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Ins & Outs of Internal Executive Search

Ins & Outs of Internal Executive Search | Human Resource Executive Online Here are some tips for setting up an in-house executive-search function -- as well as some of the challenges and disadvantages of such an organization.

Tuesday, June 2, 2009
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Establishing an internal executive-search function has been a dream for many companies and a reality only for some.

Some companies consider their internal recruiting process the equivalent of external search services, but few actually meet the criteria:

* Experienced professionals focused entirely on executive search activities;

* Original research to identify and recruit candidates not likely to approach the company directly;

* In-person interviews with candidates;

* Full participation in negotiating offers.

Most companies are excluded from establishing an internal executive search function because they don't go outside at senior levels often enough to warrant it. But more of those who do are considering "going inside." Regional banks were early examples. Now many kinds of companies are doing, or considering, direct search.

Requirements for "Going Internal:"

* Having "a product worth selling," i.e., an attractive company (or willingness to try harder).

* Sufficient volume of executive-level searches (10 to 20 per year?).

* Top management support that translates into influence with all hiring executives.

* Someone who really knows the retained search process running the practice.

* Dedication to research.

* Time in which to build resources carefully and well.

* Compensation of the search staff approaching that of search firms, at least for senior recruiters.

Advantages (even if you're a wise buyer of external search):

* Search team's industry knowledge is a given.

* Internal team typically knows more about past hires and who fits.

* No client blockages (off-limits) and just one client's interests at heart.

* With no search firm to blame, the company can focus on hiring effectiveness as an internal issue.

* Internal team's experience makes the company a smarter buyer of outside search services when necessary.

* Strong internal search practice capable of comparing internal to external candidates creates opportunities for better implementation of succession planning initiatives.

Disadvantages:

* In searches for functional positions, limited knowledge of other industries.

* Lack of "marquee value" of outside search consultant and third-party "marriage broker" role an external search consultant plays.

* Possibility of angering competitors by making direct approaches.

Challenges:

* Educating management. There's a perception in using search that you turn on the spigot and get an immediate flow of candidates, when in reality what works is original research, which takes time. In the new paradigm, recruiters and researchers work on three to five searches at a time -- not 25.

* Regulating the workload of the internal search staff. Again, most companies don't have the volume to support the function; even those who do experience hiring lulls.

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* Measuring hiring effectiveness well. This is key to understanding what works.

* Managing the sensitivity of raiding competitors -- first by monitoring where candidates are coming from. A direct approach must be handled delicately, i.e., always couched as a request for a referral. This includes a squeaky-clean approach to rusing.

* Setting clear guidelines for assignments the internal group will take (being able to say "no").

* Building the kind of research "reach" possessed by external search firms.

Overall Success Factors:

* Associate the internal executive-search group with succession-planning efforts.

* Be patient implementing an internal executive-search function.

* Continue to "massage" the function: Keep tweaking its structure and methodology.

* Keep communication active between internal search professionals and top management. (This can assist in "preventive retention" as well as recruiting.)

* Establish preferred-provider relationships with selected external search firms, as an extension of the internal effort.

* Hire internal search team leaders who have an executive search as well as corporate background.

* Measure results. Track competencies, "stick rate," time-to-fill, costs and diversity.

* Stay abreast of competitors' actions. Make it your business to know what works in other companies.

* Assist in onboarding. The internal search team is even better qualified than an external search consultant to anticipate and address issues that will help smooth the assimilation of new executives.

David Lord is founder of Harrisville, N.H.-based Executive Search Information Services, which helps companies establish in-house executive search operations.

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