Answers to
Questions about Executive Search
(that you always
wanted to ask)
Do search firms recruit from
their clients?
"No client wants to give placement fees to a search
firm and then their senior employees are later lured away by the
same firm for jobs at competitors. Therefore, almost all search
firms provide guarantees against recruiting candidates from
clients for a specific time.
The list of current and recent clients is known as the
"off-limits" list -- the companies they cannot recruit from. As firms
grow, the smaller becomes the pool of candidates they can draw
from. Large firms with numerous search consultants can easily be
working with half the companies in an industry. Often the
most successful companies with the best people are off-limits!
The paradox is that the larger search firms become and the more candidates they
need, the smaller becomes their candidate pool."
What if 2 recruiters want
the same candidate?
"This is another common problem in large search firms. Since
their candidate pool is smaller to begin with, there can be
disputes between search consultants over the few high value candidates that
remain. Most search firms, however, do not allow parallel
processing since the result will be that clients are put at a
disadvantage. The result is further reduction in the size of the
candidate pool at large search firms."
Is this why executive
search firms tend to be small?
"Unlike
other industries where there are advantages in becoming bigger,
recruiting is the opposite. It is a highly fragmented industry and is
steadily becoming more so. The biggest reason behind this trend
is the problem of the steady and severe shrinking of the
candidate pool as firms grow.
Other factors are that recruiting has few barriers to entry
and it is a people-centric business. In other words, clients
hire people, rather than firms. Search consultants who depart to
establish their own businesses find their clients follow them.
For these and other reasons, executive search will continue to
be an industry
where small is the norm."
But there are some big
large search firms?
"Yes, there are a group of highly regarded global firms called
the "Big 5." These are: Korn/Ferry, Heidrick & Struggles,
Spencer Stuart, Russell Reynolds and Egon Zehnder. They focus
almost exclusively on the highest profile positions of large
companies predominately in the largest cities of developed
countries. Despite being high quality search providers, they control a small and slowly
declining percentage of the global market."
Are the "Big 5" present in
emerging countries?
"As of this time, the big firms have presence only in a few
emerging countries. In Southeast Asia for instance, they are in
Singapore and Hong Kong but non-existent in most of the rest of the
region."
What about others outside
the "Big 5"?
"Most other search firms are boutiques and mid-sized
companies that are managed by an individual owner or a small
group of experienced partners. Many of these owner-operated
firms have grouped themselves together with firms in other
countries in loosely allied networks to support each other and
give the appearance of being global.
These office network systems have become popular and new ones
appear regularly. The more established of them include Boyden,
Horton, Amrop, Ray & Berndtson, Transearch, Signium, Penrhyn,
Stanton Chase, AIMS, among many others. Network systems are not
usually counted as individual firms in the same league as the "Big 5" since each office operates as a stand-alone business
with varying procedures and standards."
Are my employees going to
know about my search?
"Many search engagements are to replace employees currently
in place and therefore need to be handled in a very confidential
manner. A more common situation is when a senior position is
open and internal candidates would like to be promoted into the
role. Executive managers, however, have decided they need to
consider a broader range of candidates so they can be confident
of promoting the best person. In either situation,
confidentiality is critical to avoid causing a severe
disturbance in the workplace.
Search firms need to be clear about how they will be discrete.
Communications should be with suitable hiring managers only and
the client names should not be revealed to candidates until they
are selected for person interviews."
Are my customers and
competitors going to find out about my search?
"It is reasonable to say that most companies do not want the
status of their senior positions to be public knowledge. Vacant
executive positions can be cause for concern among customers and
glee for competitors. As above, client names need to be
concealed to all contacts, sources and candidates until clients
instruct otherwise. Confidentiality can usually only be assured
if a senior search consultant oversees the search with a small
number of support staff."
Will details of my search
be used for sales purposes?
"This is another sore point for many clients who do not want
confidential information about their past open positions to be
used to get search business from competitors and customers.
Unless specifically granted permission, search firms should
never use client names for sales purposes."
Do brand names matter in
executive search?
"Clients are the ones who decide this and most clients hire
the best person to conduct their search, not the best brand.
Like other professions -- medicine, law, engineering -- executive
search is a people centric business."
Who will actually do my
search?
"This is another important question. Search consultants at
boutique firms take a hands-on approach to their search
engagements and most of the sourcing, interviewing and
assessment work is that of the person who was contracted with.
Large firms, on the other hand, operate like other management
consulting organizations. Consultants act as relationship
managers while execution is done by less senior associates.
Interactions with many firms are through charismatic rainmakers
who are experts at acquiring new business. Charming and
connected, such people commonly have 15 to 20 search assignments
on the go and must constantly be focusing on selling new
business.
This approach may still yield good results but clients generally
want to know who they have hired to do their work. Clients need
to ask how many assignments the search consultant has underway
and who else will be involved in the search and what will they
do. They also should know who to call for regular updates."
Won't LinkedIn kill the
recruiting business?
"The same prediction was made about recruiters when internet job
boards became widely used (like Monster.com and Careerbuilder).
A decade or so later the recruiting industry has tripled in size and
it is the job boards that seem to be in trouble.
LinkedIn is the newest. It is a
popular social media service used widely by
professionals to find employers. It is
difficult to predict the future but recruiting seems to be an
innovative profession and able to adapt as new tools become
available. It seems it will be around a while longer."
Do search firms use deception to
find candidates?
"Tactics such as pretending to be conducting a study or
writing an article to discover employee names,
titles and responsibilities is highly unethical. Deceptive ploys
are a show of desperation and inexperience, and most firms using
such methods seem disappear on a regular basis."
What if we already have
candidates we are considering?
"It is not uncommon for hiring managers to refer internal or
external candidates. Search firms are used to expand the number
of candidates to gain a more complete view of options and make
the best decision."
Should I only work with
firms with local offices?
"There are usually great advantages to choosing search firms
with deep local knowledge of the market. This is true in
so-called developed countries and much more so in emerging
countries where information networks are more personal and
less transparent.
An exception is when engagements require a region-wide search to
be done. For example, in Southeast Asia it is common these days
for senior candidates to be sourced from across the ASEAN member
countries. In this case, the best recruiter to choose is the one
who can bring the best candidates rather than one that is
located down the street.
Another exception is in markets that are too small or new to
have qualified local providers. Examples are tier 2 (and 3)
cities in developed countries or major cities in newly emerging
countries. Myanmar is an example of a high-growth country in
Southeast Asia with strong demand for senior searches but local
firms are not yet able to offer acceptable service levels."
Who uses executive search
in Asia?
"Most clients of executive search are international
companies in the Asia Pacific region. Locally-owned companies
within emerging countries are often family-run enterprises and
usually hire people well known to them or promote members of their own
families. In recent years, we are seeing big changes as these
organizations expand regionally and globally, and need to hire
world-class talent to run major business groups."
Is retained executive
search understood in emerging countries in Asia?
"No, there are very few of what would be called retained
executive search firms as the concept is understood in major
commercial centers. Confusingly, most general personnel staffing
agencies refer to themselves as "executive search." Many of
these firms are ideal for hiring non-management personnel since
this is their field of focus. However, they have little
knowledge of senior management requirements of multinational
corporations."
Is corruption a problem in
emerging markets?
"In the developed world, providing prospective clients with
free meals and sports tickets is not considered corruption
because the practice is transparent. In emerging countries,
incentives are also provided to acquire business but to a more
extreme degree and non-transparently. Buyers don't just get free trinkets, they get
hard cash, overseas trips and even free cars.
Recruitment is one obvious area where there are extra income
opportunities available for unscrupulous people. Many recruiters share fees with whoever will help them
acquire new
business. The results for client organizations will be poorer access
to qualified candidates (since only those who play the game will
be considered) and higher recruiting fees. Company morale is
also be impacted since only a small number receive a share of
the blessings and you can bet everyone except the foreign boss
knows what is going on.
Providing luxurious incentives is expensive and many recruitment
firms can't keep up. This is one reason a small number of
recruitment firms tend to dominate the market in most emerging
countries."
Is the market for
management talent a national or regional one in emerging
countries?
"It all depends. In countries like Indonesia, Thailand
and Vietnam, executives are resistant to relocating for various
language and cultural reasons. Senior managers from
Malaysia and Philippines, on the other hand, are very interested
in postings outside their home country. Singaporeans are also
interested to relocate but are perceived to be choosy about
where.
Is it easy to attract top
talent to international companies or should a foreign investor
consider bringing in expatriates?
"Importing expatriates can be necessary if your business is
a new concept in an emerging country since local management
talent may not yet exist in ample supply. An expatriate may be
the only option if a company is to ensure that a new branch
office meets international standards.
That said, expatriates are not considered a good option in the
longer term. Expatriate managers require a lot of time to adapt
to a new culture and lack the personal relationships that are
important to doing business in Asia. As well, traditional
expatriates are rather expensive to be supported by smaller
business revenues in emerging markets.
In the long run, most companies localize their senior management
positions. Asian cultures consider personal relationships to be
very important and deep knowledge of a local business culture
can only be acquired by those who have grown their careers
within it. Locals or localized expatriates are the best option
for most companies in the long-term."
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Executive Search
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Chalre
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region with specific focus on Philippines, Singapore, Malaysia, Indonesia, Vietnam, Cambodia, Laos. We are
proactive and well known in our sectors of focus. Regional
Managers use us to help bridge the gap between local environments and
the world-class requirements of multinational corporations.
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Asia
CEO Forum
Asia
CEO Forum presented by PLDT ALPHA Enterprise is the largest
regular business event in Philippines and considered one of the most
important in the Southeast Asia region. The forum serves as a hub
for the spreading of ideas that help executive managers overseeing
enterprises across the Asia Pacific region.
Attendees are both expatriate and Asian management personnel
overseeing multinational and regional organizations. Held in
Philippines, presenters are leaders in their industries and engaged
in momentous pursuits of significance to the entire region.
Asia
CEO Forum is operated as a CSR (Corporate Social Responsibility)
activity of Chalre Associates, one of Southeast Asia's most
prominent senior management executive search firms, to promote
Philippines as a premier business destination in the Asia region.
Click
Here to go to Asia
CEO Forum now!
Asia
CEO Awards
Asia
CEO Awards presented by Aseana City represents the grandest
alliance of local and international business people ever created to
promote Philippines on the world stage. As one of the largest events
of its kind in the Asia Pacific region, it is considered a
must-attend occasion for business leaders active in Southeast Asia.
The star-studded Board of Judges of Asia CEO Awards give away
10 awards to many of the most accomplished leadership teams and
individuals currently operating in Philippines and the region. The
awards recognize extraordinary leaders who have demonstrated
outstanding achievement for their organizations and contributions to
others.
As one of the fastest growing nations on the planet, the world's
business leaders have their eyes on Philippines like never before.
The annual gala was established as a natural outgrowth of Asia
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community in Philippines.
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SPECIAL DOWNLOADS:
Media organizations
throughout the world call upon the Principals of Chalre Associates for thought leadership.
Below are some examples of published material written by our
consultants or international journalists who refer to them. For a complete list of published work,
Click Here.
Getting Ready For The
Deluge: Outsourcing in Philippines
by
Chalre Associates senior staff
Download
[PDF
file, 62KB]
The
Economist Intelligence Unit of the Economist magazine
asked Chalre Associates' Chairman, Richard Mills,
to write a chapter about the Philippine outsourcing sector
in its annual Business Guide Book. The material
provides a Executive Briefing on the progress and major
issues facing this industry that is certainly one of most
significant growth stories in the world.
more
Asia Pacific Mining
Conference 2007 - Report
by
Chalre Associates senior staff
Download
[PDF
file, 28KB]
The 7th Asia Pacific Mining Conference put on by the Asean
Federation of Mining Associations was perhaps the largest
such event in the region. Richard Mills, Chairman of Chalre Associates
gave this report on what was said by the prominent mining
people who presented.
more
The
State of BPO in Philippines: Dan Reyes Speaks
by
Chalre Associates senior staff
Download
[PDF
file, 31KB]
Richard
Mills, Chairman of Chalre Associates,
interviewed Dan Reyes of Sitel for ComputerWorld (US) recently to get
his views on the state of the BPO industry in Philippines. Dan
presented US readers with compelling information to support his view
that Philippines is currently seen as the "Number 1" option by global
companies sending BPO work to offshore destinations.
Dan Reyes is easily one of most experienced Business Process
Outsourcing (BPO) managers in the Asia Pacific region and the world. He
is head of the extremely successful Philippine operations of Sitel, the
world's largest call center organization. Among other things, he is a
founder and former president of the Business Processing Association of
the Philippines. more
