At M&A Executive Search, we’re experts at finding the right leadership talent that is vital to long-term success. We conduct local, national, and international retained searches from director to “C” suite levels. As we are a boutique firm, your executive search will be handled by a senior partner with extensive experience in your industry. Our focus is on finding the right candidate by using our proprietary culture assessment and Profitable Leadership Process to ensure the best fit for your culture and team.
M&A Executive Search is considered the preeminent executive search firm for manufacturing and aligned industries. Together with Monarch Leadership, M&A Executive Search provides a proprietary culture assessment to our clients that set us apart from other firms.
M&A Executive Search Finds Candidates that Fit Your Culture
We understand what it takes to ensure every candidate is right for the role, the team, and the culture. The culture assessment attributes to our firm’s 95% success rate by ensuring each candidate successfully integrates into their new position. The assessment is used in our search process to identify an organization’s current culture, and to measure whether select candidates will fit into the culture—no more using simply gut feel when it comes to measuring culture fit.
One of the biggest changes we’ve seen at M&A Executive Search over the last two decades in the workforce is the “path” to C-Suite, executive roles. It used to be that workers would spend 20+ years with the same company, slowly working their way up the ladder until they were one of the longest-tenured employees and felt they were owed their due. While there is certainly nothing wrong with that path, many companies are seeing great benefits to hiring everything from lower-level executives all the way up to CEOs from outside their company leveraging executive search consultants.
What criteria should be used for selecting retained executive search firms?
As with hiring any service provider or management consulting firm, clients should be looking at the relative value proposition relative to their price to do the work. Since the price difference between the firms can vary substantially it’s important that you are getting proportional value from the higher priced firms which is often not the case. Additionally, organizations often buy-in to specialization as a key criterion for selecting a search firm assuming that the experience doing CFO searches or searches in their industry will enable a higher value proposition. This is also not always the case, especially when the specialization is on high level role. (e.g., the difference in price between a firm charging 50% vs. one charging 25% for a CFO search amounts to $160K vs. $80k which is a huge difference if the value provided and results are nearly the same. Every executive search firm, both retained recruiters and contingency recruiters will tell you they produce great results quickly. Most will have some experience in many different kinds of searches and will sell their experience. Here are some things that client organizations should focus on in evaluating search firms:
- How much time and involvement will the senior level people spend on the search?
- What is the implicit value proposition based on the rigor of their process in each of these areas?:
- Defining the role and requirements
- Comprehensive sourcing with proactive outreach to passive candidates and top talent – how quickly will they produce a viable pool of candidates and job seekers.
- Tested and viable evaluation process that includes some way to evaluate cultural fit
- Transparent way that client organizations can monitor and measure if they are fulfilling on their promise.
- Do they do reference and background checks and other final evaluation tools.
- Offer for integration services and cost
What is their guarantee if the candidate doesn’t work out in 3 mos., 6 mos. or a year? Some firms will do the search over for free if the candidate leaves for whatever reason within a year. This guarantee can be valuable but also ensures clients that the executive search firm is sincerely focused on the long-term fit of the hire.
Candidate Evaluation & Selection
There is a shortlist of four general areas for defining requirements of candidates or fit. These are also the key evaluation areas:
- Competency Fit – Do they have the ability or skill to do the role and experiences that demonstrate they can do the role.
- Cultural Fit – Will they do the role in a way that is needed. Cultural fit could mean finding potential candidates that fit with the current organization and the way they operate. Cultural fit could also mean finding candidates who will lead a needed change and operate differently and more effectively than the current organization.
- Intelligence – Intelligence can be measured and can make a significant difference is dynamic situations. Intelligence involves both intellectual and social intelligence.
- Organization / Job Specific Considerations – Compensation, career runway for succession planning, relationships, willingness to relocate, …
A reputable executive search firm should have a framework and associated tools for evaluating candidates and this is a key part of their value proposition that they can offer to their clients. There are many organizations that lack an approach for evaluating candidates and as a result, go by the “gut” of the decision makers. While this can work if you have decision makers that are skilled in evaluating people, it often can lead to ineffective hiring decisions. Additionally, when there are multiple decision makers in the hiring process, the lack of an objective framework for evaluation will lead to disagreement and potentially less optimal hiring decisions.
Evaluating the cultural fit of qualified candidates for the role and the organization is a critical part of an executive search firm’s value proposition. Top leadership consultants and the association of executive search recognize that one of the most common reasons for hires not being successful is cultural fit. This fact demonstrates that organizations have in evaluating cultural fit in the interview process. Executive Recruiting firms that provide an approach to evaluate culture fit can add significant value in the evaluation process.
What are the different fee and commitment arrangements for executive recruiters?
The three primarily differences in the recruiting arrangements are defined by the level of exclusivity, payment structure and timing, and how the fee amount is determined. All three of these are mutually exclusive components of the arrangements and could be combined in various manners, however, most executive recruiting firms have a specific approach for fees and generally don’t mix and match these 3 components. For example, “contingent search firms” work on a non-exclusive basis and get paid only upon placement and tend to have lower fees while “retained search firms” work on an exclusive basis and charge and upfront fee and get paid as the work progresses and tend to have higher fees. The following are the components:
- Exclusivity – Hiring an executive search firm on an exclusive basis means that you give them total responsibility to execute the ideal process to fill the position. Typically, all candidates that come to the company in any manner will be directed to the recruiting firm for evaluation. This type of single partnering approach enables the search firm to provide a single point of evaluation of candidates and, enables, the recruiting firm to invest significant resources because there is a high probability that one of the candidates will be hired and they will be paid for the effort. Conversely, hiring an executive recruiting firm on a non-exclusive basis means the recruiting firm will be one of several sources the client will use to get candidates which could include other firms and their internal resources. The approach creates an environment where each of the competing recruiters has a small to medium percentage of getting paid for their efforts. If an Executive Search firm in this arrangement does comprehensive sourcing, it’s likely that this significant effort of prospecting and building awareness, and selling the opportunity will result in a portion of the candidates they uncover to approach the client directly without mentioning the search firm. This type of environment forces these contingent recruiters to quickly with minimal effort source as many candidates as possible and not the best candidates and spending minimal time on evaluation. In many cases an executive search firm working in a non-exclusive arrangement will spend minimal time on sourcing and not surface the best candidates and hope for the best as a comprehensive sourcing approach is costly and there is risk that they will not get paid for this effort.
Client companies may generate some candidates quickly using a non-exclusive approach, but, they won’t be the best fit candidates and it will require the client to do much of the evaluation. Additionally, since each firm is executing a similar sourcing process, this redundancy will likely generate fighting over presenting the same candidates and require the client to play a referee role typically degrading the relationships with the search firms. Clients will typically get better results if they hire headhunters on an exclusive basis, assuming they are a good search firm and manage the search firm appropriately for timely and comprehensive results.
- Payment Structure & Timing – The trigger event for getting paid and the timing of the payments are the two elements to consider around the payment structure. First, what will trigger payment to the recruiting firm. The two extreme options are (1) having clients either pay for service and on a retainer basis or (2) having clients pay for end results or the hire. The traditional approach used by most “retained search firms” is something in between where clients pay a portion at the start of the effort and then after meeting various milestones with the final milestone being the actual hire. Another approach is to pay on results only if a hire is made. In this contingent payment approach there is a chance that the recruiting firm will not be paid for the effort, leading to the firm using a less resource intensive approach. However, as long as exclusivity is maintained and the hiring firm demonstrates that hiring is certain and they will be reasonable in terms of the criteria for hiring, paying contingent and at the time of hiring is not a huge issue on search firm performance.
It is generally in the client’s best interest to have some payment for services rendered at the beginning or based on a milestone as it lowers the risk for the Executive Search firm since they are not in total control of the hiring trigger. Making some milestone payment will generally lead to better results. There are many executive search firms who will not take searches with a payment structure that doesn’t have some element of pay for services because of the risk and cashflow implications. Further a pay for services approach enables more flexibility for the executive search firm and the client organization to work together. For example, perhaps an organization has an internal candidate they are considering hiring and want to see what other candidates are available externally before making the hire. With a pay for services approach, equitable ala carte services can be negotiated that are fair to both parties. In this case a pay for services approach would enable a solution where the Executive Search firm would be willing to generate comparison candidates for part of their fee.
- Determining Fee Amount. – The standard in the executive recruiting industry is pricing search services as a percentage of the first-year compensation of the candidate hired plus expenses. The actual percentage can vary significantly by firm as can the amount of expenses charged. All executive search firms have expenses to execute on a search and some firms arbitrarily, charge clients higher expenses than others. It’s important to evaluate total fees including expenses when negotiating or selecting search firms. Typically, the pricing as a percentage of the first year compensation will range from 15% to 40% with the larger and established firms realizing higher percentages. However, for some firms with, significant expense charges the implicit fee can be as high as 50%. Another approach used for pricing is a fixed fee approach where the client and executive search firm agree on a set amount to complete the search. Typically, the fixed fee amount is simply based on the estimated fee from a percentage of first year comp perspective. The advantage of a fixed fee where the search firm gets paid the same amount independent of the compensation of the hired candidate is that it puts the client and search firm both motivated to get the best person in place at the lowest compensation needed.
One interesting aspect of the traditional aspect of pricing based on the compensation of the hired candidate is that clients pay more for more executive level and top executive positions and less for non executive positions and lower paid positions even though the time and effort to make an executive hire for each is often similar and, in some cases, can be easier for higher level positions which are in greater demand. As a result, the typical executive search firm can typically reduce their fees on high level searches while still maintaining strong margins. Conversely, many executive search consulting firms are unwilling to take on lower level and difficult searches because the margin can end up being negligible. For these lower level and difficult searches, a fixed fee approach can be more equitable for the firm and client.
Finally, most executive search services firms are willing to provide reduced fees when you commit to multiple searches at a time or over the course of year. By doing this it creates efficiencies for both the search firm and the client.
Completed Searches from M&A Executive Search
Take a peek at recently completed custom industry-specific recruiting searches from Minneapolis-based M&A Executive Search.
- Vice President of Sales
- Director of Sales
- Vice President of Business Development - Finance & Retail
- Vice President Account Sales
- Account Executive
- Business's Development Executive
- Sales Rep
- Sales Executives
- Business Development Manager, new sales
- Director, Sales & Business Development
- President and CEO
- Senior Vice President
- Senior Executives
- Board Member
- COO & CFO
- General Manager
- VP Human Resources, HR Department
- VP Sales and Marketing
- Director, Marketing & Business
- Product Marketing Manager
- Director, Integrated Marketing
- Director, International Sales & Marketing
- Director, Product Marketing
- Director of Supply Chain Management
- Executive Director
- County Administrator
- City Manager
- Director, Communications
- City Manager/Administrator
- Chief of Police
- VP of Service
- Senior Director & VP of HR
- Director of IT
- Senior Director of Safety
- Transportation Manager
- Safety and Training Manager
- Quality Manager
- Medical Director
- Manager, On Road Adjacent Markets
- Project Managers
- Manager of Payroll
- Manager, Die Cast Plant
- Director of Lean Manufacturing
- Director of Distribution
- Director of Sales
- Director of Performance Assessment
- Director, Flex Business Unit
- Vice President of Quality
- Director, Data Warehousing
- Director, Manufacturing
- Vice President of Procurement
- Director, Engineering
- Director, Research & Development
- Vice President, Purchasing