Companies & Industries

Does Your Company Really Need a Headhunter?


In certain situations, the answer is: You bet. But too many employers overlook internal talent—which forces their best performers to flee

"Now what?"

Those are typically the first words uttered by a line manager, division executive, C-suite leader and/or human resources officer soon after an especially talented performer retires, goes elsewhere, or otherwise leaves a glaring hole in executive management.

At many organizations—far too many—the reflexive reaction is to retain a headhunter and wait for the recruiter to start introducing qualified candidates. But the question of who should be considered to fill the role demands far more consideration and due diligence than many corporations are prepared to invest, and that's a mistake.

When executive search began some 80 years ago at management-consulting firms, it was envisioned as a resource to be used sparingly by employers that, for some reason, couldn't fill a key role through the promotion of a current employee (BusinessWeek, 1/29/08). It was assumed that employers would be continually investing in workforce management and leadership development, growing their own executives and leveraging external search to augment that focus on talent and succession.

Yet too few companies make that talent investment, so they end up routinely paying a premium to lure exceptional managers from outside. And because of the prevalence with which companies look beyond their walls for talent, it has become almost institutionalized to overlook internal candidates. That, in turn, has contributed to a broader loss of employee loyalty and given rise to the notion that one has to move out to move up.

Step By Step

So, with this in mind, how should you, as a corporate recruiter or executive looking to replace a key team member, assess what your organization's next steps should be to fill a critical position?

First, take the time to evaluate the critical requirements of the role. If it's an existing position, consider the people who've held it in the past and been successful, as well as those who have filled it with disappointing results. Who were they reporting to? Who were they surrounded by? What was it about their management style that drove increased results or led to disappointing ones?

If you're looking to fill a newly created role, think about what leadership skills will be required to inspire, motivate, and set an example. The new executive will need the confidence and experience to muster support, perhaps among skeptical employees.

Remember that the requirements of the role extend far beyond the simple matching of candidate credentials with the job specifications. Cultural fit can't be underestimated as a determinant of future success, along with the personal judgment to know when to lead and when to follow.

It's also important to consider how and if this hire will affect the overall management-successionplan—and whether this executive is being brought on to extend a record of high performance or as a change agent to disrupt a sagging business unit, enter a new market, build a new culture, or boost a lackluster strategy.

When to Get a Headhunter

Once you've arrived at a consensus in terms of what's needed, it's wise to begin with a scan of internal talent and emerging or high-potential leaders. If your organization hasn't started to benchmark individual performance with an eye toward identifying future leaders and helping them develop, start now.

Ask your immediate colleagues for referrals to people they know within the organization, whether they're working on the same floor or halfway around the world. Employee referrals—even at the executive level—have always been a very effective way to find qualified business leaders. (They're also especially economical and usually lead to accelerated hiring.)

If you've exhausted all internal options, it may be time to consider engaging an executive recruiter (BusinessWeek, 9/13/08). One of the early decisions will be whether you put the management vacancy on spec to one or more contingency-fee headhunters, the kind who earn their cash only if they actually introduce your company to the manager you ultimately hire.

You might choose to retain an executive-search consultant for any of the following reasons:

It's a search for a senior-management executive and/or it's expected to be a difficult search, perhaps because of a perceived small number of qualified candidates

Recruiting the perfect candidate is more important than filling the role quickly

The search requires the strictest discretion and confidentiality, perhaps because it will be conducted while someone (who will soon be let go) is still in the role

The employment/career-opportunity message—and the credibility of its messenger in the external talent market—are critical success factors

The position is new, and your organization might gain from the kind of external vision, specialization, and consulting that a retained recruiter can bring

If any of the above conditions apply, it might serve you to put the search in the hands of a qualified recruiter who can make your search an immediate priority. Otherwise, you and your organization are usually well advised to assess the variety of ways you might fill a crucial management role, since the quality of the homework you do before a search is initiated usually preordains its success—or failure.

Joseph Daniel McCool is a writer, speaker and advisor on executive recruiting and corporate management succession best practices. He is the author of Deciding Who Leads: How Executive Recruiters Drive, Direct Disrupt the Global Search for Leadership Talent, which has been recognized as "one of the 30 best business books of 2008" by Soundview Executive Book Summaries.

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