Reasons to switch from contingent recruitment to executive search

Contingent recruitment can be fun and lucrative – especially in a buoyant market.  You might be running your own desk, closing deals and taking home a nice pay packet.  What’s not to like?

At Radiant, we speak with lots of candidates who’ve had a great run in contingent recruitment but are now wondering what’s next. They’re looking around the room and are unsure about who they can learn from or what their career progression looks like. They’ve capped out in terms of comp. They’re tired of the transactional nature of their work and want to build longer-term relationships with clients where they can act as trusted advisors. In some cases, recruiters are simply fed up with the hours; evening calls can take their toll on social and family lives.

In these cases, it’s time to consider making the switch to executive search.

Contingent recruitment vs executive search

Executive search is about finding the best possible talent for any given role. In many cases, the most qualified people for a role might not be looking to change jobs. As such, it differs from contingent recruitment which is about matching an open role with people who are actively looking for employment. Typically, search professionals place people into C-suite or very senior roles. Contingent recruiters present a pool of candidates that fit certain criteria. They generally work the front-end of the process, leaving the assessment, referencing and selection to the client.

Fee structure

Executive search professionals work on a retained basis; they receive an upfront fee which enables them to take a research-led approach to finding the most suitable candidates for any role. However, the retainer has several additional benefits.

This is a career that works well with family obligations. Most firms are aware of the importance of a good work/life balance and it’s a priority that is emphasised from the top. Even in the most demanding search environments consultants remain in control of their calendars and the hours are far more family-friendly than many other professions. Indeed, for those who’ve left industry or professional services to become a search consultant one of the common drivers is the desire to better balance work life and home life, have greater flexibility and less travel.

Commitment to hire

First, it signals to the candidate that the client is serious about making this hire. In contingent recruitment, you can do lots of work and get quite far through a process, only for a client to decide that now isn’t the right time after all to make a hire. That is far less likely to happen in a search context as the client has already made a financial investment and therefore shown that they are committed; but also, if the client does decide that they don’t want to proceed you will still have received the initial retainer fee for your work to date.

Aligned incentives

Being paid a retainer also means that you can afford to take on fewer roles and are therefore able to be more focused on the mandates you do work on.  In contingent recruitment it is not uncommon for a consultant to be working up to 20 roles at any time, knowing that they may only fill 2 or 3 of these. In recruitment, if a role you’re working on isn’t getting traction there isn’t much incentive to focus your energies on it.  In search, you will be working on far fewer roles – depending on level and sector, between 10 and 25 a year. But search professionals have a far higher completion rate - normally upwards of 85% for the top firms.  The fee structure in search means that you get paid for your work and you’re incentivised to complete the mandate by finding the right person for the role. Being paid on a retained basis also means you have more predictable revenue than in contingent recruitment where your income can fluctuate wildly.

Client focus

Another benefit of the retained search business model is that it encourages the headhunter to remain client-centric. The executive search process involves working closely with clients at the highest level of an organisation to understand their needs and requirements, mapping the market for talent, identifying the perfect candidates, and then explaining to these candidates why such a role is an enticing prospect. Being paid a retainer means that you can stay focused on meeting your clients’ needs rather than trying to get someone – anyone! – on-board so that you can get paid.  As a search consultant you can actually be in a position to say to your client that, after further research, someone you’ve introduced isn’t going to be the best fit for the role.  

‍Seniority of mandates‍

In part because ‘easier’ roles can be filled by contingent recruiters, the most challenging, niche and senior hires tend to go to executive search firms. As a search consultant, this means that you’re usually working on the most senior hires – and as a result, your average fee size will be much higher. For the most senior hires in financial services or technology, for example, fee sizes can regularly be north of $400,000 and sometimes into the millions. Also, because of the seniority of the candidates you’re placing who typically have much more control over their diaries, you won’t be doing evening calls; work at this level is almost always conducted during business hours. And because the roles you’re recruiting for, such as CFO, are essential or even a legal requirement for listed businesses, your work is less susceptible to economic slowdowns or recessions that can decimate a contingent recruiter’s prospects.

Earning potential

Contingent recruiters will always cap out in terms of fees because, as mentioned above, the most senior work will go to search firms. Consequently, you can generally have far greater earning potential in the longer-term as a search consultant than as a contingent recruiter, with a few exceptions. In some of the top search boutiques, it is not unheard of for someone with two years’ experience to be taking home c. £100k in the UK or $200k + in the US. Top fee earners in search will be generating many millions of dollars per year and can be taking home as much as 40-50% of that. There aren’t many industries which don’t require a professional qualification where the earning potential is so good.

Skills

Executive search requires a range of skills, but the best head-hunters have excellent people skills, are great communicators, have strong commercial acumen, deep sectoral knowledge, the ability to work on numerous projects at the same time, are intellectually curious, resilient and credible with senior industry figures. Even though search is a less sales-oriented environment, the skills you’ve developed in recruitment are highly transferrable; you will already have the sector expertise and to be successful in recruitment you need excellent people skills. Moreover, people who’ve done well in recruitment tend to be self-starters, entrepreneurial and dynamic. This kind of ‘hustle’ is readily transferrable to many other industries. And of course, working with an array of exciting clients can sometimes lead to search professionals getting the chance to join the firms they are partnering with, opening up a range of other professional opportunities.

Relationships, not transactions

Increasingly, search firms are widening their offering: succession planning, assessment, and leadership advisory are all services which most top firms now provide. This gives them multiple touchpoints with clients and the chance to have more wide-ranging conversations. Projects might include, for example, talent pipelining, diversity initiatives, board effectiveness, assessing reward and compensation structures, or advising on location strategy.  

So, the reasons to make the switch are as follows:

1. To work on the most senior and most interesting mandates.
2. To have greater earning potential.
3. To have greater opportunities for learning and development - especially if you want to do more work in advisory and assessment.
4. To have the chance to work abroad. The global search firms and many of the leading boutiques have offices around the world and tend to be good at offering their employees the opportunity to work outside the UK. If you want to spend a couple of years in New York, Singapore or Dubai, these firms will usually help you to do that.
5. To build longer-term relationships with clients, acting as a trusted advisor on all strategic matters relating to talent, rather than simply being a transactor of placements.‍
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To have greater impact in your day-to-day work. By working at the most senior level, placing people onto Boards and into C-level roles you can have a tangible impact on the future of that company; if you’re passionate about sustainability, the future of work, social impact or diversity and inclusion, you can directly help to shape these agendas as a search professional. By placing people into executive roles, you can have a direct impact on boardrooms of the future.

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