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© 2004 Kennedy Information.
Reprinted with permission.
1) Individuals do not pay
fees to search firms.
Executive search
firms are paid by the companies who hire them
to fill a position, typically a fee of one-third
of the job’s first-year compensation.
Search firms are not working for you, but for their
paying clients. Therefore, do not expect firms to
be overly responsive when you contact them. If your
resume is impressive, they may add you to their database
of executives. Recruiters may contact you if they
have a position that fits your profile or to ask
you to recommend other people who might be interested
in the job. In either case, you will be starting
the process of building a relationship with the recruiter.
Every phone call or meeting will probably be noted
in the firm’s database.
2) The difference between retainer and contingency
search firms is important.
There are two types of
recruiters: Retainer and Contingency. Both charge
the client employer a fee and neither should ever
charge the prospective employee. The distinctions
between retainer and contingency firms are:
Retained
Search Firms: Retainer recruiters are hired by a
client company for an assignment, typically for 90-120
days, and are paid regardless of the results of the
search. They may also be kept on retainer by their
clients, to fill whatever assignments they have.
One retainer firm is hired by a client company for
a given job opening. They are more often used to
fill higher-level positions with salaries of $75,000
and above. For these assignments they will assemble
a short "slate" of candidates. Therefore,
if a retainer firm seriously considers you for a
position, you will probably be part of a small group
of candidates. While your file is being used by a
retained recruiter for an assignment, no other recruiter
at that firm can contact you, even if you would be
the perfect candidate. As a result, you are unlikely
to be contacted by a firm for more than one or two
positions a year, at most. If you work for a company
that has hired the search firm during the last year
or two, you will be "off-limits" for any
other position it may have, no matter how well qualified
you are. For this reason alone, it is important to
be known to multiple search firms.
Contingency Search
Firms: Contingency recruiters are more often used
for junior and mid-level executives, typically for
positions with salaries below $75,000. Contingency
recruiters receive payment only when their candidate
is hired. Contingency recruiters do not usually work
on an exclusive basis with their clients. Since they
are competing with other recruiters to provide candidates
for each assignment, they tend to work fast and to
submit to the client company as many candidates as
they can. This means you may be one of many candidates
for a given job. Contingency recruiters provide you
with a great deal of exposure, since they send many
resumes to their clients. This can be useful to you
early in your career or if you are unemployed. However,
bear in mind that you may not always want your resume
widely distributed if you are happy in your current
job. When a headhunter calls you, it can be hard
to tell whether they are from a contingency or retainer
search firm. Kennedy’s Directory of Executive
Recruiters will clarify that information. Even so,
contingency firms occasionally work on a retainer
basis and some retainer firms do contingency work
from time to time. Our advice is to ask explicitly
the nature of the assignment before giving your permission
to any recruiter to distribute your resume.
3) Some search firms specialize, while others
don’t.
Consider both kinds.
Recruiting firms are often generalists,
covering many different management functions (e.g.
sales) and industries (e.g. textiles). Quite a
few firms and many individual recruiters, however,
do specialize. To make your search as effective as
possible, consider recruiters who cover your function
and specialize in your industry. Generalist firms
should not be ignored, especially at the higher executive
ranks. The largest multiple-office search firms tend
to cover all functions and industries, but will often
have practice areas for particular areas of expertise.
4) Most recruiters work nationally, so don’t
limit your search by geography.
At the lower salary
levels, companies may be reluctant to consider
out-of-town executives because of the expense of
interviewing and relocating them. In these instances,
search firms may focus on local candidates. However,
for many executive appointments, search firms will
look nationally or even internationally. It is in
your interest to be known to search firms who fill
positions in your industry, function and salary range,
no matter where they are. A New York recruiter is
as likely to have an assignment in Los Angeles as
in Boston.
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