When is it Worth the Price to Engage an Executive Search Firm?

Posted by Bob Corlett on December 8, 2016

Why hiring so often leads to disappointment.

Great hiring practices bring hidden issues to light, and provide insight into questions you had not even thought to ask. But most typical hiring practices do the opposite, ignoring more information than they gather, and leaving your hiring decision up to chance. The “insight gap” is what makes an executive search firm worth their fee. It's what justifies the cost of any professional services firm.

When you are not an expert, you risk overlooking important information that experts don’t. Whether you are engaging a lawyer, an accountant, a management consultant, or a recruiter, your goal is to benefit from their expertise. Their specialized knowledge expands your options, accelerates your progress, and mitigates your risk. Experts develop frameworks to gather all the necessary information; they know what questions to ask, where to look for answers, and how to evaluate situations like yours.   

But simply knowing more is not enough to justify hiring an expert. Before you allocate money from your budget, you want to understand the return on investment you can expect from the expenditure. You want to be absolutely sure you can justify that investment to anyone who later asks about it (senior leadership, the board of directors, etc.). So a good starting point is to look at how an expert process differs from a do-it-yourself approach, and how those differences meaningfully affect the outcome.

When hiring is effective, it can be as satisfying as completing a jigsaw puzzle. There’s a joy in watching the picture gradually come into focus, piece by piece. But the most common hiring practices unwittingly throw away puzzle pieces. The end result is much less satisfying – you make your hiring decision with only a small portion of the puzzle completed. Instead of progressively completing the picture, your focus steadily narrows down to only a small fraction of the necessary information.

Most people involved in hiring are so busy that they never even notice how many questions are going unasked (and unanswered).   

Typical hiring practices leave you flying blind, leaving out more information than they gather in – as you’ll see in the examples below. By contrast, a great hiring process gathers and organizes all the relevant information into a solid decision support process.

There are six steps in the hiring process, where information is either gathered or deleted.

 

Step One - Why Are You Hiring? Do You Really Need to Hire Now?

Consider the very beginning of a normal hiring process. What triggers it in the first place? Maybe the team is too busy to complete an important task properly. Maybe a new task requires specialized skills that no one on your team has. Maybe nothing changed, but somebody just resigned.

Typical hiring practices tend to skip this step, starting at step two (asking what you are looking for in a new hire). This is a mistake. Reflecting on why you need to hire can be crucial to your ultimate success. So what questions should be asked now?

Which questions usually go unasked:

  • Is this new hiring the result of a people problem or a process problem?
  • Could the current staff handle the work if the work was organized differently?
  • Could the outcome be better if the staff had the right tools, training, or workflow?
  • If someone quit the job, did they leave because of unclear or unrealistic goals, process problems, or poor job design? Or did other employers simply offer better opportunities?
  • If someone was fired from the job, was it because of a flaw in the hiring process, or a problem in how they were trained and managed?
  • Perhaps the issue is job design. What aspects of the work environment set people up for success or failure?
  • Are other external factors at work? Are other organizations experiencing similar challenges in this type of role?

Why these questions go unasked:

  • Some of these questions are uncomfortable. It’s much easier and more optimistic to assume that the right new hire can solve these problems.
  • Hiring managers are usually willing, but rarely eager to question their role in a hiring failure.
  • Without a market research capability, most organizations find it difficult to compare their situation to other organizations.

By not asking these questions

By not engaging with difficult, strategic thinking up front, you are left guessing at the true cause of your problems. When the right questions are not asked, the answers are never found.

Most people do not ask questions that cannot be easily answered. If benchmarking your role to other jobs and employers in the job market is a difficult task, most people don’t bother to ask. If diagnosing the cause of a project’s failure is convoluted and difficult, most people would rather move on vs. performing a tough post-mortem.

This also causes problem down the line – when your ad response is subsequently poor, you are left guessing at the cause. You could turn to the easy platitudes for answers, like “Nobody good is out there.” You might turn to the usual culprits - the economy, the time of year, etc.

 

Step Two – Who Do You Want to Hire?

Typical hiring practices skip step one and immediately start here, typically with the writing of the job description. What work does the manager want someone to do? Which skills are needed to do it? Typical hiring practices guess at what qualifications are needed based upon the hiring manager’s personal experience. So the primary question asked, “How much education and how many years of experience are needed?”  (Sadly, this common question manages to combine two of the poorest predictors of success on the job.)

Which questions usually go unasked:

  • What does success look like a year from today? How will we measure it?
  • What drives that success?
  • What are all the different profiles of people who could deliver those results?
  • And among them, who would want this job?
  • Why would someone want the job?
  • Does someone exist in the local job market with those skills?
  • Is the salary budget large enough to afford the right people?
  • How does the reputation of our organization compare to the reputation of other organizations who are competing with us for the same candidates?

Why these questions go unasked:

When your recruiting strategy is to run job ads (See step three), there is no way to answer these questions, because your only source of information is the random people who happen to respond to your ad. You have no way of learning anything about the larger context (the qualified people who did not apply); you can only see the resumes of people who did apply.   

By not asking these questions:  

You won’t write job ads that appeal to diverse candidate profiles you didn’t think of. Your laundry list of ad requirements might cause well-qualified people not to apply

And finally, by ignoring the success factors, or by not outlining your performance expectations, you also fail to say anything attractive to top performers – the people who are drawn to work environments where they can make a significant impact. By only talking about what you want, you might fail to make any appeal to the candidate’s interests.

But, as if that were not damaging enough, the far larger question that goes unasked at this step of the hiring process is this, “Of the people in this job market who might want this job, what handful of factors will best predict their ability to thrive in this job?” 

Failure to define the five or six key success factors (or conversely strikeout factors) dooms every following step of your hiring process. If you have not established a fair yardstick at this stage of the hiring process, your interview sequence (step four and five) is susceptible to hiring people who just look the part.   


Step Three - Where Do You Want to Look for Candidates? 

Typically, at this stage of hiring, a job description is circulated internally to staff and to supporters of the organization. The question typically asked is, “What job board should we post this on?” 

Which questions usually go unasked:

  • Is the job description the right message to use in job advertising? Does it offer the proper context to be appealing to people who are not familiar with your organization? How will your ad be perceived by the audience? Does it address the issues they care about, or does the ad mostly just talking about you?
  • Are employee referrals and ad response likely to yield a robust slate of top performers?
  • What kind of pool could you have with a different advertising or recruiting approach?

Why these questions go unasked:

Most small organizations lack the tools and ability to directly recruit candidates, and rely on advertising to fill the vast majority of open jobs.  And in a resource constrained world (tight budgets, understaffed HR teams, busy hiring managers) people do not ask more questions if the answer might add to their already-heavy workloads.

By not asking these questions:

You ignore the entire spectrum of people your ads did not reach—research shows that a large portion of the candidate pool won’t see an ad no matter where you put it (more than 80% of the total candidate pool according to some research).

Because you can’t compare your applicants to the entire peer group, only to the resumes who also answered your ad, most people have no idea how an ad might perform, nor have they researched the factors that affect ad response.

 

Step Four - Which Candidate Should I Interview?

Hiring managers typically read resumes in terms of who looks worth interviewing. This is a worthy question, but it is missing a few things.

Which questions usually go unasked:

  • What important factors does a resume not show? (Things like work-ethic, cultural fit, cooperation with coworkers).
  • What factors on a resume do you over-value and which do you under-rate?
  • What other career profiles could demonstrate a path to competency that you haven’t conceived of?
  • Is a face to face interview is the appropriate next step? Or would other strategies like telephone interviewing improve the hiring process results?

Why these questions go unasked:  It’s familiar and comfortable to line up interviews based on resumes alone. But it’s not effective.

People tend to look at what’s in front of them, and ignore what is not in front of them, and confuse what is readily observable with what actually makes a difference. But most of the qualified candidates in the job market are not responding to advertising. And most of what makes people successful is not found on a resume.

By not asking these questions: You will unknowingly filter your applicants into a more homogenous group than you realized. Then, because the candidate pool is so small, you will probably settle for the best person you have seen, but not necessarily the best person available. You might assume your only two options are to hire, or to wait for an unknown period of time in the hopes of doing better. But with no concrete information about whether you could, in fact, do better, this is a risky gamble.

 

Step Five  - Who Should I Hire?

During the interview, managers often make a gut decision about cultural fit and who they can see themselves working with. Sometimes it’s as simple as who you would like to have a beer with.  Sometime the manager looks for a track record of success.

Which questions usually go unasked: 

  • When discussing the job with candidates, have you been clear about your performance expectations? Have you talked in generalities or specifics?
  • Have you made your own assessment of the skills of each candidate, or relied on the candidate’s self-assessment?
  • What interview process best predicts success on this job?
  • Are the same factors that led to success elsewhere, going to predict success here, with this job?
  • Is performance in the interview a good predictor of performance on the job?
  • Is a candidate’s stated performance even an accurate portrayal of their personal performance? Or are they a rock star because they get credit for other people’s work (intentionally or not)?
  • Would more interviews be beneficial?

Why these questions usually go unasked

Interviews are generally uncomfortable for both the candidate and the hiring manager. So it’s no wonder that managers tend to stick with a familiar interview style. Few people realize just how poorly a typical interview predicts future job performance. Similarly, few organizations rigorously track employee turnover, allowing managers to learn from their mistakes.  

By not asking these questions:

Research shows that typical interview practices are ineffective at predicting performance on the job. And yet, the pressure has never been greater to hire people who can grow into the future demands of the role. By not asking the right questions, you overlook vital information that will help you make the right decision about someone’s future performance and work potential.

 

Step Six – What Salary Should I Offer?

You ran the search. You’ve determined which candidate is right for you. You’ve considered your budget limitations. Now it’s time to make a job offer.

What usually goes unasked:

Why these questions go unasked:

After a search has dragged on for a few months, managers tend to rush the job offer step in the desire to get the hiring process over with. 

By not asking these questions:

Many managers snatch defeat from the jaws of victory at job offer time. Instead of plunging into the job offer, stop and check in with the candidate. It’s important to understand the candidate’s perspective before making the job offer, or you risk offending your future employee.

 

Conclusion

When you realize how many questions are left unanswered by typical hiring practices, it’s obvious why most hiring results are so erratic and disappointing.  Once you start asking better questions in your hiring process, you’ll begin to find the answers you need:   

  • Is this the best person we could have found? Is the candidate demonstrably better than their peers at achieving our desired results in a work environment like ours?
  • Have I organized the department and designed the job so that the new hire is likely to succeed, and will I be able to replace them without too much difficulty?
  • Am I well-positioned relative to my competitors to be able to retain this new hire?

Typical hiring practices cannot answer any of these questions. 

By only asking the easy familiar questions, typical hiring practices systematically remove almost all the information needed to make a good hiring decision.

  • They don’t evaluate whether hiring is the right solution to the business problem.
  • They don’t reach the majority of qualified candidates, and arbitrarily limit who gets an interview among the people who do respond.
  • They fail to identify or properly assess the key factors that drive success

As a result, after a massive time investment, the vast majority of well-qualified candidates have still been systematically overlooked, leaving the hiring outcome almost entirely up to chance

It’s possible to make your hiring process more effective, but until your internal hiring practices are on par with the best executive search firms, engaging an outside expert can be easily justified.  

The Results-Based Hiring Scorecard

Topics: Working with Recruiters or Search Firms