I’m sure some of you were attracted to this post because of the picture of my Golden Retriever, Layla. It might surprise you that she is a help when I pursue an executive search, as she reminds me (with dog treats of course) of the steps businesses should take when conducting a search process with an executive search consultant.
It’s helpful to list out these steps as we describe how business owners and executives can create a better executive search process.
The What of Executive Search
I can simplify this step by emphasizing that you identify, clearly, the roles and responsibilities of the executive position that you will want to recruit. Most often when performing a CEO or other C-level search I find that business owners know what they want – it’s just that they have not fully described what it is that they want. Sounds weird right? Well, that’s where further questioning by my helper is appropriate –
- What specific functions will the position be responsible for,
- Who will oversee the position,
- How many employees will the position oversee,
- What level of judgment and complexity are required to perform the job,
- What type and kind of contacts will the position have on a regular basis,
- If the person in the position makes mistakes, what are the financial and organizational consequences?
If the position is to be vacant or unfilled for a time, what are the consequences? What is the impact of not filling this position going to have on the other functions, positions, departments, customers, vendors, etc. ? This is directly relating to the next step, the how much.
The How Much
This step plays both ways from a cost perspective. You may initially think only of the search consultant’s fee, and yes that is one cost – of many. So, let’s list out several other costs that may be difficult but not impossible to develop, so that you begin to understand how much.
- Consultant’s fee – testing, assessments, travel, relocation costs, and consultant’s fees,
- Lost production – estimate the loss in productivity that not filling the position will have for one year,
- Training – estimate the cost to train the new executive in the position over a four-month period, understanding that this is when the executive may still be cost negative (i.e., not producing positively to the goals of the position and business),
- Compensation – estimate the compensation over four months while the search is being conducted, and include bonuses, stock options, and benefits, and then extend that to several years,
- Severance – severance fee, legal fees, outplacement costs, potential lawsuit defense costs,
- Business disruption – lost sales, lost customer, lowered morale, employee complaints,
- Cost of a mis-hire – a mis-hire for an executive can be as much as 27x an executive’s base salary.
I’ve referenced some of “when” above.
Essentially, when do you need to have the position filled and why.
- What are the objectives that you have as a business in filling the position,
- What is your time frame to have this new person working, and
- How will you ensure that the prior three steps are effectively addressed.
- Are your answers to “why” adequately answered? If not, then take the time to make sure you have fully done so.
Who will fill the position? Sure, that’s what an executive search consultant is here to help with.
- It helps you to clarify the direction that you want your business to go and grow.
- It helps you to identify production and/or service gaps in current functional business and personnel areas.
- It can enhance your ability to identify the right kind of person to fill the position.