was working on a search when the semi-finalist for a role took a thoughtful pause in one of our conversations and said, So, Doug, out of curiosity, who are you really working for?" We were starting to talk more seriously about compensation related to the role she was considering and being considered for, so it was a natural thing to wonder about.

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And my response was,"If you're asking me if I'm a buyer's agent or a seller's agent, then I'm a buyer's agent." I was representing the client.

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That didn't mean that I couldn't have a conversation in confidence with a candidate or that I couldn't play a role as a fair-minded intermediary between a candidate and a client.

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But when push came to shove, I needed to represent my client's interests above all others.

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And you, dear listener, would do well to keep this in mind.

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The recruiters don't work for you.

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They have a client who is paying the bills, and then they have their network, which makes it possible for them to serve their clients.

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You are a part of their network, which is incredibly valuable to them and they wouldn't want to risk degrading it, but you don't compensate them for their work.

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So, in practical terms, what does this mean?

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This leads me to the third point.

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Retained executive recruiters might not have a lot of time for you, and they're definitely not career coaches.

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As I mentioned, retained executive recruiters are paid a fixed fee to fill critical roles for their client with the best possible candidate.

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Ideally, that candidate is of a higher quality than the client would be able to attract on their own.

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The firms are also expected to manage the networking and recruiting process in a manner that reflects well on the client.

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The key here is that they're paid a fixed fee to do all of that.

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That means retained executive recruiters have an economic incentive to close their searches as quickly as they can.

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The less time and fewer resources they use to place a candidate in a role, the more profit they make.

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And while recruiters may engage you in conversations about your career aspirations, more often than not, it will be in service of closing a current search or understanding where they might potentially place you in the future, assuming their retained to fill a role for which you would be a good match.

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In the process of doing that, they may help you by providing a perspective on your career, and it may feel a little like career coaching.

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But in the end, that's not the point of it.

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Now.

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I don't want to make recruiters seem like cold-blooded mercenaries.

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Virtually all of the recruiters I worked with were genuinely interested in serving their clients and their networks to the best of their abilities and building strong relationships with both.

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But given that they're paid a fixed fee, anything that might slow a recruiter down and keep them from closing their current searches as quickly as they can is essentially taking money out of their pocket.

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So don't expect a recruiter at a retained firm to drop everything they're doing to talk to you about how you can move ahead in your career.

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And they won't help you, and I'll put this in quotes,"find a job." They'll be more focused on determining if you're a compelling candidate for the searches they currently have or anticipate having in the not so far off future.

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So, what does this all mean for you when it comes to advancing your career?

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If like many of my clients you're targeting senior-level corporate roles as a part of your career plan, you're more likely than not going to end up working with a retained executive search firm or two, or several.

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As a general rule, they'll seek you out when they need you, either as a potential candidate in one of their searches or as a potential source.

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A source is someone in a recruiter's network who helps them identify candidates for their clients.

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And you could potentially be both of those things at the same time.

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But if you aren't either one of those things, then you probably won't get a call or an email from a recruiter.

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It doesn't mean that they've lost interest in you.

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It just means that a conversation with you wouldn't help them close one of their current searches as quickly and efficiently as possible, and by doing so be as profitable as possible.

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This is where I see the most frustration with clients when it comes to building relationships with recruiters.

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They're frustrated with the fact that recruiters seem to run hot and cold.

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And if they're retained recruiters, that's pretty much what you should expect from them.

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If you can help them close a search, they're working on, either as a potential source or candidate, then they'll be all ears.

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If not, then you might not hear from them or they might take a long time to respond to your email, DM or call.

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And it's not necessarily a reflection on you, your qualifications or your abilities.

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It's just how the executive search game is played.

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In future episodes.

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I'll talk more about how executive search firms are organized and how to get on the radar screens of the right recruiters and build strong relationships with them over time.

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If this episode has been helpful, please share it with a friend who could benefit from listening to it.

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I'm sure you've got a few.

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And consider leaving a review.

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They really make a difference.

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There's a link in the show notes and I'd be really grateful.

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Talk soon.