Often when I ask clients, why do they prefer working with search firms on a contingent basis? They respond with “because that is how we always have worked” and whilst I certainly appreciate comfortability of the situation and the process of ‘not changing something if isn’t broken’, does that mean it is the right thing to be doing? What if there was a way to improve things and make your life easier in the process.
The importance of utilising the right recruitment strategy
Recruitment can be a difficult topic and a topic that a lot of HR professionals and hiring managers will not be afraid to say is one of the least enjoyable parts of their role. However, also one of the most important. In the current climate, hiring is undoubtedly a big challenge for businesses. In what is a very candidate driven market, identifying good talent is harder than ever before. This means that it is very important to ensure that you have the right strategy and resources in place to hit your targets.
When analysing the Venture Capital & Private Equity sectors, it is clear to see that human capital is one of, if not the most critical aspect of being a successful business in terms of culture, strategy and performance. Therefore, hitting on your hiring at the first attempt is pivotal to achieving your goals. Would it be fair to say that cutting corners in your recruitment efforts should therefore, not be an option?
So, what is a contingent search method?
A contingent search is a search method focused on identifying talent within the open market, those who are more actively looking for roles. The search is often looked upon favourably by businesses as it involves less risk, this is because it is a method where the search firm are being rewarded on a success basis.
The search is also often utilised in conjunction with several other search firms and whilst theoretically this can offer a broader coverage of the market. However, in some instances this can be a misconception as the search firms are primarily focusing on the same candidate networks, by covering those are merely ‘on’ the market.
A contingent search can also bring negative connotations for the representation of your brand. A recruiter is a critical component of how your brand is viewed in the market. By using multiple search firms, it can be difficult to control how you are perceived by the market, with different recruiters selling your brand slightly differently for better or worse.
If you are able to identify strong talent, being approached by multiple search firms about the same role can be a huge turn off for those candidates. What would you think if you went to view a house and it had multiple for sale signs from various agents? Having said that, search firms will prioritise their top candidates for exclusive mandates they are covering, meaning that you might not see them at all.
Finally, you might not be gaining the commitment from the search firm that you would require to complete the mandate efficiently. Which often means firms will walk away from the search in favour of more attractive propositions.
What does an exclusive search consist of?
An exclusive or retained search is centred around search & selection, where the recruiter is actively sourcing the market for talent. It is best utilised in situations where the search parameters are very niche and challenging in terms of candidate identification or attraction.
Within an exclusive search mandate, the search becomes the priority for the search firm, where they will dedicate their time and resources to filling it. Within the search, you will receive a greater coverage of the market as the recruiter is proactively engaging with the market in a targeted manner, ensuring that they cover all bases before moving to shortlisting.
Exclusive Searches in Venture Capital & Private Equity
After doing consistent analysis of the market and previous mandates, it is clear to see from our own data that this type of search is considerably more effective in the Venture Capital & Private Equity sector.
Venture Capital & Private Equity is a very specialised sector where clients are consistently searching for very niche candidates who possess specific skill sets, sector coverages and languages. To identify talent who possess these requirements, to a very high standard that is naturally expected within the industry, it is critical that the right resources are dedicated to the search process.
It is also imperative that you do not get set-back as a business due to having extensive hiring processes and in some instances hiring the wrong candidate. Whilst it is not possible to factor this risk out completely, with a more detailed approach to candidate qualification and strong communication, we can work with you to limit these risks as best possible.
The primary benefits of an exclusive search
One of the main benefits of executing an exclusive search is the reduction in the time taken to complete the mandate when compared to a contingent search. When analysing our own stats, an exclusive mandate takes 8 weeks on average, from initial qualification through to offer delivery. When compared to a contingent mandate, this is typically averaging closer 16 weeks.
The main reason for this is because the search is handled in much more strategic and structured manner. You are receiving the shortlisted candidates at the same time, being able to interview & benchmark them together before progressing to offer. This will instantly save you time and resources, freeing you up to focus on your day to day rather than recruiting.
In addition, you are also saving on your cost, as ultimately getting things wrong will cost more over time. Our own data shows that our exclusive search method has a success rate of 93% when compared with 73% on a contingent search.
Secondly, the process is managed in a controlled way where we are able to build a partnership together. By developing that relationship, we are able to truly understand your business, which reflects well when we are selling the opportunity to candidates. In particular, when we talk very clearly to them about the team, strategy, culture and work-life balance, all key aspects in this sector. As facilitator of your brand to the market, we care about how we represent you. This is imperative to guaranteeing the market receives the messages that you want them to.
It is also often a misconception that an exclusive mandate is more expensive than a contingent mandate. Whilst the payment terms usually involve an upfront cost, they are often a lower fee based on the commitment from you. In fact, closing an exclusive mandate is a top priority for us as we want to provide a strong return on investment to help build a long-term relationship with you.
Having said all of this, the main benefit of this search, is that the search is centralised around delivering the best quality to you and not a service based around speed. This is important as we work very hard to ensure that corners are not being cut during pivotal moments of candidate qualification and presentation within the process. We aim to provide as much detail as we can regarding candidate’s situations, salary details and even any concerns that we have which are important to alert you of.
Why you should be considering going exclusive
Ultimately, it is very easy as a business to look back at a hiring process and focus on the outcome and disregard the process. However, if we properly analyse the process, we can find many aspects of it that can be improved, to either get to that same outcome in a much more efficient manner or to even get to a much stronger outcome that would have never been possible before.
It is essential to adapt to the situation around you and whilst you may have done things in a certain way before, that does not mean that this method will always achieve the best results. Within the current climate, in a time where recruitment is very specialised, utilising an exclusive search method is proven to achieve the highest chance of success. Our searches are much more efficient as seen by our stats where we are achieving an interview request rate of 74% (in comparison to 50% on contingent searches) and roughly halving the total amount of interviews during the process when compared with similar contingent mandates.
If you are looking for an easy way to improve your process and results when hiring, it is time to consider going exclusive.
To discuss further, please feel free to contact me on Ross Tacey, firstname.lastname@example.org.