Lately I’ve been running into a lot of roles that have been under retainers with search firms whose recognizable names draw surprise when you hear a C level role remains open and unfilled for six months or more. Now why is this, you wonder. How can any firm that charges premium fees and staggering retainers, with deep resources and national connections not fulfill a straightforward C level role in a small to mid cap market in Southern California?
Maybe because bigger isn’t always better. And a big name isn’t always a winner. Ultimately a recruiter, any recruiter from large firm or small, retained or contingency has to respect the fiduciary responsibility to the client. When a top tier firm appears to treat a search with disrespect or disregard it’s an affront to both the client and the profession. After all, they’re being paid premium fees to complete big, often difficult searches for their clients. It’s the very reason WHY a company retains what they believe to be the best, top tier headhunting firms in the country and/or the world. And how is it a company, their client, accepts this lack of results?
Too often a company pays a large retainer, follow-on retainers and often a recurring monthly fee which is in addition to their fixed percentage search fee. Six, eight, ten months later the company is hundreds of thousands of dollars invested in a process and often no hire or prospective hire in sight.
With an arrangement like this, the leverage is unbalanced. The company continues to invests without results and the search firm gets paid regardless of its performance. The client company feels too invested to get out and the retained search firm does not experience any consequences.
For a recruiter, a big retained fee is often a testimony to their abilities. I love ‘em too, but I’m not okay with search firms who don’t deliver. It makes my job that much harder. We work so hard to engender so much trust; why would any company throw away all that goodwill and future business by not doing its job?
So, what happens with these perpetually opened positions? How does a client company justify the ongoing expense to its investors and the board? Is the search firm open to renegotiating the contract and transferring a portion of the fees to a different search? And if the company fills the position through another source, are they still liable for additional fees implied in the contract?
An agreement between a search firm and client company should define milestones for payment. Accountability is critical to maintaining a trusting client/recruiter relationship. Trust. Ethics. Results. Principles to live by.