Paul Cottey, CIO of Water Street Healthcare Partners, on when and why to enlist the help of executive recruiters.
Allow me to start with the disclaimer that I had the idea for this topic long before I talked to Heller Search about publishing it here and in The Heller Report. This article is based on my experience as a CIO who has interviewed and hired many people over the years, with and without outside assistance. It is not my intention to market the services of Heller Search.
You have over a thousand connections on LinkedIn. You network like a Cisco router. At conferences, when everyone else runs back to check their email during the breaks, you stick around the coffee urn to meet new people. If you had a free drink for every business card you have collected, you'd be able to buy the world a Coke. But you've been looking for an IT Director for months, and you keep striking out.
You've had a handful of possibilities, but no one seems to be the right fit across skills, culture, compensation, location, and timing. You are not getting the projects done that you hoped your new IT Director would lead, and your VP of HR turns the other way in the hallway when she sees you coming.
Know When to Call an Expert
This does not make you a bad CIO. It makes you a typical executive in a tight market for IT talent who needs to acknowledge that, in many instances, there are people better-suited to finding you the right candidates. You need to call in an expert—a headhunter, also known as an executive recruiting firm.
When I am hiring a new role, or backfilling an open position on my team, I always try to go and find the right person myself or working with my HR partner because, if I can, I want to save the cost of the recruiter. The key is to know when to throw in the towel and call in a professional.
Here are my rules of thumb around when to engage an executive search partner:
1. You are looking for a very specific or rare set of skills.
For example, if you absolutely need “an ex-Big 4 consultant with a healthcare background, who has been backed by a venture capital firm before, who already lives in Chicago, and preferably speaks German,” you might consider using a search firm.
2. The job is in an out-of-the-way location.
Atlanta, Georgia? Give it a try yourself for a couple weeks. But Atlanta, Illinois? You might consider using a firm with a national database right away. (You will probably also need to review your company’s relocation package!)
3. You need to do a confidential search.
There are times when you need to start searching before you are able to "go public" with the job opening. It may be because the incumbent has not yet been notified, or because news of a new leader coming in from the outside may disrupt a team or a project. It is hard to hide your company’s identity when doing the search yourself, but an experienced executive recruiting partner knows how to conduct a “confidential search.”
4. You need to fill the role quickly.
Executive recruiting for a critical role is not something that can be rushed, but executive search firms get paid to have an efficient process and to follow it. Their process will certainly be faster than your own. You can help collapse the timeline by being available to interview candidates, and sending timely feedback on candidates to your search partner.
5. You and your HR partner have been searching for awhile but keep striking out.
If it seems like you should have been able to generate a solid list of candidates on your own by now, but you haven't, it is worth it to change the game and bring in a professional recruiter. They have large networks of professionals they can call as candidates, or for referrals to others. They are also very skilled at detecting things about your position description, or the reporting structure, that may be costing you candidates.
Justifying the Recruiter’s Fee
Hiring a recruiting firm may seem expensive, especially compared to conducting a search with company resources. If you figure you are going to pay three or four months of the person's salary as a fee to the firm, it can be difficult to get your head around the cost. Here is how I do it:
1. Build a positive budget variance.
If the position is currently vacant, and that salary is not being paid, then the two to three months it is going to take you to find the person and get him or her onboard creates a positive variance against your budget. Don't let Finance claw back that money as unspent; redirect it to recruiting costs.
2. Consider the opportunity costs of uncompleted work
If you don't have the right talent in place, your IT organization cannot complete all of the work the company is counting on. What is the downside of a delayed customer mobile app, or the launch of a new cybersecurity plan? Judiciously describe what is going to be delayed or left undone and add these to the business case for hiring an outside executive search firm.
3. Consider the cost of people’s time
You value your own time, and that of your team and your colleagues in HR. Remember that it takes time to organize a quality search, update a job description, screen candidates, schedule face to face interviews and organize candidate travel. A good executive recruiting firm is very efficient with these steps, and then you and your team can focus on interviews with the finalists, and reaching a decision.
4. You can’t afford a bad hire
You need the best person that is available for this role. Consider the value of hiring the best person there is rather than the best person you happen to know. You may be hiring your future successor if you bring in a strong-enough person, and I've written on why that is a good thing.
Do you need to worry about hurting your HR team's personal or professional feelings? Yes, you do. If recruiting is usually the HR team's job, then you need to sit down privately and talk through why you believe a different approach should at least be tried.
Let your HR team know that this is not a reflection on them, or if it is, they need to feel they have had a fair chance to meet your needs. If your HR team has a process to follow for the final hiring decision, you still should respect and follow that process even when working with an outside recruiting partner.
The next time you are looking for a senior-level hire, give it a try yourself if you already have some ideas on candidates. You could get lucky and find the right person right away. Otherwise, you should consider bringing in the experts.