7 Factors for Selecting an Executive Search Firm
Selecting the right executive search firm is a critical business decision with far-reaching implications. The search firm you choose to find and place your organization’s highest-ranking positions, including C-suite and Board Directors, impacts your company’s culture, strategy and business success.
Because the executive search firm plays such a vital role in your organization’s future, you must choose wisely. AESC’s three-year benchmark client survey asked more than 1,000 executives from around the world, “What are the most important factors when selecting an executive search firm?” The answers to this question should help other organizations navigate the executive search firm selection process.
The most important factors when choosing an executive search firm according to executives are:
1. Consultant’s Industry/Functional Knowledge
Respondents overwhelmingly indicated that the consultant’s industry and/or functional knowledge are of utmost importance. Fifty-six percent expressed that the individual they are working with directly should have a strong background in the specific area of the search.
For instance, if you are looking for a consultant with deep experience in the healthcare space, they should have the resources to back it up. A top consultant has references to demonstrate their specific area or areas of expertise.
When interviewing firms, find out which consultant will take on your assignment. Ask questions about their background and schedule a call to learn more.
2. Consultant’s Reputation
The consultant’s reputation was rated the second most important factor, further emphasizing the importance of the specific consultant who will work on the assignment. Clients want to know with whom they’re working. Are they good at what they do? Are they easy to work with? How have they performed for others in the past?
To learn more about a consultant’s reputation, we strongly encourage reference checking. It’s surprising how often clients don’t take the time to do this. Speak with organizations that have previously worked with the consultant to learn more about their experience. Probe on such things as regular communication, processes, skills and, of course, outcomes.
3. Specific Industry/Functional Knowledge
Thirty-three percent of respondents reported that the firm’s specific industry/functional knowledge is a critical factor. A top executive search firm will have extensive knowledge and years of experience finding and selecting executive-level candidates for a variety of positions.
Many firms combine both industry and functional knowledge. They may even combine expertise to create the right team to meet your specific needs. Are you looking for a CFO in financial services? You might seek a firm that has both CFO functional expertise and financial services expertise and are able to bring together a strong team that combines both areas of experience. Another area of importance, especially in emerging markets, is having in-depth regional expertise.
When engaging various firms, inquire about their areas of specialization. You can begin by looking at their websites. Then follow up to learn more. Do they specialize in placing a particular C-suite role? If you are retaining them for a Board search, is this an area of expertise? Find a firm that has the expertise in the industry, function and/or geography you’re interested in placing. When interviewing firms, ask them specifically about how they will approach your search and what expertise they will bring to your important assignment.
4. Prior Positive Experience
While listed as #3, in fact, prior positive experience is often one of the most important factors. The longer you work with a firm, the more the consultant moves into “trusted advisor” status. They understand your organization and can often “hit the ground running.” They know you, your firm, your culture and your business strategy.
It’s still important that they have the right experiences for the particular search. If you are hiring for a new specialized role – for example Chief Sustainability Officer, Chief Information Security Officer or Chief Diversity officer – you likely will want to probe on the specific experience they have in this area.
5. Firm’s Reputation
Twenty-five percent of respondents highlighted the firm’s reputation as a deciding factor for selection. What is the firm known for? How are they to work with? What are the firm’s consultants like? Do they have a high success rate? To understand a firm’s reputation, research the organization and its online reviews across various channels. Turn to peers and references to glean additional first-hand information.
Check the firm’s credentials, too. Is the firm an AESC member? AESC members have been carefully vetted and adhere to AESC’s rigorous quality standards. AESC Members are leaders in the executive search and leadership consulting profession who adhere to a Code of Professional Practice.
6. Assessment Methodology
Approximately 25% of respondents indicated that assessment methodology was tied for sixth place in terms of importance when choosing a search firm, up seven points from 2019. This notable change indicates the increased value executives are placing on assessment. Multi-measure assessments mitigate the risk of a bad hire, aim to reduce bias and assist the onboarding process.
To ensure you’re receiving the advantages of assessments, ask about the firm’s assessment process. What types of assessments does the firm use? Do they incorporate multiple types of assessments into the process, including psychometric assessment? Are their assessment tools globally validated by an authoritative body to prove validity? Are their consultants certified to use the assessment tools?
7. Trusted Advisor Relationship
According to our survey, executives desire a partnership with executive search firms. Approximately 25% percent of respondents highlighted it as a key selection factor, tied for sixth place. We mention the trusted advisor relationship when discussing prior positive experience. The best advisors stay in touch on an ongoing basis, sharing relevant insights and executive talent and market trends that are specifically relevant to you and your company. Building this connection moves the consultant from “vendor” to trusted advisor, ensuring that you maximize the value of this relationship over time.
How do you know if the firm you’re interested in will partner with your organization in the long term? Ask about the firm’s post-placement process. Do they assist in onboarding? How do they stay in touch after the assignment? Check with references on this, too. Would they hire the firm again? Have they built a trusted advisor long term relationship? Do they use them for other services?
If you’re interested in more executive search insights, including reasons to hire a firm and important search metrics, download AESC’s latest report “Creating Opportunity: 2022 Three-Year Benchmark Client Survey.” This report is currently available for AESC members only. Our report will be available for non-members after March 15, 2023 at AESC.org.