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Most Frequently Asked Questions

Executive Search is an effective process to identify high calibre executives for specific positions.

The client company partners with an Executive Search firm whose processes include fully understanding client requirements and specifications.

The core process is a thorough and exhaustive “talent market research” to surface qualified candidates. Interviews and assessments of qualified candidates are then made and the best 3 or 4 candidates are then endorsed to the client.

As a value add, the Executive Search firm conducts due diligence or reference checks on the chosen candidate to ensure that the information shared on the CVs and during interviews are true.

These reference checks will likewise cover strengths and areas for improvements which clients find useful in managing its career and talent development program.

The company in need of executive talents to fill up confidential vacancies, hard-to-fill positions or newly-created positions is also known as Client company.

The executive search process is initiated by the Client company by selecting a reputable and reliable search firm which the Client company can entrust with confidential information.

At this stage, Linkedin may have its following among professionals in the corporate world but is still quite limited. Most senior executives cannot be found in Linkedin.

The core process involving a thorough and exhaustive “talent market research” and evaluation which is done by experienced Consultants is in fact the value-add of professional executive search firms. It is not the Linkedin mission.

You have no financial obligation to the search firm. This is because the executive search process is initiated by the Client company. The client pays for the services of the search firm.

Avoid dealing with just any search firm. Choose any search firm affiliated with PAESPI. They are advocates of professionalism and ethical practices. They are sworn to a Code of Ethics and have been exposing malpractices in the industry.

When used?

Clients normally enter into a Retained and Exclusive Search engagement for senior or highly sensitive positions requiring utmost discretion and confidentiality. Examples are :

•  An incumbent will be replaced but will only be advised once a replacement is found.

•  A new position has been created but an executive from the outside is required.

•  Company A does not want its competitors to know its re-organizational plans.

•  Company B wants to conduct the hiring discreetly so as not to distract the organization.

Why Exclusive?

Exclusivity is a must to keep the search confidential. Having a non-exclusive arrangement i.e. using two or more search firms, is fraught with leakage risks.

What are the fees and terms of payment?

Overseas firms charge 1/3 of the gross annual guaranteed cash compensation. Firms operating locally (purely local or foreign subsidiary) charge less.

Under this arrangement, progressive payments are made, 1st, upon signing of contract; 2nd, upon presentation of short listed candidates; and 3rd, upon acceptance of the Job Offer.

Advantages of a retained and exclusive engagement

•  Top notch talents who are happy in their current situation are usually “not in the market”. They certainly would not want their names to be linked with executive search interviews, lest the information finds its way to their present company.

•  They are therefore quite selective in accepting invitations to explore career opportunities. However, when they are contacted by a reputable search firm, assured that the search is a retained and exclusive engagement and therefore very confidential, they are more inclined to accept the invitation.

To these executives, a retained search engagement conveys that the company is serious, the position is critical and the company is not scrimping on professional fees.

•  Retained and Exclusive engagements are always handled by senior and seasoned Consultants. These Consultants not only have the credibility and experience to deal with senior executives, they have the competence to make professional assessments that will help ensure the successful placement of the most suitable and capable candidate.

•  Retained and exclusive engagements assure the client that the search is done thoroughly and follows time-tested processes. No short cuts are made for the sake of speed.

This is an engagement where the search firm gets paid only if the firm successfully fills a requirement.

When is it appropriate to use?

Ideal for non-confidential and mid-level requirements. Also appropriate for generic positions which are likely to be found in the firm’s data bank.

How best to use this search model :

It is best to partner with only one search firm with a proven track record and one you can trust rather than simultaneously farming the requirement to many search firms.

This way, the search firm will be encouraged to follow a tried and tested search process :

•  Understanding the search specifications

•  Conducting industry and data bank research

•  Screening candidates; meeting the most promising ones and preparing a written assessment

•  Presenting only the most suitable and interested candidates to you

•  Conducting a due diligence for the chosen candidate

Should you adopt this model, it is best that you give the search partner a deadline, failing in which you should have the option to select a second search firm. A reasonable deadline is 4 weeks.

A second model which is quite common among companies not familiar with search processes is awarding the search simultaneously to several search firms.

This model, known as “hit and miss”, encourages so-called search firms to send you either raw CVs or superficially processed CVs. Since they have no assurance of getting paid, their priority is to send as many CVs to claim ownership of said CVs . This way, they increase their chances of being “successful”.

The above-mentioned model has been one of the culprits behind malpractices in the industry. When there are no processes, it becomes a hit-and-miss affair. When firms are encouraged to compete based on speed and have no assurance of being paid, short cuts happen.

The loser is the client.

Not only does it not have any assurance that they are getting the best candidates, the client also incurs the hidden cost of screening, interviewing, and, assessing – tasks which should have been done in the first place by the so-called search firm.

Yes, but make sure this is included in the contract to protect you from unscrupulous search firms. The usual guarantee is 6 months during which time the client company should be in a position to determine whether to regularize the executive, extend his probationary period or let him go. Should the executive be asked to leave within the six-month period for performance reasons, the search firm is under obligation to replace the executive at no extra cost, except out-of-pocket expenses.

Please note though that the guarantee will not apply if the departure of the executive is a result of an unplanned relocation, unplanned re-organization, take over by another company or changes in responsibilities or designation which were not spelled out in the job offer.

“Off limits” is an ethical practice wherein a search firm will declare with a potential client that it can not tap executive talents from its clientele. Unfortunately, this is one of the malpractices of many search firms who victimize their own clients by “poaching from the hand that feeds them”. As a client, you must be on guard because the unethical search firm knows your organization and executive talents and can easily poach from you.

“Off limits” can likewise be invoked by a client to disallow a search firm from tapping from certain companies e.g. competitors or from companies belonging to the same group of companies.

First, ensure that you have an accreditation process for service providers. This way, you can ensure that they are SEC-registered and therefore not the fly-by-night types.

Second, ensure that in the accreditation process, they present their own Code of Ethics. If they do not have any, have them sign an undertaking that they will abide by a Code of Ethics. Feel free to use PAESPI’s Code of Ethics or an adaptation.

And finally, we invite you to become one of our growing list of Corporate Advocacy Partners. There are no fees. Just a commitment to deal only with ethical search firms as well as your permission to have your Company’s name and logo to be part of our Advocacy Partners.