Know the difference between executive search and recruitment

In a new report, InterSearch breaks down the distinctions between the two approaches to meeting your talent needs, levels of roles to be filled, markets served, and more.

September 23, 2022 – Many are confused by the difference between executive search and recruitment. The two terms are often used interchangeably, even by people working in the industry. While it can be said that recruitment agencies and executive search firms share the same goal – to hire the best possible talent – they do not operate in the same way, according to a recent report by Marta Rojko of InterSearch. “There are several significant differences, and companies should have a good understanding of these differences when deciding which will provide the best results for their next search,” the report says. “The wrong choice can lead to costly mistakes, lengthy recruiting processes and even a bad hire.”

So which one to choose? The InterSearch report explains the differences and which of the options might be best suited to your needs:

Higher level roles vs. Entry and mid-level roles

One of the main differences is in the seniority level of the roles. According to the report, executive search firms, as the name suggests, focus on recruiting highly qualified and experienced executives, executives or senior managers. “These searches are typically high risk for recruiters due to their preference for the contingent-based business model,” the study states. “Executive consultants also specialize in positions that are typically harder to find or require a specialized skill set. These high-level positions are essential to the business in terms of leadership as well as unique abilities that individuals need to execute long-term plans and day-to-day operations. »

In contrast, recruiters typically focus on finding junior positions up to and including lower level management. The InterSearch report explains that some choose to differentiate themselves by specializing based on level of experience – for example, beginner or intermediate. If the role has strategic oversight, either for the organization (senior management) or for a division or department (middle management), consider appointing an executive search firm that specializes in your industry or business function.

Search for passive or active candidates

According to the InterSearch report, another difference, and a determining factor in whether you need an executive search firm or a recruitment agency, is the type of candidate you want to attract for the job. “Executive search consultants employ proactive search methodologies — targeting passive candidates, those not currently seeking new roles, or those not yet applying for roles but networking — known as tiptoers,” he said. he declares. “Passive candidates and tiptoers make up about 60% of the talent pool. In executive search, most of the time, the successful candidate is not an active job seeker who has submitted their resume. In some cases, however, executive search firms also extend their coverage to active job seekers, using job postings and social media to supplement their search. If the research is not confidential, yes. This ensures that they target the entire talent pool and reach out to the best candidates, regardless of their circumstances. »

Marta Rojko is a communication specialist and sociologist. She has been active as a consultant at P&P InterSearch Slovenia for four years, where she is also in charge of international communication and cooperation and some personnel searches as well as marketing projects and part of operations. She started her career after completing her studies in a high-tech, development-oriented manufacturing company, then moved to Dubai where she worked for five years before joining P&P InterSearch Slovenia. P&P InterSearch Slovenia focuses on executive search, but also offers a range of HR consulting services ranging from reorganizations, optimizations, a variety of analyzes for management assessments and leadership development, succession planning , outplacements, etc.

On the other hand, recruitment agencies traditionally target active applicants – job seekers – candidates who are either unemployed or actively seeking a new position through various channels. Active job seekers represent approximately 30% of the talent pool, which limits the scope of the search. “It may also be individuals in the database, registered with multiple recruitment agencies and interviewed for multiple roles,” the InterSearch report said. “Recruiters seek to mitigate these disadvantages to some degree by contacting candidates through their LinkedIn network or database.”

Retained Search vs Contingent Search

Another difference that needs to be highlighted is the different business models applied. Executive search firms operate on an agency business model, which means they charge an upfront fee, the InterSearch report explains. The initial costs generally correspond to 30 to 35% of the investment costs. “The initial investment reflects the rigor of the research process and the resources needed to implement it,” the report states. “Executive search consultants take the time to understand your offering in the market – your mission, your values, your culture – as well as establish the skills, experience and competencies essential to succeed in the role. With a signed job profile, the executive consultant takes your role in the market. The remaining fees will be charged in installments at key stages of the search, for example, after submitting a shortlist of candidates and the remainder upon placement.

The report also notes that executive search firms offer a guarantee period, which typically lasts three to six months, or the probationary period of the placed candidate. This means that they will relaunch a search if the person they are placing leaves their position prematurely.

“Executive search firms profit from their reputation,” the InterSearch report states. “Because they handle a relatively low volume of roles and work on exclusivity, they spend time getting to know their candidates; their personalities, working style, motivation, leadership abilities and drivers. Likewise, because they mostly deal with passive candidates, executive search consultants must present the role in the most attractive way possible and motivate the candidate. The role should always be a rewarding gesture for him or her, but the way it is presented is essential. This means a better candidate experience, with the added benefit that executive search firms can provide a more personalized search, presenting shortlisted candidates who better match the job description.

Related: Retaining Your Employees During the Great Resignation

Recruiters, on the other hand, have traditionally used a contingent business model where they only charge a fee for the successful placement of a candidate. Usually more agencies seek to fill the same role, which means they are in direct competition with each other, according to the InterSearch report. While the lack of upfront costs, low risk, and head-to-head competition may sound appealing, it comes at a cost. As they will only place a portion of the roles they fill, they will seek to prioritize less demanding searches – consuming less time, money and energy.

Operate internationally or serve local markets

Executive search firms are more likely to operate internationally. The InterSearch report notes that this reflects the needs of their clients who, when looking for their next A-player, are willing to look beyond geographic boundaries to hire top talent, wherever they reside. They may or may not have a physical presence in the country, but they will have established networks in those territories.

Know the distinctions between talent advisors and recruiters
These two types of partners for finding the right people are far from interchangeable, says SGA Talent in separate reports. The two are by their very definitions different. Their approaches, long-term vision and specialization are also not the same.

Recruiters generally serve local markets. This is particularly the case for freelance recruiters, although larger companies with multiple branches offer national and sometimes also international coverage. The term “local” can refer to an area as small as a district or as large as a county or region.

“In closing, I want to emphasize that both are equally important,” Ms Rojko said. “Recruiters are the backbone of the recruitment industry, as they do a fantastic job of finding and placing many candidates in a variety of roles each year. But they will be best suited for entry-level to mid-level positions, that don’t require specialized skills and multiple hires that meet those criteria.They’re also best for filling immediately needed positions where you’re looking to hire within days.

“In comparison, executive search firms offer a solution for leadership and leadership positions that are critical to business success,” Ms. Rojko said. “They are best suited to fill management and leadership positions, hard to fill positions, confidential positions, niche or specialist recruitments and multiple recruitments meeting the above criteria.”

“To conclude, understanding the differences between executive search and recruiting can ensure you choose the right type of company to maximize the chances of hiring the best of the best for the roles required,” she said.

Related: Hiring Top Talent in Unprecedented Times

Contributed by Scott A. Scanlon, Editor; Dale M. Zupsansky, editor; and Stephen Sawicki, Editor – Hunt Scanlon Media

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