Searching for the right Executive Search Firm

By: Babes T. Guevara

April 2014

American Chamber of Commerce of the Philippines (AMCHAM)

When the entry to a new business is quick and easy and the exit forebodes the same, expect a lot of others to jump into the fray, be on the prowl by grabbing as many customers and employees from flourishing competitors as fast as possible, dive down in their pricing, take short-cuts and even forego work ethics in order to quickly recover their investment. How easy can that be?

Not too many industries, specially in the consulting field, can be as promising and attractive as the executive search industry because it can service all industries. Thus, when certain industries are down, there is no cause for alarm since redemption comes from the other industries that are on the other hand doing well during the same period.

This is why executive recruitment consulting, born only sometime in the mid 70’s in the Philippines, has become a flourishing industry where the players consist of local companies, foreign companies, offshore companies that have local tie ups, training and audit firms offering executive search services as well. At the last count, there are about 80 such companies including those who freelance, work from home, use local dummies as “fronts’ to sanitize their business and dabble in low level recruitment but mistakenly calling it “headhunting”.

What has also spurred the proliferation of the so-called “headhunters” is the welcome emergence of the BPO and the shared services industries sometime during the turn of the millennium. This industry offered massive opportunities for volume hiring of call center agents by the thousands and, as a matter of course, led to offers for managerial and executive searches. Not all the companies were prepared to wait for internal hires to be ready for promotion. Thus, not a few of the call center agent recruiters “levelled up” and dabbled in executive search as well, unable to understand the big difference between lower level recruitment and executive recruitment.

It is lamentable to report that today, a lot of malpractices have gone unabated, in what was once touted to be a highly professional consulting practice in the Philippines. Perhaps the pressure to deliver the headcount in most companies have also made them understandably vulnerable to hiring managers and executives as quickly as possible. They can’t afford to miss their targets or lose vital business opportunities. Ironically, they also end up losing the same managers just as quickly.

If you are already using a headhunter or intend to use one, perhaps it is time to know if you are using the right executive search company if, at one time or another you have experienced situations similar to these examples:

  • Hiring your Financial Controller who, upon regularization, declares he is not a college graduate after all;

  • Going through as many as 20 interviews to find a Chief Investment Officer yet no one seems to fit since you’ve instead been referred practicing accountants, auditors and lawyers (?) for the job;

  • Offering a salary rate to your new Sales Director, only to find out two months later that he bloated his actual pay during your salary negotiations and now you have distortions in your salary structure due that error;

  • Discovering that the Human Resources Director who’s been in the post for a year has had a series of past sexual harassment cases behind him;

  • Receiving alarming reports from your plant personnel about the poor interpersonal relations of your Manufacturing Director who unbeknownst to you has been the reason for a high turnover of staff in his past job.

In these examples, your executive search firms should have done thorough background checks on the candidates they’ve presented, personally discussed the specifications you have set for your vacancy, ensured where to best find the candidates, actively participated in salary negotiations and done a salary check on the candidate, used assessment tools including in depth interviews to fully evaluate the candidates.

If there’s such a thing as finding the wrong person for your critical vacancy, then there is also such as a thing as using the wrong executive search firm. Not surprisingly, quite a number of companies have been victims of these circumstances but have preferred to keep mum about it because it is an embarrassment to “be had”, to not have known any better or to have been an unwitting party to misrepresentation (by the executive search firm).

But here’s the good news. You can also protect yourself from unscrupulous executive search firms by asking the simplest but most potent questions and test for their credibility, competence and integrity. In a FACE TO FACE meeting, ask the executive search consultant:

  1. How long have you been in business?

  2. Who are the people behind the firm, i.e., do they have previous relevant experiences?

  3. If they can’t disclose their current clients due confidentiality, ask the size of their clients’ businesses, their ownerships, the types of jobs they’ve handled for them, the volume of placements they have yearly. Ask about their so-called “success rate”? Are any of their clients your close competitor?

  4. What resources do they have at work like a computerized data bank (how big AND updated is it?), a website, their research team, any tie ups abroad for sourcing capability and their budgets for representation expenses, etc. (not a few headhunters scrimp in meeting executive talents outside their offices!)?

  5. What are the profiles or credentials of the consultant/s who will personally handle your account?

  6. What exact recruitment process do they follow? How do they conduct their evaluation? Do they run background checks? Do they use assessment tools? More importantly, how do they source talents?

  7. How long will it take for them to shortlist candidates for you? They can be too quick, enough for you suspect they’re just referring the same talents over and over to various clients or they’re too slow, because they’re overloaded and can’t attend to your need as quickly but will just not admit it!

  8. Is there a guaranty, i.e., if the placed talent doesn’t work out, at what instance will they replace the person FOR FREE?

  9. How do you differentiate yourself from the other executive search firms? In short, why should we do business with you and not with some other firm?

  10. Finally, ask for a list of satisfied clients and talents placed and even get their testimonials.

And here’s the acid test. Ask your prospective executive search firm, do they tap a candidate again once they’ve placed him/her with a client? Because if they can’t give you a definite answer, chances are, they can and will tap them again anytime they have another client just so that they can collect fees again. Worse, there are many reported instances where unscrupulous executive search firms tap talents from the very client companies they are working for, shockingly even during the time they’re working for the client.

Always, always have a formal written agreement with the executive search firm that not only states what their fees are but also their scope of service, which they are committed to deliver. Not having one can cause disagreements later on, specially on fees. Having a contract gives a formal mandate to the firm to represent you in the marketplace. We know that time and again, not a few unscrupulous firms, are out there collecting resumes from executives, without having any formal contracts or engagements from clients.

While many companies prefer to use more than one executive search firm for their vacancy, a word of caution. This is a double bladed situation, a case of too many cooks spoiling the broth. A company looking to fill a sensitive position doesn’t want either their internal organization to know they’re filling it from the outside OR they certainly don’t want competition to know that they’ve lost a top executive. Limiting the search to two at most three reliable executive search firms therefore makes sense. But engaging several executive search firms simultaneously, leaves the client company with the tedious task of monitoring who to give the credit to , in the event two or more executive recruitment firms endorse the same candidate whom the client eventually chooses to hire. More importantly, it undermines the attractiveness of the client as an employer since it is seen to be scrambling to find the right person.

If you’re on the other side of the fence and are a prospective talent yourself, you can ask question numbers 1-10, except perhaps for question number 8 as this concerns guaranty period for the client.

But you will know you’re in competent and professional hands if your executive search firm practices the following:

  • Always advises you of a job vacancy with its clients first before they even endorse your resume to them;

  • Conducts a personal, not a casual telephone interview (which is, by the way, more appropriate when screening call center agents and not executive talents ), before you are recommended to their client;

  • Gets your clearance to conduct background checks in order not to jeopardize your current job;

  • Thoroughly briefs you about the job opening, the client company that’s hiring, etc. before you are scheduled for interview;

  • Promotes confidentiality at all times;

  • Respects your time and your decision whether to proceed with their client or not.

  • Provides you timely feedback on the outcome of the search for which you were considered.

Competition can always bring out the best among its players specially when the investment risks are high and the stockholders take a long view of its business prospects. While the reverse happens in a consulting practice such as executive recruitment consulting, where only minimal investments are needed to set up shop, it does not preclude those who’ve been in the executive search industry for a long time to do its utmost to protect its integrity. After all, careers can be promoted or ruined by executive search firms. And companies can have thriving businesses when they have the best available talents placed by executive search firms.