Anatomy of an Executive Search – The Rainmaker

Our business is growing and I am amped about it. We have new products and tools coming out that are going to blow the lid off of strategic talent acquisition, and it’s been a long time coming. We just hit year six. We are profitable, stable, and the brand is growing. I have the team partnered up with PR resources, marketing resources, and we are getting ready for a nice direct push. Our advisors are ready for the incoming work that has us booked up though the fall, and I have several people on backup as we need it.

But direct marketing and sales is not the only way we are growing this business. We have learned that our services and technology is a strategic advantage for HR service providers that sell to the same market that we do. They obviously don’t sell strategic consulting – they position payroll services, outplacement, recruiting, legal services, technology and so on. None of them are competitors, because we just don’t have that many.

But they have plenty.

Its no secret that we offer exclusivity. Its a principal we had since I founded the business. I didn’t realize how powerful that was until HR service providers had tools that their competitors did not have – our tools. And now we have an opportunity to leverage that. We are hunting for providers of technology and services typically purchased by HR organizations to buy our services and Pando technologies, and make it part of their own service offering. In return – we don’t offer it to their competitors. Ah ha – a sales differential. Ah ha – a retention tool. Nice.

But these deals are huge, multi-faceted, multiple years, and full of intellectual property pitfalls. It’s not a $X0,000 annual license for a technology that needs to be renewed each year. I need a rainmaker. Someone who can chase down the safari sized deals, and make it work. I know that I am instrumental to the deal, but I have a business to lead too. I have to find a rainmaker that can get these deals started. It won’t take many to grow the business, but I have feeling we are going to plenty of companies say “we can sell it, but we won’t buy it.” I am not looking for channel sales 😉

It’s not going to be easy, but I know it’s straightforward. This is not my first rodeo in finding executives – and that is what this job is. An executive who has savvy, expertise, can close and has been there and done what others think they do. I want Alec Baldwin in Glengary Glenross. Coffee is for closers only.

So as I was preparing for this, I thought “why not blog about this and tell people how I am doing it?” I tell people in a closed door session what I would do, and it’s not a secret, so why not expose it this way…so here is blog #1

Who did you buy from?
First item on the agenda? Make a killer list of my contacts who probably deal with these folks. I have had a few interactions with folks directly, and of course they are on the list. I have good network of procurement officers at corporations, legal folks who navigate deals, and of course CHROs and heads of staffing. Turned that list over to my research team, and appointments are being set up. My approach is tell the story – here is how my business is going to grow, who can help me do that, and don’t point me in the direction of some wanna-be. Who did you sign a multi-year, $X00,000 to $X,000,000 technology and services deal with that you were impressed with?

Right? Did you really think I was gonna send a bunch of LinkedIn Inmails? Not for this gig. I want to hear “they were awesome – they will love this Andrew”. I had a call the other day – and got two leads that do exactly that, and I have a handful of more calls setup.

What do they need to have to make them effective?
But here is the other part of the conversation – I am asking these buyers what the rainmaker needs for them to be able to buy from them. I have worked up an assessment and list of competencies and experiences (featured in the blog after the next one) but I don’t know everything. I have recruited people like this before, but I never HIRED anyone like this before. So I am finding out what I need to add to my assessment.

What’s next? A “description” of the role that someone will actually read and respond too. But it’s not really for them…it’s for me.If I have to lead them, I need a plan and follow it. It’s starts with that initial role design.

Log Your Recruiting Hours – Cause Sourcing is Stopping

The obvious is coming – most people will be on the grid.

That means that the role of recruiting is going to change. Sourcing will be important, but it will continue to commoditze and gain ground in outsourcing, so the value to actual employers will decrease, which will mean that the role of the corporate recruiter will change (because it will be cheaper to outsource sourcing).

That does not mean that corporate recruiters will have to stop sourcing – so relax. It will mean they will have to start “scouting” more – see some of my other posts to understand what scouting is.

Needless to say, there are about 2100 working hours in a year, and the amount of time that your recruiter will have to source is going to decline. If you combine screening technologies and strong job descriptions / authentic brands, you will be able to control the flow of applicants predictably.

Do your leadership a favor – take some time and start logging your hours – do the exercise for two weeks:

Make a spreadsheet, list of piece of paper that has the following columns – sourcing, recruiting, staffing, scouting. At the end of each day, mark a dot for each hour your spend on one of the four categories, using the following parameters:

Sourcing – each hour you spend on the phone / net hunting for some to propose an open job to. If the activity results in actually having a conversation and pitching the job, don’t count it as sourcing, count that as recruiting.

Recruiting – each hour you spend screening or convincing someone to apply to a job or take an interview / screen with a hiring manager. Don’t count any hours where you are doing work post application for that candidate.

Staffing – this is any work that pertains to the job itself being open. Meetings with managers, offer negotiating, scheduling candidates, writing job specs, etc. Anything that you would normally do to satisfy the acquisition process. For our purposes, throw the intake meeting / initial meeting with your hiring manager in here.

Scouting – any work that you do regarding gathering intelligence, general networking, or cruising for future talent. If there is an open job, don’t count it here. If you know of an opening coming up, or always have a need and you don’t have a like job open, count that activity here.

Wait two weeks and see how you did. Then do it again. Have others do the same. Now start asking yourself and your team members and leaders if this is the work you want to focus on, and then ask if you are developing the right skills given the work you do. You might find it surprising.

Happy Friday and have a night weekend.

Effort, Duration, and the great variable we call Sourcing

It’s rare that any job has only 2 or 3 people that can do it. I will admit that given the right conditions, maybe only 2 or 3 people want to do it, good or bad. But ultimately, we work to get a couple of people to choose from for a job. How long it takes us to get those two or three people to choose from varies position to position, and the greatest variable that impacts the time that project is open is sourcing.

Now I said the biggest variable for time, not the most amount of time. Staffing processes can be long or short, but if it takes 40 hours of effort to go from interview to offer for one candidate, it likely does not take 140 hours for another candidate to go through the same steps on the same position. Don’t confuse effort (hours worked) with duration (time elapsed). 40 hours of work in regards to one candidate may be accomplished in 2 weeks, while another candidate takes 4 weeks to complete the same 40 hours.

Which leads us back to sourcing. It may take 40 minutes of effort over a 1 day period to find three candidates that you want to submit to a hiring manager or 40 hours of cold calls, research, etc over 3 weeks to find the same people. It’s up to you as a talent acquisition professional to keep your clients/managers informed of that variability.

Try separating your work estimates into three pieces…sourcing, recruiting, and staffing:

1 How much effort will it take to find people

2 how much effort to convince them to apply/enter the staffing process

3 and how much effort to go through your staffing process

Now do the same for duration estimates:

1 how many days will it take you to complete your sourcing work

2 how many to complete recruiting work

3 how many to complete staffing

Set expectations and happy hunting.

Throw REAL Lifesavers out in this economy…not those that are wintergreen

Jobs report is about to pop again, and I have to tell you, I am not optimistic. We have been adding net 50,000 to 80,000 jobs per month of the past several months, but we have a long way to go to recover the 7 million plus that were lost in the US, not to mention that millions that are in underemployment.

Where are the 250,000 jobs per month in new jobs? That is what we need. About a year of that would be awesome and would put us about halfway on track to “normal”. But that would also mean that 3 to 5 times the jobs that are becoming available will become available…so where are they?

Got that question during panel at NYU Stern in mid October. I told the audience to buckle up because the answer was going to be a bumpy ride. In general, we need to make some radical changes in the US to get those kinds of numbers. Main street and wall street need to do their thing, which means that the credit markets need to shift, but I think we have played down the shift that Americans may need to make. If you have not opened your mind to a different career or different industry, now would be a good time. Your commute may have to get longer, or you may need to work in another city and take it on the chin for a while. But if you have not compromised yet, you should start.

I think jobs are coming in technology, government, infrastructure, healthcare and very small businesses. But it’s tough to tell when.

But those looking have likely done their part. It’s the other side that needs to start bending, and start throwing out lifesavers that can stop people from drowning, not one that are minty and they can chew on (how is that for a visual).

As employers, we need to push our managers to hire more people. We need to be cautious about outsourcing, temporary work, and offshoring so we can get people here in the States fully employed and running again. We need to reinvest in jobs with the profits we have, and maybe change our business models a bit to expand out businesses to accommodate people growth. I know we have. Sure we need customers, but as we get them, we will need more people…and that didn’t used to be the case.

The other thing is we have to get over this discrimination about hiring people that are currently employed. It’s one thing if those people are underemployed, and working for much less than they should, and there are lots of those people. But if you are a manager, take some more time, planning, and own up to the fact that if you are good manager you should be able to develop people – especially those who are looking for development. Hire people that need a job and develop them.

Now I know that there is always a fight for top talent, and we have to find the right and best people. But let’s admit something out loud…most jobs require a certain set of skills and experiences but few require characteristics that only a purple squirrel possess. I am not asking a pharma company to stretch experience or education for the next head of oncology R&D, but let’s be more open in HR, marketing, procurement, sales, IT, customer service, and other jobs where individual contributors that have had success can be put in a position for other successes. Does a shift supervisor need to really work n the industry or demonstrate killer leadership? Does a customer service rep really need experience in your product, or can they demonstrate how they can adapt and learn? Challenge yourself on how many people could actually be trained or developed to be effective in that job with some added attention.

We have an opportunity as managers, each one of us, to make a real difference by hiring and developing people who NEED it – and I mean really need it. Think about that the next time you sit with a manager and ask them what they require, or the next time you sit with your recruiter and are thinking about your team.

If you have a job, take it on yourself in 2011 to put one person back to work, and greatly impact one family. It’s an amazing feeling and it gets addictive.

Why is executive search pricing still a percentage?

Take a look at the history of firms like Korn Ferry or Spencer Stuart. They have been around for a while. They have seen the staffing world through muscle cars, disco balls, atari, the Internet and social networking. Work has changed so much over the years, but you know what hasn’t? How most search firms (not just KF and SS) charge. It is still a percentage.

I am not saying it’s a good or bad thing. But clearly the advent of technology and the increase in skill level of the corporate recruiter certainly makes us think differently about using any agency.

What surprises me most about the entire issue is that the pressures from clients have not changed the model more. There are so many other services that have moved to hourly pricing or flat rates and deliver high value, but search has not really changed. Install SAP and it’s an hourly rate. Can you imagine SAP saying give us 25 percent of your annual revenue?

Maybe tech is not the same as an executive, but I am sure the street cares more about the CEO and officers more than the type of inventory mgmt system.

So again, I wonder why has the percentage remained. Why the value based pricing? Do we really think that finding a candidate making 500k is twice as hard as one making 250k and four times harder than 125k candidate? Well let me tell you…it is not. Over the hundreds of positions I have managed at these levels, both directly and by observation, the higher up it goes the easier it gets. Don’t get me wrong…the work is intense. A great recruiter is going to talk with 40 to 75 well researched people on a hard search. But at the top, it’s actually easier to find the people to start calling on, that is because there are less of them.

I struggled to find another industry like this and then I saw it on tv the other day. Real estate. A percentage no matter what. Do we all really think that it’s twice as hard to sell a 500k house vs a $1M house? I don’t know if its twice as hard – I imagine its a little harder. But inevitably, we pay the fees as a percentage because of a perceived value and the relative nature of money.  There are real estate agents that take a flat rate or many do have minimum pricing that they will have in order to work with them – much like search firms. But also its pretty easy to spot the ones who can handle a $10M house.

As value changes in recruiting, this will continue to be a hot topic, but I do see that at less than 150k on total compensation that there is significant pressure on getting rid of a percentage. Over the last 25 years, the business quickly moved from greater than 25% to less than 25% for such positions, which is a value statement of its own. Because of the easy access in the recruiting industry, the natural economics will probably keep it there. More alternatives and models will arise, but many people will keep their spending habits.

As for me, I am fan of executive retained search. If you are going to spend money – then get a service that is greater than just the profiles, and demand quite a bit from your agency. Give them the ability to shine and present great talent. And if it costs 25 to 33%, then so bit it. If you are being smart with your agency spend, that means you probably engaged less, so the difference gets offset.