Why do some companies fail to get results from search firms?

“Maximizing Search Firm Success — Why some companies fail to obtain results from search firms . . . while others consistently succeed year after year.”

Understanding Search Firm Relationships

By Frank Risalvato

The process of recruiting may, on the surface, appear simplistic. After all, one might think, is it really more than making many phone calls, sending emails, and initiating dialogue with prospective candidates? Yes, it is.

In the hands of a well-trained, dedicated expert team, the process unfolds much like that of a symphony orchestra under the leadership of an eminent maestro. While a search firm can assist tremendously in increasing the percentage of trophy fish that will bite your baited hook — just as a fishing guide would be able to do — it inevitably becomes the company hiring authority’s responsibility to correctly reel the fish in and ensure that it does not flop out of the boat before you’ve had a chance to have your photo taken (or bring it home to grill).

Many of the complaints regarding search firms often stem from a breakdown in this “handing off” process. There are other reasons why search firms may fail to produce despite their best efforts. The most common reasons are outlined hereafterl.

Top Ten Most Common Causes Of Search Firm Failure

  1. Fee Attitudes: Expense or Investment?
  2. Stalling with Feedback
  3. Passing the Ball to the Wrong Team Member
  4. The Search Party Posse Strategy
  5. Excessive Authority in the Wrong Hands
  6. Cutting the Recruiter Out of the Loop
  7. Too Many Chefs Seasoning the Soup
  8. Overselling, Underperforming Search Firms
  9. Requesting References
  10. Cleaning House Now for a discussion on each item listed.

Fee Attitudes: Expense or Investment?

Many consider search fees as expenditures. Yet no one ever bothers to speak to managers across town or state lines to find out what financial impact may have resulted from the service.

This connection is rarely made. Yet a quick analysis of just one Fortune company our firm services has uncovered that even the lowest-level analyst/trainee can be worth $1 million in added revenue on that person’s first full calendar year. One Million Dollars.

While you may relish having secured a low fee and enjoy being able to boast about it, having no hire to show for your vacant controller, IT director, network administrator, national sales director, or CFO position while millions of dollars are being sidelined or neglected during the search makes little sense. Yet this is precisely what happens over and over again with searches around the country.

Stalling with Feedback

Providing essential dialogue and reactive feedback at a glacier pace negates all the hard work and effort put forth by your recruiting partners. Once a candidate expresses interest, a certain forward momentum must continue to maintain the interest that was piqued as a result of your recruiter selling your company’s and position’s benefits.

Put your search firm through more than one or two lost candidates, and they will most likely render your search unserviceable.

Meanwhile, you may be left wondering why your position remains vacant many months later.

Passing the Ball to the Wrong Team Member

I have experienced many cases where the search was sufficiently mission-critical for the chairperson or CEO of a multibillion-dollar company to conference directly with our search team, only to close the conversation by instructing us to “deal with Jennifer from here on.”

To our chagrin, “Jennifer” (name used as a placeholder for any low-level recruiting coordinator) often turned out to have been with the company for barely one year, with little to no previous experience.

Jennifer was rarely available, didn’t quite care, and did not view the project with the same urgency the chairperson did. She was often overworked, underpaid, never available during lunch, and never available one minute after 5 p.m. local time. Besides these minor shortcomings, human resources coordinators such as Jennifer are usually very nice people.

While weeks elapse as hardworking candidates struggle to fit a telephone interview into human resources’ schedule of availability, which is narrower than the eye of a needle, candidate talent is squandered as they lose interest.

The Search Party Posse Strategy

This is a classic scenario that has unfolded thousands of times in searches nationally:

1. Search firm A is hired under a contingency arrangement.

2. Search firm A is perceived to not be delivering results quickly enough (pick any of the reasons outlined in this list as the underlying cause), so therefore . . .

3. Company signs another contingency contract with search firm B. After all, it does not have to compensate anyone to enter into a second contingency agreement (in most cases — however, many search firms are changing their procedures because of this practice and requiring engagement commitments).

4. When search firm B realizes that A has already contacted many of the same candidates and the problem exists not with candidate availability but with company protocol, search firm B places the order on the back burner.

5. Company now has two firms it views as “unproductive,” so it invites search firm C and possibly D to join the everexpanding search party posse!

6. Sometimes a retained or other renegotiated approach with the original firm would have been far smarter than starting all over again. With each new search firm that gives up, the company incurs an increasingly negative public relations dilemma as word spreads that “there must be something wrong with that position.” If any search project position presents a realistic probability of concluding in a successful hire, then one and only one search firm should suffice.

Excessive Authority in the Wrong Hands

In contrast with item number 3 above, extending too much authority to one centralized corporate recruiting representative can also backfire.

National hiring or candidate selection control for a specific product line or business segment relegated to one individual can result in “absolute authority, corrupting absolutely.”

This can result in premature candidate rejection. Or rejection for the wrong reasons (such as favoring one search firm over the other) as well as other egregious abuses.

Cutting the Recruiter Out of the Loop

Whenever a hiring executive tells me, “It’s okay, Frank, we have it all under control,” this is precisely when I brace for disaster to strike. Overconfidence almost always backfires with a candidate rejection or other problem in the late stages.

By cutting the recruiter out in midstream, you are only preventing yourself from learning invaluable “inside knowledge” the candidate is inclined to share with the neutral recruiter that he or she is not revealing to you, the hiring manager.

A paramount attribute of a skilled recruiter is to get candidates to feel completely at ease in opening up and sharing their thoughts during an interview process. By shutting the recruiter out, you are preventing yourself from obtaining the very consulting portion of the service that comes along with the recruiting aspect.

This might be why some designations such as my own refer to “Personnel Consultant.”

Sometimes such information could save you from spending thousands on unnecessary perks you mistakenly assumed were needed.

Other times a serious misunderstanding can lead a candidate to resign without obtaining all the facts, leaving the search firm potentially liable even though you have prevented them from performing their due diligence by acting on your own.

Too Many Chefs Seasoning the Soup

Just as too many search firms invoke the law of diminishing returns as happens with the

Search Party Posse Strategy, the same diminishing returns apply to hiring managers involved in the hiring decision.

Limit group interviews to only the most critical and necessary team leaders or members. The more company hiring representatives that must participate and agree in unison on a particular hire, the more likely the chances are of a “hung jury” syndrome.

One or two is fine. Three individuals — maybe. Once the hiring decision rests on the shoulders of four or more individuals, you will have a better chance of winning the lottery at a local deli than obtaining a mutual group consensus.

Overselling, Underperforming Search Firms

Quite simply, you may have picked the wrong search firm. This breakdown occurs when the recruiting organization cannot deliver on the promises made. In such instances, the recruiting bench strength did not live up to the account acquisition strength. Too bad.

You may think for a moment that, on this one point, blame is finally pinned on the search firm, where it should lie. True, in this example, the search firm may have over-promised and is now under-delivering.

Yet the same responsibility rests on the shoulders of the company. Just as you would ask for references when hiring a candidate, you should conduct due diligence and ask for references of the search firm. This is not as easy as it seems, however, when big egos interfere. This leads us to failure number nine.

Requesting References

Here lies the rub: Very few executives would actually call a reference even if a stack of them were left on the table. That’s okay. At least ask for some information, which is better than not asking for any reference material at all.

Also, keep in mind that many searches have “non-compete” or confidentiality” clauses, which prohibit advertising who was placed where. As a result, it’s not s easy to get references in the search industry as it is getting client information from a public relations or advertising firm that regularly boasts about their clients and shares their logos in print.

At the very least, you should ask for whatever reference material is available or a track record of searches filled even if hiring managers must be omitted.

Cleaning House

When it comes to vocation, presentation becomes a highly important deciding factor. You are not just offering a job but providing a home away from home where that employee is expected to spend most of his or her daytime (and in many cases, nighttime) working life.

When a candidate is greeted by a frumpy, unkempt, cluttered, or outgrown office environment, it will create a negative first impression. This will become ingrained in the candidate’s mind and be difficult to erase, regardless of what the job has to offer.

I’ve been asked to visit clients and help them understand “why we can’t fill this position despite trying for more than one full year . . .”

Often these companies have used one, two, or three search firms over one or even two years, off and on. They have reached the point of desperation.

My suspicions are often confirmed when I visit the actual office building.

In one case, I walked in through a lobby, had to go up a staircase that had not been painted in perhaps 10 years, containing scuff marks, holes, and what appeared to be a hole from a boot kick. I would not want to work anywhere where people kick holes in the wall.

Upstairs, the carpets were loosened from the wall, bubbling, and snaking (they had long outlived their purpose). The lack of attention to aesthetics continued when I walked into the controller’s office and noticed an herb garden that was overgrown and spilling over shelving like something out of Little Shop of Horrors.

The place was one step away from being classified as a boardwalk fun house, let alone presenting an acceptable office environment.

Source: The Fordyce Letter