As a corporate CHRO for 25+ years, I bring three different perspectives to this guide: 1) I hired executive search firms when we needed a purple & pink zebra; 2) I was successfully recruited by them multiple times in my career; and 3) in my post corporate career, I have 10 years of experience providing Executive Search Consulting services.

WHAT COMPETENCIES/EXPERTISE SHOULD AN SEARCH FIRM HAVE?

1. Extensive Market Knowledge: An executive search company should have a deep understanding of the industry and the talent landscape. It should be knowledgeable about the current trends, market dynamics, and relevant candidate pools.
2. Comprehensive Search Process: The search firm should conduct a thorough and systematic search process to identify and evaluate potential candidates. This typically includes defining the position requirements, developing a search strategy, sourcing candidates, screening and assessing applicants, conducting interviews, and presenting a shortlist of qualified candidates.
3. Access to Top Talent: One of the primary advantages of engaging an executive search company is their ability to tap into their extensive network and access high-caliber candidates who may not be actively seeking new opportunities. It should have connections and relationships with executives in various industries and be skilled at identifying and attracting the right talent.
   1. “Almost anyone can find a black and white zebra. As The HR Godfather^TM, I find purple and pink ones.”
4. Confidentiality and Discretion: It must understand the importance of maintaining total confidentiality throughout the search process. They should handle sensitive information with utmost care and ensure that candidates’ privacy is respected. This is particularly crucial when conducting searches for senior-level or executive positions.
   1. For any search that a client company wants to be done on a confidential basis, the search firm should utilize a Non-Disclosure Agreement for signing by candidates prior to revealing the client company’s name.
5. Customized Approach: The firm should be able to tailor its strategy and process to meet the specific needs of the company. It should take the time to understand the company’s culture, values, and unique requirements for the role. This helps to ensure that the candidates presented align with the organization’s goals and fit the desired leadership profile.
   1. As part of this step, the search firm should create a customized Organization and Position Summary as to provide information about the opportunity for potential candidates. The Summary is typically three to six pages, and serves as a valuable marketing tool.
6. Rigorous Evaluation and Assessment: The firm should employ robust assessment methods to evaluate candidates thoroughly. In addition to in-depth interviews to assess competencies, experiences, and other requirements for success, it should have the capability to provide client companies with various psychometric assessments. These include behavioral style such as DISC^TM, emotional intelligence and cognitive aptitude in order to provide comprehensive insights into each candidate in order to help predict performance success.
7. Negotiation and Hiring Support: Once suitable candidates have been identified, the search firm can facilitate the negotiation process between the company and the candidate, including the compensation package, relocation assistance, and other contractual matters. They should also provide guidance and support throughout the final stages of the hiring process, such as offer of employment letters with applicable restrictive covenants.
8. Post-Placement Follow-Up: A good executive search firm doesn’t consider their job done once a candidate is hired. They should maintain contact with both the company and the candidate to ensure a smooth transition and integration into the organization. They may provide support during onboarding and address any concerns or challenges that arise.

WHAT SHOULD AN EXECUTIVE SEARCH FIRM’S ULTIMATE DELIVERABLE BE?

An initial pool & of fully vetted candidates (with additional ones as desired) who meet or exceed your specifications, including factors such as:

1. Non-Compete Agreement: None exists or one exists but is not applicable.
2. Geographic Location & Travel: Reside where you want them to and, if applicable, ability to travel.
3. Total Cash Compensation*: Candidate expectation is in line with the range you have indicated, with the specific total being dependent upon your assessment of the candidate of choice

   *Defined as salary + variable compensation (e.g., performance-based bonus) + signing bonus if applicable (inclusion or exclusion of this third component may vary from search firm to search firm)

   1. From my experience I am skeptical of candidates who say they are open to a reduction in their Total Cash Compensation. The search’s goal is to identify outstanding candidates whose current compensation plus an expected increase is within the client’s targeted compensation.

4. Skills, Competencies, and Attributes & Experience: Meet or exceed these

5. Education: Meet or exceed, including professional certification if applicable (e.g., CPA or CMA)

6. Cultural Fit: Compatible with yours, including in candidate’s leadership style

WHAT IS THE LENGTH OF TIME FOR AN EXECUTIVE SEARCH TO BE COMPLETED?

The timeline for hiring an executive search firm to selecting the candidate of your choice (excluding the candidate’s resignation notice to their existing employer) can vary widely depending on multiple factors. Here are some key dynamics that can impact the duration:

1. Position Complexity: The more specialized or senior the position is, the longer the search process may take.
2. Industry and Function: Some industries or functions may have a smaller pool of qualified candidates, leading to a longer search process.
3. Search Firm: Its approach and effectiveness in sourcing, screening & interviewing impacts the timeline.
4. Interview Scheduling Hurdles: It can take time to coordinate interviews with qualified candidates, (especially since most we be currently employed and their responsibilities to their employer can limit their time for interviews).
5. Client Decision Making: The time it takes for the hiring organization to review candidate profiles, conduct interviews, and make a final decision can vary based on internal processes and decision making structures.
6. Time of Year: The process takes longer during the Summer when candidates and clients may be on vacation. Also, no candidate desires to leave their current company when the payment of a performance bonus is pending (commonly, after the company’s books have been closed and the financial results have been verified/audit).

Considering these factors, the entire process can take anywhere from six weeks to several months. It’s essential to have realistic expectations and open communication with the search firm to ensure the process runs as smoothly as possible.

Once the search strategy is in place, the executive search firm begins actively sourcing and identifying potential candidates. They may leverage their extensive network, utilize databases and and conduct direct outreach to individuals who fit the desired profile.

• This includes reaching into companies the client explicitly identifies as of special interest as a candidate source (e.g., a competitor or a company known for its talent in a given function).
• With regard to reaching into a competitor’s organization as a source of talent, it much less antagonistic for this to be done by a search consultant rather directly by your company.

WHAT IS THE TYPICAL FEE CHARGED BY AN EXECUTIVE SEARCH FIRM?

The fees charged by executive search firms can vary widely depending on several factors, including the complexity of the search and/or the level of the position being filled. Typically, an executive search firm’s fee is a percentage of the candidate’s first-year total cash compensation as their fee. This percentage can range from 25% to 35%, with the specific percentage being slightly lower for clients who warrant a “volume discount”. For searches where the total cash compensation is above a certain annual dollar amount, it is possible to negotiate a fixed dollar fee.

Additionally, executive search firms may charge additional expenses related to the search process, such as travel expenses, candidate assessment fees, or advertising costs. These expenses are usually separate from the fee.

WHAT IS THE NORMAL FEE PAYMENT SCHEDULE?

By far the most common schedule is 1/3 at each of the following three steps in the process: 1) signing of the search contract by the parties; 2) submission of the firm of an appropriate number of qualified candidates; and 3) start of employment by the candidate who has been hired.

WHAT HAPPENS IF THE CLIENT SUSPENDS OR CANCELS THE SEARCH PRIOR TO ITS SUCCESSFUL CONCLUSION?

In this event, the client is expected to pay for services performed by the search firm up to such time. For example, if the client does so after having be given the initial pool of candidates, it is typically obligated by the search agreement to pay the 2^nd fee amount.

WHAT IS THE TYPICAL REPLACEMENT GUARANTEE?

A search firm typically guarantees to replace the candidate hired at no additional fee if the employment separation for a period of 90 calendar days to 180 calendar days from the start date of the candidate’s employment. This in part related to the position type and/or level.

• It is not unusual for there to be a correlation between the negotiated fee and the length of the replacement guarantee.
• For example, a search firm may agree to reduce its typical fee based on the quid pro quo being that the replacement length is also to be reduced.

Also, a firm may stipulate that its guarantee has conditions, such as it will replace the employee at no additional fee to the client in the event that the candidate/employee:

1. Voluntarily resigns UNLESS the resignation is due to circumstances such has:
   1. 1) The employer directs the employee to take an action that is unlawful
   2. 2) The employer’s failure to fulfill a compensation, benefit or other requirement as contained in the offer letter or in a subsequent written agreement between the employer and the employee
2. Is terminated for reason other than FOR CAUSE
   1. NOTE: Even if the person is an at will employee, it is nonetheless a sound HR practice to have FOR CAUSE defined in an employee handbook, policy or some or company document.

Author: Salvatore LoDico

   The HR Godfather ^TM

The question of counter-offers is certainly not a new one. However, in today’s labor market it is worth looking at through a different lens. This includes looking through the eyes both of employers and candidates of employers and candidates who are offer recipients.

• The perspectives I bring to this issue are based on a career of experience as a CHRO & for the last 10 years as a Search/HR Management Consultant.

Let’s look first at an employer’s lens. At some point, almost every employer has experienced or will experience a highly valuable person submitting their resignation. Too often, this occurs with the employer being surprised.

• One way to avoid (or at least minimize) being blindsided is to do conduct “stay” interviews. Think of them as checking the barn door before a valuable racehorse gets out of the stall & stable, whereas exit interviews identify how to possibly prevent it happening with other valuable racehorses.

THREE COMMON REASONS WHY COMPANIES MAKE COUNTER-OFFERS

1. In general, companies do not like to be “fired” by an employee, which, in effect, is what a resignation equates to or is perceived as.
2. They realize the individual is more valuable than they have demonstrated
   • Including pay, which is the common currency in business (along with title) to convey worth
3. They recognize they have failed to provide an employee with the appropriate reasons to stay, including:
   • Supervisors/managers/executives who understand and practice good leadership skills, including:
     • Trust (being trusted & trusting), communications, teambuilding, collaboration
   • Career/professional development
     • Today’s individuals (especially millennials) are accused of not being as loyal as prior generations. Actually, they have a high degree of loyalty to their careers & to those companies which satisfy their desire for professional development
     • Remember they saw or heard about their parents or grandparents losing their jobs after years of service as part of a reduction in force
   • Work-life balance, including schedule flexibility
     • Research shows many in today’s workforce will trade dollars for time off!
   • Pay & Benefits
     • This needs to be viewed as merely as “the price of admission to the employment game”.

HOW DOES AN EMPLOYEE WHO HAS ACCEPTED AN OFFER REACT TO A COUNTER-OFFER?

• YOU MAY THINK IT’S AN OFFER THEY CANNOT REFUSE…BUT

HERE ARE THE TYPICAL REACTIONS:

1. No thank you because:
   • “I have made a commitment to this new company & I keep my commitments.”
   • “My decision to leave is about more than just my compensation.”
   • “It’s too little too late.”
   • Or
   • Without saying it, they are concerned that going forward the company will purposely or sub-consciously view them less positively, & this will have an adverse impact on their career with it.
     • This is not necessarily an unfounded concern. It is not uncommon for a company to decide to ensure it will not be got off guard again by: a) developing someone to be ready to take over or b) starting a confidential search to find a replacement for that employee.
2. Yes, I’ll stay because I really did not want to leave.
3. Don’t smile yet! Here are statistics for employees who accept a counter-offer to stay:
   • Within 60 days, 50% of employees are actively looking again.
   • In 6 months or less, more than 50% of them will end up leaving – usually for the same reason(s) they initially were going to.
   • Only 15% will stay for at least 2 years afterward.

Author: Salvatore LoDico (The HR Godfather ^TM) 

Senior Partner, Spuhler Associates/Founder & CEO, Trinity HR Consulting, Inc

My HR career has spanned 40 years so I’ve seen many changes. I remember a time when not everyone was given the same opportunity in terms of being hiring or, if hired, promoted. Most commonly this denial of equal opportunity in the work place applied mainly to minorities & women, but it sometimes also applied to some nationalities or religions.

Throughout my career I’ve consistently advocated for equality. I often made the case for equality by pointing out how unfair & unwise (translate as “stupid”) to exclude individuals from any group.

• For example, excluding or treating differently the 10% of the population who are lefties or the 9% with green eyes.
• After I worked my way up in the corporate world to the executive level (despite being both left-handed & green eyed 😎), I ensured equality prevailed — not because the law requires it, but because it was & still is the RIGHT thing to do.

My concern is that today the principle of EQUALITY is being replaced with that of EQUITY. Let’s not be so naive as to believe that equality & equity are the same–they are not. Stated in the most simplistic way, EQUALITY is about for all to have equal OPPORTUNITY without regard to anything other than merit. On the other hand, EQUITY is about having equal OUTCOMES, regardless of differences in the preparation, effort, attributes & ability of individuals.

• The former recognizes that preparation, a strong work ethic, skills & abilities lead to successful performance & in turn to the fruits thereof, including career advancement.
• The latter seeks to have the high performing individual & the one who is not as capable BOTH TO HAVE THE SAME OUTCOME. This means both are to be recipients of the same fruits in the same amount regardless of relevant factors.

From my perspective, I strongly belief that inequality was & always will be unfair & an unwise, flawed business practice, but so is the agenda of those whose objective goes beyond equality to equity. As HR professionals &/or others who are in a position to impact the workplace of the present & of the future, let’s advocate for EQUALITY, NOT EQUITY.

Author: Salvatore LoDico, SHRM
               The HR Godfather™
               CEO, Trinity HR Consulting, Inc
               Senior Partner, Search Associates (Executive Search)

As even Captain Obvious knows, there are two basic categories of individuals within the labor force. Simply stated, there are:

• 1) Active candidates – individuals who have their resumes on job sites, have contacted recruiters & let those in their network know they are looking for a new job
• 2) Passive candidates – individuals who are not pursuing a new job

Too often, a company’s approach to recruiting focuses the vast percentage of its time and budget on active candidates, while essentially ignoring passive ones. Did I hear someone say, “Of course! Why would I waste time and money on individuals who are not seeking a new job?”

Like most of you, I don’t like to waste my time or my money. Yet during my 30 year career as an HR executive followed by 8 more as Trinity’s Founder & CEO, I have intentionally sought out passive candidates — and have often been successful in recruiting them.

Let’s start with why I purposely sought them for my companies during my corporate career and still do for Trinity’s client companies. It is because they:

So the natural question is, “How do I/my organization achieve success in tapping into the passive market?” I’ll address this essential question in Part 3 of this article series.

Author: Salvatore LoDico, CEO of Trinity HR Consulting, Inc
The HR Godfather™

If you are reading this, you almost assuredly know this statement to be true – “Right now, finding good employees is as hard (or even harder) than ever.”

Let me pose some important questions:

• 1) Is your posting an ad on one or more of the most often used job sites producing the volume & caliber of applicants that you want?
• 2) Is your organization’s level of talent acquisition competency at the expert level?
• 3) Do you have the necessary resources allocated to this challenge?
• 4) Do you expect this upside-down labor market to improve soon?
• 5) Do you think there’s a “magic bullet” solution?
• 6) Is the adverse impact of your not being able to find & hire something you want to or can afford to continue living with?

The most common responses to these questions are:

• 1) It used to, but this is not working anywhere nearly as well as it used to.
• 2) We may not have been experts, but we were doing a relatively good job at it – but not now.
• 3) Not enough because of how much more time needs to be spent on hiring.
• 4) Speaking realistically, I doubt it.
• 5) No, like most business challenges, the solution has multiple components.
• 6) Absolutely not.

Here are some actions that an organization can take:

• 1) Enhancing the skill level of your recruiting staff
  • Improving the skill level of employees is almost always a good step. However, the length of time to get the results you desire may be too long.
• 2) Hiring an employee or employees with greater recruiting skills
  • Hiring a skilled recruiter or recruiters as employees may be very difficult because they (just like other skilled employees) are in great demand.
• 3) Offering hiring bonuses to candidates
  • This certainly has proven to be effective in past employee shortages, and is again proving to be somewhat effective in this shortage.
• 4) Providing retention bonuses to existing employees—at least to those in key positions 7/or hard to fill ones
  • Same comment as to hiring bonuses applies.
• 5) Incentivizing current employees to become “recruiters” with their family, friends, other soccer parents, those at their church & others.
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  • This approach certainly doesn’t work if your employees do NOT feel good about their being an employee of yours.
  • This is a subject for another time!
• 6) Turning to search firms since the really good ones are proving they are able to find talent even during this cycle
  • A search firm’s talent is finding talent – even in difficult times such as now.
  • Yes, it is expensive but when you count the cost of not doing so you may conclude the expense is justified, especially given the results they deliver

Stay tuned for “FINDING EMPLOYEES: THE IN’S & THE OUT’S, PART 2”

Author: Salvatore LoDico, CEO
The HR Godfather™

In Part 1, we looked at several aspects of this perfect storm, including:

• The unfavorable to employers imbalance between talent supply and demand
• The pent up desire by employees to move to a new position
• The cost of replacement of departing employees

In Part 2, we looked at other aspects, such as

• The major causes of employees leaving
• Employee expectations of their employers
• Actions which organizations can take to improve employee satisfaction and thus retention

Now in Part 3, we will look at:

• The specifics of what potential candidates will ask at the onset on being contacted
• Achieving greater success in acquiring the employees you need

We all know the current labor-job market is horrific for employers and great for employees —11,100,000 vacant jobs in the U.S.

• The media often zeroes in on certain segments of the market being so bad for employers, especially those with service-related workers such as restaurants and bars.
• The reality is that this out of balance demand – supply is applicable for all types and levels of positions — from entry level ones to office workers to skilled professionals to management positions all the way to the C-suite positions.

In my lengthy HR career, this is by far the worse imbalance of which I’ve been a part.

In Trinity’s interaction with its clients and with potential candidates with whom we engage, here is the list of what the vast majority of candidates are expecting (often, “demanding” may be more accurate) in order to consider making a move. The typical sequence of their questions is as shown.

Without the answer to these 5 aspects of the position being “positive” ones in the eyes of the prospective candidate, they will decline interest the vast majority of times.

• By the way, if the answer to the first question is not “positive”, it is highly unlikely they will even be willing to talk further.
• The same thing is true if the answer is “positive”, but the next answer is not.

SIX WAYS TO ACHIEVE GREATER SUCCESS IN MEETING YOUR STAFFING NEEDS:

Author: Salvatore LoDico, CEO
The HR Godfather™

In Part 1, we looked at several aspects of this perfect storm, including:

• The unfavorable to employers imbalance between talent supply and demand
• The pent up desire by employees to move to a new position
• The cost of replacement of departing employees

In Part 2, we will look at other aspects, such as

• The major causes of employees leaving
• Employee expectations of their employers
• Actions which organizations can take to improve employee satisfaction and thus retention

Below is a list of the most common factors that cause employees to seek to make a change

The above reasons are ones about which the employer has virtual little or no control – thus, we categorize them as non-addressable.

• An exception is re-location, which in today’s world of work has demonstrated that many positions are able to be successfully performed remotely.
• Some of you may be thinking that reason 1) is also addressable — by assuring employees they need not be concerned about their job security. Trinity’s experience is that once the seed of doubt is in the mind of employees, it is very difficult to counteract it — short of continued employment being guaranteed.
• Likewise, 2) may sometimes also be addressable – via remote work or an in person/remote work hybrid.

Below is a list of the most common factors which employers are able to successfully address—to varying degrees.

Let’s now turn our attention to each of these.  Before doing so it should be recognized that often no one single factor may be the reason an employee decides to look elsewhere or to be willing to listen to external opportunities.

• 1)  Job Specifics
  • This factor frequently entails several different aspects, such as:
    • a) Mismatch of an employee’s areas of interest, education and/or experience
    • b) Capability of the employee to perform the position’s duties and responsibilities – including both their being unable to do so as well as their being able to perform higher level work
    • c) Workload that is too great and so can overwhelm them or be too stressful
• 2)  Career Development & Advancement
  • This occurs when an employee is not being given opportunities to grow their knowledge and skills (in terms of their depth &/or breadth).

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  • In turn, this leads to an employee believing their career is dead ended & thus leaving.
• 3)  Work-Life Balance
  • If an employee feels their workload or schedule is such that their life is consumed by their job, the person eventually decides that leaving is the answer to restoring work-life balance.
• 4)  Relationship with Supervisor
  • For employees this relationship typically serves to form their perception of the organization as a whole – not surprising given that an employee has more interaction with their immediate supervisor than anyone else.
  • A relationship characterized by an employee having any of the following feelings often is the trigger or the tipping point in their decision to leave.
• 5)  Work Environment
  • This generally consists of a wide-ranging collection of factors, such as:
    • a) Organizational culture
    • b) Leadership style
    • c) Communications
    • d) Policies & procedures
    • e) Physical facility
    • f) Flexibility & receptivity to ideas, change & the like
    • g) Social norms
• 6)  Pay & Benefits
  • These two go hand in hand, & today’s world employees are able to get information as to what other organizations provide – such information may or may not be accurate, but employees use it as their measuring stick
  • Pay & Benefits have two key facets:
    • a) Internally equitable
    • b) Externally competitive

In Part 3, we’ll delve into what actions employers should take to address the expectations of employees, and therefore be an employer where current employees want to stay & to which potential employees are attracted.

Author: Salvatore LoDico, CEO
The HR Godfather™