orporate leaders are responsible for such things as strategic initiatives,
shareholder value and shaping a company’s culture, yet the choice of who gets to
make these decisions is often brokered by an external agent: the executive
recruiter. In his new book Deciding Who Leads, Joseph McCool examines how
executive recruiters drive, direct and at times disrupt the search for
leadership talent. McCool recently spoke with Workforce Management staff writer
Gina Ruiz.
Workforce Management: You say executive recruiting firms have failed at pushing
diversity into the C-suite because they often poach from the same small, elite
circles. How can employers who are committed to diversity get around this
hurdle?
Joseph McCool: Hiring companies should look at the diversity that exists within
the search firm that they are interested in retaining. Executive search firms
today are not nearly as diverse as their clients. I believe we would see some
positive movement in the diversity challenge if search firms themselves became
more diverse.
WM: Why do you believe recruiters are contributing to inflated executive
compensation and how can companies combat this problem?
McCool:
Recruiters drive executive pay skyward because—unless there is a
flat-fee arrangement in place—they are going to get more commission as the
executive candidate’s compensation balloons. So they have a vested interest in
pushing for higher compensation. Employers would be better served by agreeing on
a fixed fee before any executive search begins.
WM: You mention that corporate leaders should be in the trenches recruiting.
What percentage of their time should they spend recruiting and what would that
do to executive search firms?
McCool: They should spend at least 25 percent of their time on talent management
issues. Succession plans should be living and breathing efforts—updated at least
quarterly. Business would not necessarily dry up for executive search
recruiters. Leaders who are invested in talent management will look to build
pipelines, which would require their external services.
WM: Sometimes the most qualified executive who can fill a vacancy is an internal
candidate. Can an executive recruiting consultant be trusted to deliver this
type of objective recommendation?
McCool: Executive search consultants get compensated regardless of whether their
recommended hire comes from within the company or outside. There is plenty of
room for potential conflict of interest, but not necessarily in this area.
WM: Where can conflict of interest arise?
McCool: The biggest one relates to client blockage—or the hands-off policy. This
is tantamount to an oath in which recruiters promise not to poach executives
from a company that has retained them to fill vacancies. They are bound to these
agreements anywhere from six months to a year after a recruiting assignment is
complete. The biggest recruiting firms have over 5,000 client companies—that
places a lot of restrictions on where they can or cannot search for talent. This
may mean that employers are not necessarily getting the best available talent in
the market.
Workforce Management Online, June 2008 -- Register Now!
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