Hiring an Executive Search Firm?

The Canadian workforce is aging and that means more retirements of senior non-profit executives in the coming years. According to Statistics Canada, by 2021, the baby boom cohort will have fully transitioned past the age of 55 and more and more senior leaders will be retiring.

Whether your organization is looking at imminent retirements or wisely developing succession plans, one of the decisions you’ll be faced with is whether to lead the hiring process internally or look to the services of an executive search firm.

At BMG we have a unique and in-depth approach to executive search. Our process and tools leave no stone unturned in candidate assessment.

Hiring an Executive Search Firm?                 

Next to defining organizational mission and values, selecting a CEO/Executive Director is the most important decision a Board will make.

Hiring an Executive Search firm can be a valuable investment to ensure the optimal fit for future success in challenging times.  Here are some key considerations to guide you through the process of recruiting Senior Executives.

Go it alone or retain a search firm

Other than in the case of small non-profits which may not have the requisite financial capability, there are simply too many aspects involved in a search for a board to undertake such an initiative without professional assistance.

Which firm you choose to work with is your first significant decision.

Important parameters to consider are:

  • Industry knowledge and experience
  • Capacity
  • Fee structure
  • Assessment testing capability
  • The search firm’s thoroughness
  • Approach to internal candidacies
  • The stakeholder experience
  • Values and behaviours

Let’s start with the last one because it is the most important. As with any service provider, if the search firm’s values and behaviours are not in harmony with yours, they are not a fit for you.

Ask questions such as:

  • Do you conduct original primary research each time (or rely on who you already know and ‘recycle’ candidates)?
  • Do you attend the interviews conducted by our search/selection committee?
  • What happens if we do not feel there is a suitable finalist candidate after first and second round panel interviews – what is your policy or process in this situation?
  • How often do you report on search status?
  • Will we have visibility into the candidate population you have spoken to inclusive of candidates not presented, should we so request?

Industry Knowledge and Experience (Domain Expertise)

At BMG we believe sector knowledge and experience is a definite asset.

Generalist search capability is transferable across sectors; however, the learning curve is steep and comes at your expense.

A sector specialist will be familiar with the operating environment and key players and can add value more comprehensively and quickly.

The Search Firm’s Thoroughness

During the search process, we believe it is critical that we build a strong, trusting relationship with the selection committee and the Board.

We achieve this by providing:

  • Weekly status reporting
  • A customized, comprehensive, elegant Executive Brief and position profile, based on consultations with key internal and external stakeholders as you so determine;
  • A public posting for purposes of transparency, and to ensure maximum visibility and marketing of the opportunity and your organization.  We advise you on the most effective sites. Note that we do not rely on advertising to conduct a search, nor should any search consultant. 
  • Comprehensive written summaries on all candidates we interview and present to you in a long list review meeting; 
  • Customized interview guides for the selection committee;
  • Our presence at all of your interviews in their entirety;
  • A seamless interface with us throughout the process
  • Importantly, a great experience for you, your stakeholders, and candidates, (whether or not they are successful).  Internal candidates must feel valued throughout the process and external candidates must feel the experience  has been a personal growth opportunity for them and one in which they felt respected.

Fee Structure

Executive search has historically been priced as a percentage of first year salary.  Often, in the private sector this may be as a percentage of first year total compensation. A conventional rule of thumb for fees in non-profit executive search is approximately 30%, payable in three installments[M1]: upon contracting; at long list presentation; and at shortlist interviews.

Our view is that a percentage pricing formula can be unduly expensive, notably for not-for-profit organizations.  We strive to arrive at a budget that reflects the services and quality  we deliver, matched by our commitment to and expertise in the sector we are serving.

Assessment Testing

Assessment or psychometric testing is an accepted element of leadership development and an interesting adjunct to executive search.

Properly done, it provides insights into a candidate’s temperament, conceptual and strategic thinking capabilities, ability to handle complexity, likely behaviour under pressure, creativity, emotional intelligence, and leadership style amongst other dimensions.

In this sense, a battery of test instruments yields an additional data set on a candidate’s ‘make up’ and hence another lens into their suitability.

We are often asked if we have assessment capability (we do), and if we recommend it. Our answer to the latter is that assessment has its merits; however, it does not supplant behaviourally based interviewing first and foremost in a successful process. Assessment is also additive to the search fee, even if only charged at cost (BMG’s policy).

Importantly, if a decision is made to conduct third party assessments, candidates should be informed early in the process so that they are not surprised and potentially disaffected by this at a later stage.   

While the quality of data from a well executed assessment process and how it can inform decision making is impressive, we have never seen a case where it ultimately changed a selection committee’s recommendation to the board. It could though, serve to provide the point of departure for a conversation between the new ED/CEO incumbent and the board chair as part of an  onboarding process, notably pertaining to styles and ways to work most effectively together. At BMG, in addition to conducting wide ranging networking and an initial screening conversation, we spend up to two hours with a candidate in a first face-to-face behaviourally-based interview; some four hours sitting in on your interviews with shortlisted (first round) and finalist (second round) candidates; in addition to conducting a minimum of six comprehensive reference checks on a finalist candidate to obtain a 360 view of their suitability. All of these activities in the aggregate provide a very comprehensive view of a candidate, in addition to assessment should this be undertaken.        

Internal Candidacies

This is a particularly delicate matter which requires your close attention and sensitivity as well as the search firm’s.

How an internal candidate is treated, notably since their candidacy will likely be known internally, speaks volumes to the individual and also to employees as to how people are valued by the organization at large.

In the first instance, the selection committee needs to determine if the internal candidacy  has a reasonable degree of legitimacy vis a vis  CEO /Executive Director role. If this were not necessarily the case in the short term, another consideration is whether the interview process might serve as a meaningful developmental process for the individual should they ultimately not be the successful candidate.

Internal candidates should be placed on a level playing field as other candidates. The interview process should be identical for all.

That said, should an internal candidate not be successful, this should be communicated to them by the board chair not the recruiter. This is more respectful; and provides an opportunity to express appreciation for the individual’s investment in the process and to touch on their possible professional development needs for consideration going forward. We then follow up as a courtesy with the individual and offer to meet with them should they wish.  

The Stakeholder Experience

This final key consideration is directly related to the above-mentioned matter of respect, in addition to organization reputation and ‘brand’.

Be it the board, internal or external personnel participating in consultations, the workforce at large, or candidates, what they experience during the search process is of paramount importance.  Do they feel valued? Were they treated with dignity and grace?  In the case of external candidates, was their confidentiality protected – including details such as  ensuringtheir path didn’t cross with that of another candidate at the venue for an interview with the recruiter or the  selection committee?  Other concerns include: were they kept informed at different stages of the search; were any constraints they may be facing explored, such as family considerations which may impinge upon a geographic move; and will they be released from the process in an appropriate and timely manner if their candidacy is no longer under active consideration?

This brings us back full circle to where we started:  values and behaviours. The search firm’s and yours.

Executive search is arguably the most strategic form of management consulting.  At the CEO/ Executive Director level, it has an inordinate impact on people and organizations.  You will no doubt want to accord it the time and attention it is due and ensure that your search provider does the same. The search provider you choose will be representing your organization to senior people who are likely influential in your sector if not beyond, and you want to ensure that the process leaves them with the unequivocal impression your organization is professional, courteous and respectful.  This will serve to strengthen the reputation of your organization in the marketplace, and help you remain a leading destination for top level talent well into the future.

Photo Copyright: Jakub Jirsak, www.123rf.com

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