Should you hire a recruiting firm? Read this before you do
The world of executive recruiting is in desperate need of a makeover...
For decades, the world of executive recruiting has been cloaked in mystery, with so few actually understanding how the process works. Most blindly trust in the process simply because it has existed this way for so long, but we are here to shine a light into how this secret world operates. The Suite was founded by George Mazzella, a former executive recruiter, who has decided to dispel the mysteries of the recruiting industry and tell you exactly what goes on behind the scenes and why most of the time you’re better off doing the hiring yourself.
If you’re looking to hire talent you have two options: Find the person yourself or pay someone else (recruiters) to do it for you. Like most, you probably prefer to do the hiring yourself, but due to a lack of capacity and resources you and your team can’t always get the job done as quickly as the business needs you to. Now we are going to paint you a picture of a situation you’ve definitely seen before… Your funnel has dried up, referrals from coworkers have stopped coming in, and your CEO is constantly reminding you how critical this senior hire is to the future success of the business. In recent years, this urgency to hire has only increased yet technology to enable you to be able to meet these higher demands has remained non-existent, until now. However, for the sake of this story there is no technology to help you and your only option is to set your ego aside and look for a recruiting firm to help you.
Recruiting firms operate under two different business models that require different fee structures: Contingent (payment after hire) and Retained (payment upfront in parts and guaranteed). At the executive level very few recruiting firms will take on an assignment that is not retained and at these levels, a single hire will cost you upwards of $150,000 with some of the highest fees reaching into the 7-figures. You read that correctly… there are companies that pay fees of over $1,000,000 for a single hire and they do it often. Yet what we can’t seem to understand is how they (recruiters) justify these fees. After all, the job of recruiting a mid-level manager doesn’t vary greatly from the process and resources required when hiring an executive. In fact, the market of suitable candidates only decreases as you move up the ladder and one could therefore make the argument that the more senior the search (and the fee increases), the workload required to close that search actually decreases (fewer reach outs, smaller pool of talent).
Now, let’s take a look under the hood at what that $150,000 fee really bought you
Can you remember the pitches you've heard in the past? We bet they sounded something like this:
1. “These are the list of similar searches we have done and “passive” executives only we can introduce you to.”
2. “We are the best in the industry at mapping this market and identifying talent that is perfect for your organization.”
3. “We have our proprietary, super-secret, DNA decoding assessment that will tell you exactly who an executive is and predict the impact they will have on your company.”
With the exception of the last point (couldn’t help ourselves there), equipped with the right amount of confidence, the first two can be extremely convincing and with 10,000 other things on your plate, you probably won’t take the time to analyze these claims. Luckily for you, we are going to do that for you now.
The similar searches they have done and “passive” executives only they can engage
When you first join a search firm as a researcher (the entry point) you’re taught the first step of a search is to utilize the firm’s previous track record or “black book” and contact those they already know or who have interviewed for them before. Afterall, who doesn’t like quick wins? Once this pool has dried up, the partner instructs their researcher to scour the web (which really means LinkedIn) cold-emailing those who “fit the spec”. There was a time when finding talent was so nuanced that only the top recruiters could locate great talent, but with the dawn of modern technology we all have access to the same database (LinkedIn). Now that we all have the same “black book” the role of the agency recruiter has shifted from talent locating to public data verification. Yet despite this simplification of their services, there has been no change to their fees.
Passive talent, people who don’t look for jobs because they’re too happy where they are, we all know this term and why these candidates are perceived as more desirable. We all believe that these people would never apply to a job, we are told that only a recruiter can get in touch with these people, but where is the data to support this claim? We can save you the research time because while building The Suite, we spent one year interviewing nearly 200 executives for this exact purpose. What we found were answers that inspired the all too familiar feeling of wanting to facepalm yourself.
“How can we claim with certainty that “the best” executives don’t apply to jobs when there isn’t a channel for them to do it?”
This was one of our favorite responses and a theme we heard again and again. Until now, there has never been a direct channel for executives to find roles and without a challenger, recruiters have been able to use this argument repeatedly to convince you that they can do your job (if you work in talent) better than you can.
Their ability to map the entire market and identify the best talent
Trained experts who can pick out the best talent in the world and introduce your company to the “perfect” candidate. They will all say this to you during the pitch, but what they won’t mention, are their “off-limits”. For those who are unfamiliar with this term, off-limits is a common clause in a recruiting contract that will protect the client company from losing talent to the same firm they hired to find it. So when a search firm tells you that they will map the entire market and pick out the best profiles for you to meet, what they are really saying to you is that they will reach out to everyone in the market who they aren’t working with currently.
This may not seem like a big deal from the outside, but when the market of viable candidates with the right experience is only 50 (and often it is even less), and 10 of them work for companies that the search firm cannot touch, you have effectively lost out on 20% of the market and a search hasn’t even been started yet… interesting how this never seems to come up during pitches. When you add in relocation concerns, compensation misalignment, openness to leave their current role, and that original 40 can quickly dwindle to 8 viable candidates or less.
So before you accept your next shortlist, and a recruitment firm promises that the 4-6 names they give you are the best in the market, ask yourself this: Are they really the best and is my hire here or are they the only people that said yes? With a starting price tag of nearly $30,000 per name, it had better be the former. The market is not as big as you may believe and we cannot stress enough how important it is to grow the top of your candidate funnel as quickly as possible. Failing to grow your funnel at the start is one of the leading causes of a failed search, where the worst case scenario leaves you without a hire and the recruiting firm walking away with your $150,000.
Their proprietary, super-secret, DNA decoding assessment
Nope. Not going to touch that one here. All we will say is that you’re better off asking for the executive’s astrological sign and reading their horoscope. There are companies that have invested millions of dollars and employ armies of PhD's to provide this service... that recruiting firm you spoke to isn't one of them.
What point are we trying to make here?
At this point you may be thinking to yourself: What did recruiting ever do to The Suite? The answer is nothing, but our research showed us that the industry as is, is fundamentally flawed and we are aiming to fix it. We believe search firms should still exist, we just don’t believe they should function as they do now or charge the same exorbitant fees. There is an absolute value add in the addition of a consultative partner who will help craft an experience or advise you on current trends, but with today’s model, that isn’t the service you’re getting.
We gave you a peak behind the curtain, no one can recruit for your company better than you can – as long as you have the right tools – aka The Suite – and using The Suite, your talent team can source the RIGHT talent faster than ever before. Think about the things you need to hire the right talent: Knowledge of your organization’s unique needs, a clear picture of what the role needs to achieve, & access to a verified, transparent, and comprehensive network of executives. You already have the first two, let The Suite provide the third.
George is the CEO & Co-Founder of The Suite. He founded The Suite in order to fundamentally change the way executives manage their careers. Prior to founding The Suite in 2019, George spent several years in the executive recruiting space where he was fortunate enough to advise some of the world's leading VC & PE backed businesses on talent.