It’s an all-out war for talent these days. If you are still operating as you have for decades, well RIP. Demand for executive search firms is rising as companies across all sectors recognize that they need help to find (and land) great leaders.
Companies that are using archaic executive search firms need to rethink their strategy. Headhunters—transactional order takers that recycle the same network, are paid full fees regardless of outcome, and that simply match candidates to bullet points on a job description—need to officially leave the building. Goodbye.
As the Founder & CEO of an executive search firm and as someone who has spent his entire career in an industry that I believe must change or die, here are the changes I predict for the executive search landscape in 2020:
Industry focus will be paramount
The old school method of finding candidates via keywords in databases or on social networks equals commoditization. If your executive search firm is using this method, shame on them and shame on you for engaging them—your company is not a commodity. What will never be commoditized is understanding and leveraging the infinite nuances of specific industries to find great leaders and build teams with diverse perspectives.
Each industry is complex in its own right. Understanding how that complexity translates to the kinds of leaders who would thrive in specific subsectors has become tremendously important to companies worldwide. For example, one of our clients in the Digital Health space is on the hunt for their CTO. As healthcare evolves to accommodate new payment models and the number of constituents increases (payers and employers and providers, oh my!), this company’s business model is transforming. They need a CTO who understands the various healthcare constituents well enough to design and build a product that serves all of them.
Let’s not mince words—this is an extremely complex search. Vetting these candidates and advising clients on why one executive would be more beneficial to their business than another requires extensive knowledge of the healthcare and technology ecosystems. Otherwise, the result is a poor fit, wasted money, and jeopardized growth—big stakes.
In today’s world, a strong rolodex is table stakes. It’s not enough to stay ahead. Companies do (and should) care how well their executive search firm understands their industry, their sub sector, their business, and key influencers within their ecosystem. That nuanced knowledge and expertise will set firms apart in this new era of executive search, and maybe—just maybe—these will be the new table stakes.
Timelines are getting shortened
If you’re still taking three months to make a decision on an executive search, you’ve got a problem. If your executive search firm is taking several months to present a slate of candidates, you have an even bigger problem! A sense of urgency across the board will be the new norm.
A competitive market (that we don’t see slowing down for the markets we serve) means companies better be decisive about candidates. Excellent candidates are getting multiple offers within days (and no, this is not an exaggeration—this has happened countless times this year). Be prepared to move through your search and make decisions about great candidates quickly to keep pace in 2020 and beyond. Agile executive search? Not an oxymoron.
Goodbye one-off searches, hello creative partnerships
Traditionally, executive search firms hire one executive for one fee. Not surprisingly, a lot of time and resources go into that one search. Increasingly, companies are choosing a partner who can leverage that knowledge further and support them beyond that one engagement. Companies are thinking in terms of ROI, and why wouldn’t they be?
These new creative partnerships can take many forms. They can mean utilizing the executive search partner for a team expansion or for another strategic search—one that’s crucially important to the business, for example, but not quite C-Suite level. It can also mean partnering with clients strategically in ways that allow for efficiencies, or something else.
Take, for example, one BioPharma company that has a massive internal database of candidates. They hired us to help find a strategic leader, and that engagement has since morphed into maximizing their existing database before they look externally. Together, we are now integrating technologies to cut down on the man hours to hire for this position (and others in the future). When you’re hired for one search, it’s hard to get creative. Companies want creativity and clever ideas for optimization, which means leaving one-off searches behind.
Ability > Skills
These days, abilities trump skills. It’s absolutely imperative that your executive search firm understands that. Executive searches have become less about what candidates can do right now and more about how they can grow and evolve with the company. Of course, executive search firms need to be able to do the job today (or you’ve really gone and hired yourself a bad partner), but things change so quickly these days that hiring solely for today puts you behind the pack.
Compare this to Bill Belichik choosing Tom Brady—stay with me, Patriots haters, because my point here is worth it. Brady was the 199th overall pick in the sixth round of the draft in 2000, chosen to be fourth on the roster behind Drew Bledsoe and two others. He was strategically selected for his “mental makeup and leadership skills” and because he was “the best fit for the [Patriots’] system.”[i]
19 years and all the really good stuff later, Brady’s career reinforces the idea that hiring for ability and potential versus experience and skills can be the best decision you’ll ever make. Executive search firms better know the difference between the two and be skilled enough to spot ability when they see it.
Tools and technologies don’t have secret powers
Some executive search firms tout flashy technologies and “never before seen” personality profiling as the cherry on top of their expertise (or even lead with this as their unique value). Sure, recruiting tools marginally increase efficiencies, but let’s be honest—that’s it. We’re all anxiously waiting for AI and ML to target and screen a candidate the way a human can, but this just isn’t going to happen any time soon, especially not at the executive level. If this changes, I’ll take a pie in the face, but for now, executive search is still all about people. And I have yet to see evidence that the new “proprietary” personality profiles are measurably better than traditional tests. Sometimes what’s always worked still works.
Diversity isn’t just nice to have, it’s a must have
What is your executive search firm doing to promote and encourage diversity? If the answer is nothing, or it’s not a priority, where have they been? Under a rock? This is a worthy mega-trend.
Companies are no longer ignoring research like diverse companies produce 19% more revenue[ii] and 48% of companies in the U.S. with more diversity in senior management improved their market share.[iii] In fact, many companies are now making diversity a key imperative for executive (and non-executive) searches. In many industries and functions, the vast majority of candidates are not diverse or female, which represents a daunting challenge for the many executive search firms that have been sidelining diversity for too long. If you’re not up for the task, you’ll be left behind.
Ushering in a new era for executive search
2020 will be a big year for executive search, full of all the promise that comes with a shiny, new decade. As far as we can tell, the talent war will continue to wage. With that comes shortened timelines and more creative partnerships between executive search firms and their clients. Executive search firms with industry expertise and an eye for candidates’ abilities over skills will rise to the top, with little to no help from recruiting tools and technologies. This new decade is the end of the road for conventional headhunting, so let’s ring in the new year by raising the bar for companies everywhere. Isn’t it about time we expect more from our executive search firm?
Dave Melville is the Founder & CEO of The Bowdoin Group, an award-winning executive search firm that specializes in leadership and strategic roles, recruitment process outsourcing (RPO) services, and major hiring projects for a wide range of companies, from small firms building out their executive team to larger firms sourcing talent for rapid market expansion. Connect with him on LinkedIn or see more articles like this one at https://www.bowdoingroup.com.
[i] https://www.businessinsider.com/patriots-draft-tom-brady-2017-1
[ii] https://www.forbes.com/sites/annapowers/2018/06/27/a-study-finds-that-diverse-companies-produce-19-more-revenue/#4797b330506f
[iii] https://inside.6q.io/benefits-of-cultural-diversity-in-the-workplace/