Several years ago, marketing guru Seth Godin wrote and spoke extensively about why “small” is the new “big”. He listed a whole host of reasons why smaller businesses often outsmart and outsell bigger ones, including:
- Small means the founder makes a far greater percentage of the customer interactions.
- Small means the founder is close to the decisions that matter and can make them quickly.
- Small means you can tell the truth on your blog.
- A small firm is succeeding because they’re good, not because they’re big. So small companies are happy to hire them.
Let’s apply Godin’s logic to executive search. The industry is characterized by two types of companies. On one extreme are a handful of mega-firms, some of them publicly held, with big brand names and revenues above $500M per year. These large executive search firms typically cater to Fortune 100 clientele and have deep relationships with their boards. It sounds prestigious to say “we’re using a big-name firm”, but unless you’re a Fortune 100 company, your search can get very expensive, lost in the shuffle, and they will ultimately recruit from you after their hands-off time has expired.
On the flip side, there is a multitude of boutiques, most of which specialize in an industry and/or function. We believe strongly that most companies get better results in their executive search by partnering with the right boutique. By answering the following questions, we’re pretty sure you’ll come to that same conclusion and will look to companies like Felix Global for your next executive search.
CTA: How Felix Does Executive Search
Are you really dealing with the recruiter who will do your executive search?
When you engage a boutique for executive search, you deal directly with the person who will work on your project. In contrast, at big search firms, the search may be directed by a “Partner”, but, in fact, a significant portion of the work is done by less-tenured associates. These may be people you have never met, or people with minimal knowledge of your company or your business challenges and goals. As a result, the candidates may possess the functional match to the job description but may not have the cultural competence and traits (or what we call “the spirit”) of the job description. This can result in bad hires who don’t fit your corporate culture and perform poorly down the road.
Will you have access to more candidates?
Executive search firms have an ethical (and usually contractual) obligation not to recruit from clients. Big search firms have significant off-limits constraints, which reduces the pool of candidates. As these firms get bigger, this problem also gets bigger. While the big firms are becoming cleverer by defining what is off-limits around a project or a client – and not the company they represent – boutiques can access more candidates because they have fewer off-limits companies. In addition, a little-known fact is that candidates that are active on a search within a firm are also off-limits for any other search projects. Large firms can have literally thousands of active candidates throughout the firm at any one time, many of whom are unavailable for your executive search!
How many executive searches is the firm or consultant working on?
A typical search firm partner may conduct 15 to 20 assignments simultaneously, overwhelming their associates and research staff. They operate in a “book it”, “bill it” and “forget it” environment. Unless your executive search carries the highest fees or is relatively easy to complete, it may be relegated to the bottom of the pile. In contrast, boutiques typically work on fewer projects, devoting far more time and attention to each and every search. We recognize that our partners and associates are performing at their best when they have 3-6 projects at any one time, and so we take measured steps to adhere to that.
What about Completion Rates?
When it comes to executive search, boutiques have higher completion rates than big firms. Completion rates at big search firms are well-known to be in the 60% to 65% range. At Felix Global, our completion rate is over 90%. There are many reasons that a search does not get completed and not all of them are attributable to the search firm. But, with a 90% completion ratio, you know that Felix Global selects projects that we know we can complete successfully. It is imperative that we do so since a large portion of our retainer is performance-based and at risk if we do not complete the project.
Does the firm have in-depth knowledge of your company?
Because executive search boutiques have a business model that enables them to form a genuine partnership with you, they are willing to take the time to get to know you in the hope that this will be a long-term relationship and not a transaction. As a result, smaller firms like Felix Global usually are better at selling your opportunity and assessing candidates because we know you. By combining our access to talent with our knowledge of your opportunity and applying our proven performance-based assessment, we combine the art and science of executive search as true consultants in talent acquisition.
What is the firm’s process and how will they bill?
Many executive search firms operate on a “don’t ask, don’t tell” basis, convincing companies that the search process is mysterious and incomprehensible. The reality is that most big firm partners cannot explain their process, nor do they adhere to a proven methodology. At Felix Global, we believe that being transparent is key. That’s why we transfer all of the research we do on your project to you after the search is completed. This helps develop your database for future needs as well as to fill the specific open position. The same goes for our fee. Our initial retainer is invested in new research and name generation, while the second retainer goes to our operating costs. In contrast, the big firms often attempt to pad this by charging a high administrative fee (usually 10% of the retainer). We cap ours at 6%.
What are Felix Global’s differentiators?
Besides our people and our one-firm approach, we have a unique value proposition in how we leverage assessments and coaching into our executive search process. Many firms have similar capabilities, but few offer them as a part of the search. Our Talent Advisory Service is incorporated as part of the overall search fees so we can provide the expertise of external executive coaches untainted by organizational politics. This also includes a proven coaching methodology grounded in the stages of assimilation and the goodwill built with new hires who otherwise might “sink or swim” alone in their new roles. We provide this onboarding and acculturation coach for the new hires' first three months.
Big Fish…Small Pond?
If your company plans to do more than ten executive searches a year, you may have enough leverage to get the attention you deserve from the big search firms. But, if your needs for executive search are more focused, you will get far more personalized and attentive service from a boutique. Typically, big firms tout the strength of their network as the major selling point. The reality is that their network is full of previous placements that they are ethically obligated neverto recruit again. We start each project with fresh research; by getting the specific names and contacts of individuals currently in the roles you have asked us to recruit for. There’s no old names when we carry out your executive search, just new ones.
Bigger is not better in executive search. In fact, big search firms face significant limitations, obstacles to client service, and a lack of availability of the right candidate pool. Large scale makes it easier for search firms to build their brands and create their own economies of scale, but does it provide value to their clients? Ultimately, executive search firms are service providers. When evaluating vendors, look past the false allure of name brands and critically evaluate the quality of service you will receive. Determine the firm’s commitment to your company, assess its process and determine whether the executive search firm is passionate about serving your company’s needs and providing what you and your company want, not what they want to sell to you.
Don’t wait. Think big. Go small.
For more information on our Executive Search Practice, visit our site, or contact us directly, we’d love to hear from you!
Jim O’Malley, Managing Director & Practice Leader, Executive Search
Andrew Norrie, Managing Director & Practice Leader, Executive Search
Learn More About Our Executive Search Service