How to make sense of executive search firms in higher ed
Most humans decide whether they like someone within the first few seconds of meeting them. Research shows that humans, within seconds, decide if someone is trustworthy, smart, successful, dominant, and of high status. You can argue that this is not true, but you would be fighting thousands of years of evolutionary adaption designed to improve our survival. All we can do today is to consciously fight back on our intuitions because research shows we are often wrong. In his book, Face Value: The Irresistible Influence of First Impressions (2007), Alexander Todorov states that “the character judgments we make from faces are as inaccurate as they are irresistible; in most situations, we would guess more accurately if we ignored faces.”
Do We Really Need Help?
After leading and being a part of hundreds of searches in the past three decades, I believed I knew how to run a robust search process. I do think I got some things right. I became an expert: at 1) crafting search committees with a diversity of stakeholders, 2) identifying a wide variety of places for job postings, 3) conducting brief, but effective phone interviews, 4) conducting thorough reference checks before bringing candidates to campus, and 5) overseeing a robust campus interview process that collected and distilled feedback from everyone.
When I first became aware of the existence of executive search firms, I admit I was quite skeptical. Why would I pay a company to do what many top business books say is the most important thing a leader does – hire great people? How could an external company understand the institutional culture and department needs so quickly?
My point of view made more sense when candidate supply exceeded demand for hires. I remember one of our most significant dilemmas being how to quickly whittle down 100 applicants to focus on the top candidates. We used graduate degrees, professional involvement, and sweeping generalizations about other institutions to quickly reduce our pool to a manageable status.
What’s the Problem?
Even before the pandemic, executive search was rapidly growing each year at a healthy 10% clip. Reasons for this included: 1) job mobility is increasing (and retention decreasing), 2) the economy is expanding worldwide (the number of “3rd world nations” has dropped from 125 in 1965 to 13 in 2017!), 3) a workforce experiencing the lowest rate in birth rate in over 40 years (which means less potential employees), and 4) the ongoing transition from an industrial to a knowledge economy, defined by the Corporate Finance Institute as:
The knowledge economy is focused on the essential importance of human capital in the 21st-century economy. The rapid expansion of knowledge and the increasing reliance on computerization, big data analytics, and automation are changing the economy to one that is more dependent on intellectual capital and skills
Now, post-pandemic, we add the impact of “The Great Resignation” which as the New York Times aptly stated, “Workers are gaining leverage over employers.” The sentence that most impacted me stated:
“An entire generation of managers that came of age in an era of abundant workers is being forced to learn how to operate amid labor scarcity. That often involves strategies more elaborate than simply paying a signing bonus or a higher hourly wage.”
By now, I hope you are starting the realize the benefits of hiring an executive search firm (sometimes).
So What’s Happening?
According to an April 2022 press release by Hunt Scanlon, a firm that ranks top executive search firms, “Executive search firms have shattered their growth records.” Hunt Scanlon’s vice president of market intelligence states, “This is unlike anything we have seen in 34 years of tracking the recruiting industry. Recruiters are busier than ever, and we see a long runway ahead for growth and expansion.” Hunt Scanlon’s data analysis indicated that “48 of the 50 largest U.S. recruiting firms enjoyed double digit growth in 2021.”
To offer an idea of scope, the number one (based on revenue) search firm, Korn Ferry, brought in ~$1.4 billion last year. This was a 55% increase in revenue! The average revenue brought in by a Korn Ferry search consultant last year (517 consultants in total), was ~$2.7 million! And they are not alone. Three firms in the top 16 for revenue increased their totals by more than 100%. The lowest increase in the top 20 was still 22%.
Why You Need Help
In addition to all the main economic factors leading to an increase in executive search, the primary reason I have become convinced that executive search is valuable is that most employers are not prepared to, nor do they know how to, recruit top hires. Posting a job ad today often results in a failed search, or even worse, a poor hire. And the impact of bad hires should be evident but Adam Grant, in his book Give and Take, describes how making just one bad hire can destroy the culture of many giving and good employees.
Ask yourself, the next time you need to hire someone, how many hours are you willing to spend recruiting top candidates to your pool? If the answer is less than 20 hours, I suggest you consider hiring an executive search firm. Not only will they find you top candidates, but they will help the candidates understand the strengths of your organization, and they will do all that they can to ensure candidates are who they say they are. In fact, many search firms guarantee success such that if your new hire leaves in less than a year, they will redo the search for no additional cost.
What Will It Cost?
What does it cost? There are some major philosophical differences on how organizations are charged for search. I can say that, my limited knowledge of over 15 higher education firms suggests that the average firm charges about 1/3 of the new hire’s first year salary. So if you are hiring a department director for $100,000, it would cost you $33,000 for their services.
Don’t react too suddenly though. The cost of not having that position filled for very long has some major consequences on your remaining staff, your students, and your department’s expected outcomes. I like to tell folks that if a position sits unfilled for four months, the unused salary savings is equal to, if not more, than it would take to hire a search firm. I did not know how to access unused salary savings for many years until I realized universities recoup millions in unfilled positions every year. A thoughtful argument, showing the return-on-investment of a search firm, can often be more impactful than you realize.
So Who’s the “Best”?
Hunt Scanlon publishes an annual list of the top 50 higher education search firms. As a good researcher knows, the rationale behind the rankings is extremely important. Hunt Scanlon says that their list is based on “the most prominent firms.” I don’t know what “most prominent” means nor was there any documentation as to how this definition was operationalized. I can, however, tell you that many of the firms listed as Hunt Scanlon’s top higher education executive firms listed zero higher education positions as of April 2022. One reason for this, I would guess, is that of the 50 higher education search firms I researched, about 25% of them do not list any of their open positions.
I also stumbled upon a list of almost 80 higher education search firms published by Higher Ed Jobs. I found this list more relevant and aware of many of the smaller firms than the Hunt Scanlon list. However, this list also included companies seemingly not focused on higher education and not listing job openings in higher education (including a link for one company that was out of business.)
You can find other listings of higher education search firms, but these two lists were the two most comprehensive and reputable. Unfortunately, neither of the lists provide much data, if any, other than a weblink, a practice leader’s name (and number), or a one-sentence description.
What I wanted to know was which higher education search firms list the most open positions. I was able to calculate this data by relying solely on these search firms’ websites. Before viewing the results, please know that my research is by no means comprehensive and is based on a 3-day window of time in April, 2022.
My results are listed in the accompanying document (below). I am not able to say that just because a search firm has more open positions means that it does its work better than any other firm. I think you would want to do some of your own reference checks to have a better idea of quality (from your perspective).
Personally, I would like to see search firms list the average amount of time it takes to fill their openings and the average length of time new hires stay with that organization. Some firms mention data on their speed of hiring but in order to trust these firms’ stated days to hire, one must first have an agreed-upon standard on when the search clock starts ticking.
What I would love to see, and I haven’t seen any firms publish, is the length of time new hires stay in their roles. I can’t imagine that in our data collection age, someone is not calculating this. I realize that having some hires leave sooner complicates this measure, but an early departure is also indicative of the search firm not doing their due diligence.
In spite of an executive search industry still refining their profession, my goal is to provide a reasonable argument for giving executive search in higher education serious consideration. My three decades of experience in higher education, along with some part-time executive search work I have done for one company, I can state with confidence that the large majority of organizations these search firms are serving are hiring candidates on a level many times higher than what they were getting by posting job announcements. The investment may not always be the best one for each opening, but the concept has more credibility than ever before. I suggest you realize that many of your peers are gaining a competitive advantage through their wise use of executive search.
Jeff Doyle currently works as a Consulting Advisor for Higher Talent Executive Search in addition to serving on several doctoral dissertation committees. From 2010 to 2022, he worked at Baylor University, spending nine years as the Dean for Student Learning & Engagement and 2.5 years in Institutional Effectiveness. Doyle has also undergraduate and graduate courses on organizational behavior, leadership, and higher education management. His blog is Deep Thoughts on Higher Ed.
More from UB