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 By Steven B. McKinney, McKinney Consulting, Inc.
“Secrets of Executive Search” Series Secrets, everyone has them. Some secrets are best left alone while others would serve the greater good if revealed. Knowing how to fully use executive search professionals is a mystery to most leaders, but it should not be that way. This article is the first in a series of articles demystifying executive search. Learn from an insider how to hire, fully utilize, and get the most out of your relationship with your executive search firm. Read on
Recently, IMD International Search Group, our global partner, conducted a global survey of the top 2000 companies from 24 countries from various industries and sizes. One of the many interesting statistics that came out of this survey was that hiring and retaining top talent was consistently one of the top three priorities of all companies.
A product of not using executive search business services wisely and effectively is bad hires. A lesser known secret is the cost of a bad hire. It is generally agreed and estimated to cost 2 to 3 times or more of an individual’s annual salary. Being that hiring is so crucial to all companies it is only reasonable to assume that we should constantly improve in our talent acquisitions.
Just as you evaluate legal or accounting services so you should evaluate executive search services. In the next few articles, we aim to provide you with a guide to understanding how to hire, vet, and benefit from executive search. Some of these items you may have seen superficially, but may not have considered the motivation or story behind them. Here, we’ll pull back the curtain so everyone can see the wizard’s face.
One example to get us started is the “Off-Limits Policy’ of the executive search firm. An off-limits policy is part of a normal engagement contract with a search firm, where the client gains some protection from poaching of its own executives by the search firm being engaged. The policy can vary from company to company in time and scope. Also, the secret of this item is to look beyond the definition and scope of the policy in order to gain an understanding on how their policy will affect your search.
Here is an example of an “Off -Limits” clause as supplied by the Association of Executive Search Consultants (AESC).
From the date of signing this agreement [Executive Search Company] will not recruit senior executives from your organization in accordance with the following constraints:
- Positions/Organization: [Specific Positions or levels] .
- Time period: [The standard is 1 to 2 years] .
These restrictions will not apply under the following circumstances:
- Cancellation of this agreement by you before the search is completed
- Failure to pay our fees and/or expenses when due
- A major change in your organization's ownership affecting our relationship
- You authorize exceptions in writing such as where your executives may be seeking other opportunities with your knowledge
We also confirm our policy not to recruit any placed candidate from a client organization while that placed candidate remains in that client's employ.
[Optional Clause to be included upon client's request
Organizations relevant to this search assignment which are clients of [Executive Search Company].and have off-limits agreements with us are:
- [ A list of these companies]
Consideration of confidentiality may prevent this list from being exhaustive but to the extent possible it refers to companies that might be relevant to the search.]
By agreeing to conduct this assignment we confirm our confidence and ability to satisfy your requirements through access to high potential candidates from other sources than the organizations listed.
The secrets that you should know about in “Off-Limits” are as follows.
1) Be aware that “Off-Limits” clauses are normal and should be standard in every agreement. If it is not there or has not at least been discussed verbally with the client then you do not know which companies the search firm cannot attract candidates from. You also do not know if you are protected or not.
2) If you are trying to attract talent from a particular competitor and they are “Off-Limits” to this search firm then you are wasting your time. This search firm, if ethical and honest, will only be able to attract former employees of your target competitor(s) which cuts down your candidate pool significantly. This is a big problem with large executive search companies that they probably don’t want you to know about. Some times bigger is not better, but can actually be a limiting factor.
3) Some unethical search firms avoid making “Off-Limits” clauses in their agreements. Why? What is there to hide if they are honest, ethical and have your best interest at heart? Is it possible that they would like to pull strong leaders from one client to another? It happens.
“Off-limits” is just one of the many items that we need to understand more completely. Here are other items we will be demystifying in future articles;
- Retained verses contingency firms;
- Industry specialization;
- Level of candidates searched;
- Multinational company focus or local company focused;
- Global reach;
- Local market expertise;
- Reputation and;
- Global ethical and best practices as established by the Association of Executive Search Consultants (AESC) are the main points that you should inquire about.
Steven B. McKinney is the President of McKinney Consulting Inc. a Retained Executive Search & Coaching firm. McKinney Consulting is the partner firm in Korea for IMD International Search and Consulting which has over 175 Consultants in over 40 offices globally. He can be contacted at
This email address is being protected from spam bots, you need Javascript enabled to view it
or website at www.mckinneyconsulting.com
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