About two years ago, Melissa Halpert got an unexpected phone call from a well-known executive placement firm.
At the time, Halpert, managing director at New York City-based investment firm Providence Capital, was looking to find a director for one of the companies in the firm’s portfolio. Providence Capital often tackles corporate governance issues by taking a financial stake in troubled companies — and such stakes can mean replacing board members.
The recruitment firm told Halpert they could help with the search. Yet, not once during the phone conversation did the consultant get the name of the company right. “The search would have been a complete wash-out,” says Halpert.
Halpert claims that most of the recruiters Providence hired over the years never took the time to build accurate candidate profiles, assuming, instead, that the qualifications and personality of a director and CEO are similar. “It’s as if the ‘Rolodex spin’ was their search process,” she recalls.
So many engagements went badly, in fact, that managers at the investment fund decided to launch their own directorship search firm as part of Providence Advisors LLC.
While few companies are likely to take such a drastic step, client complaints about executive placement firms abound. Herbert Birman, CFO of business intelligence software maker MIS AG North America, refuses to even deal with search firms anymore.
Why so cranky? In 1998, Birman claims a director at one of the larger recruitment firms “harassed” him after Birman accepted a controller position with food distributor Hartford Provision Co. rather than taking a similar position offered by the recruiter’s client. Birman insists that the headhunter actually stalked him, placing an endless series of late-night calls to his cell phone over a period of several weeks.
To be fair, grousing about consultants has practically become the national pastime of corporate executives. And like any other services sector, you’ll find both good and bad executive placement firms. The fact is, it’s easy to run across good and bad recruiters within the same firm.
Indeed, one Chairman and CFO, Robert Williamson of CityMerch Corp., believes many job searches go awry because corporate clients simply aren’t candid about what they want. And in reality, it’s nearly impossible for a business to uncover qualified candidates for an executive level position without engaging a top search firm.
Typically, larger companies rely on retained search firms — firms that collect an initial down payment and subsequent installments before a position is filled. The largest multinational retained search firms (collectively known as The Big Four) are Heidrick & Struggles International, Korn/Ferry International, Russell Reynolds Associates, and Spencer Stuart Management Consultants.
Smaller companies, on the other hand, tend to sign up with contingency firms. Those recruiters only get paid only when a vacancy is filled.
Either way, employment experts say clients should not go on autopilot once they’ve engaged a search firm. While the majority of executive recruiters are eager to find the right candidate for a position, a few appear more interested in collecting a fee than making a match.