Posted , in Business model
Rethinking executive search
We all feel the need to reinvent ourselves from time to time; anyone who went through a smoking jacket and whiskey phase at university can tell you that much. And professional services firms are no different. Adaptability is a prerequisite for success in this fast-changing market. History tells us that firms that are unafraid to make changes to the way they operate in order to keep pace with changing client needs—even when that means entirely reinventing their business models—have a significant advantage over their more conservative competitors.
And at this very moment, we may be witnessing just such a reinvention take place across not a single firm, but an entire swathe of the industry. We’re talking specifically here about organisations that could be categorised, broadly speaking, as ‘executive search firms’—everyone from big players like Korn Ferry all the way down to smaller, independent outfits. Fundamentally, the traditional value proposition of these service providers is simply ill-suited to the needs of today’s customers. Recognising this, many executive search firms have started down a path towards rethinking, almost from the ground up, the sort of businesses they want to be and the sort of relationships they want to have with their clients.
The traditional executive search model was developed for the needs of a pre-digital age. But LinkedIn—and its smaller regional competitors, such as Germany’s Xing—have rewritten the rules of recruitment. Not only have these platforms made it easier than ever for clients to find candidates themselves, they’ve also forced those clients to re-evaluate the value-add of the executive search firms they work with. It might be unfair—a good executive search firm can bring a lot to the table aside from just finding candidates—but there’s a perception among many clients that working with a head-hunter means paying someone to send LinkedIn messages all day. And why pay money for something that you think (wrongly or rightly) you can easily do in-house?
So executive search firms were already in the process of reinventing their value propositions when the pandemic hit, but COVID-19 has only served to magnify the importance of that process. Putting a hiring freeze in place was one of the first things that many businesses did once they fully understood the scale of the crisis; and very few people in secure, well-paying jobs are in much of a hurry to move into new roles right now. While things have certainly improved since the worst days of the crisis, it will be a while before the talent market returns to anything like normality. Consequently, it is now even more important that executive search firms seriously consider this question of reinvention.
But what, exactly, will those reinventions look like? For one thing, we will see more firms start to subsume their executive search activities into a more holistic package of people advisory services. Already, some firms are rejecting the label of ‘executive search firm’ entirely, as they seek out new terminology that can help them make clear to clients that executive search is just one of many strings to their bow. Firms have realised that a diversified service portfolio—not just acting as recruiters, but advising clients on talent strategy, providing leadership training, and supporting their cultural change journeys—will put them in much better stead moving forwards.
As well as branching out into alternative service lines, it’s also likely that some firms will put serious effort into developing entirely new services that take advantage of their core capabilities in novel ways. For example, some firms in this space have recently launched so-called “managed project delivery” services, in which they provide clients not with candidates for individual full-time roles, but with entire project teams made up of freelance professionals, on the understanding that those individuals are going into the organisation on a shorter term basis to address a time-limited business need. Odgers Berndston even went so far as to launch an entire sub-brand—Odgers Connect—built around this model.
Inevitably, there will be more of that sort of experimentation as these firms attempt to redefine themselves for a post-COVID era. One thing is clear though: Even if the traditional model of executive search is under enormous pressure right now, executive search firms themselves have room to manoeuvre when it comes to carving out a new space and a new identity for themselves.