Executive search – the industry concerned with sourcing candidates for senior or executive positions – has been able to continue its modus operandi largely unchecked since its inception in the 1950s, despite changes in the surrounding world. The industry has capitalised on simple but fragmented information and made good business out of it. In the early days it was cumbersome to keep track of executives; information was not available in electronic form and seldom centralised.
Tried and tested
It was easy for the search industry to claim a position as a strategic gatekeeper; by collecting information and wrapping it in an informative package, executive search companies were able to capitalise on relevant, yet simple and superficial, knowledge. Like any industry with a good business model, the search industry could lean back and argue: "If it ain't broke, don't fix it."
This convenient business model has, however, rapidly come to an end due to the internet's impact on public information. Recruiters scan executives on the market by collecting public data such as trends, industries, companies and positions. They then add ‘silent data' – performance indicators confirmed by referrals and references. Recruiters analyse both public and silent data in relation to their clients' needs and make a judgement on which of the candidates are suitable.
In essence, the executive search goes like this:
The big rethink
Social media has achieved in less than five years what clients could not achieve in 50 years. Social media – such as Facebook, LinkedIn, Xing, Tencent, Renren, Twitter and others – has rendered generic information a given starting point rather than an outcome. Public data collection does not generate added value from the client's perspective like before; in the future, the real added- value will come more and more from silent data collection.
The executive search industry was trapped in its old business model for too long; recruiters will have to create better analyses to defend their position on the market. Those firms that are unable to move up the value chain will simply disappear. It is essential to understand the power of social media and, more importantly, how to use it for your own benefit. If you can't fight against it, fight with it.
Social media is a dynamic tool for promoting yourself but not everything is disclosed. The user owns his or her profile and can therefore decide what information is available and what isn't; what you see is not necessarily what you get. The talent pool is substantially diluted due to the fact that normal distribution is present in social media; not all members can be high performers, even if their profiles strongly indicate so. The recruiter's main task, therefore, is to attain silent data in order to filter and verify the data provided in the 'open' platforms.
The future of executive search
In the future brand value will become even more important, as only a few players will earn the trust of the market. The exponential growth of information flow due to the internet is likely to commoditise and polarise the market at the same time. The strong companies – if they are aware of new trends – will become even stronger. They will be perceived as trusted advisors and partners, and will be rewarded with silent data.
Trust is crucial in gaining valuable silent information. But even more important than the brand is the community management of different stakeholders, especially the relationship to the candidates. Community management will reflect on the brand, and those search firms that are able to serve their most valuable community members – the candidates – will be rewarded with a strong brand. Sustainable business is, after all, a matter of giving and receiving. Community management will be crucial in sustaining your position as a trusted advisor and enhancing your brand.
As a consequence, executive search firms must be substantially more creative than before in creating added-value services. Here is one way of broadening interaction with the candidate talent pool:
In summary, the executive search industry is becoming commoditised because of the intrusion of technology. Only those firms and recruiters who truly understand the world of open platforms and the importance of giving in order to receive will continue to do well. The ‘trusted advisor' role is hard to earn, and easily lost. Odgers Berndtson is working hard to receive and sustain this fragile trust. In the end, the candidates – and indirectly, the clients on the market – determine which recruiters survive.
Is deploying mindfulness in the workplace really beneficial or is it, as some argue, fraught with...
In the second part of our series, Keiron Pim explores how to look after yourself when the pressur...