You’ve engaged a top retained search firm for a high profile C-Level executive search. You willingly pay a retained of upwards of $150,000 in good faith. The retained firm has conducted numerous searches that are practically identical to yours. Better yet, this particular firm specializes in your industry and the senior partner handling your search hails from that same vertical – even golfs regularly with industry’s VIPs. However, the moment the firm starts presenting executives you become concerned. The candidates aren’t just a little off. They’re so far off you wonder why they were presented in the first place. Well, you are not alone. On average, 40% of retained engagements fail to complete, wasting hundreds of thousands of dollars in retained search fees. While that level of waste clearly is unacceptable in today’s economic environment, it remains the norm.
Problems with the retained search model include:
- Senior partners focus on securing new business, not on execution
- Junior associates do most of the actual recruiting
- Their research is often amateurish, missing star candidates
- Specialization in your industry does more harm than good: they cannot recruit from important target companies that were clients
- Golfing with candidates does nothing: no top candidate would ever accept an opportunity just because a retained partner said so
- You never really know what they’re doing for all that money: they provide little transparency
- They never hand over all the research at the end of the engagement, even though your retainer paid for it
Retained firms can’t help it. The model is flawed. It is based on the illusion that the more you pay the more you get. The truth is retained search is expensive: you always pay an average of 30-33% of total compensation, even when they don’t deliver the candidate you need. And when they come up short, you pay even more in wasted time, lost productivity, and lost revenue. The solution is easy. Invest in a pay-as-you-go model, one that can save you money at the same time it consistently delivers quality candidates. You’re free to stop at any time. But you won’t want to because will have found a better way.
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