Executive Recruiting: This Is What You Need to Understand

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Executive recruiting is big business. It generated $14 billion dollars last year, a 50 percent increase from just a decade ago.

Finding and hiring an executive is important for the long-term success of a company. High-performing executives can add millions of dollars to a company's annual revenue.

We'll take a look at executive search best practices, right from finding the right candidate through the interviewing process to the hiring phase.

Read on to learn about executive recruiting excellence!

What Is Executive Recruiting?

An executive search is a process used to identify and ultimately hire professionals to fill the top positions in a company. These roles might be Chief Executive Officer, Chief Financial Officer, and Chief Information Officer. Any position with the word "Chief" in the title qualifies as an executive-level role. 

Companies might also launch an executive search for other roles that are highly specialized, difficult to fill, or require a high-security clearance. For example, a company might be seeking an expert in cybersecurity or military contracting. 

Defining the Role

Before you launch an executive search, it's important to know exactly who you will be searching for. You'll want to create a job description that lays out the responsibilities and expectations for the position.

Executive-level jobs tend to be more strategic than tactical, so keep that in mind as you define the role. You'll focus less on specifics like, "Secure 10 new customers a month" and more on high-level goals like "Conduct long-range assessment of business operations". 

It's also important to solicit input from stakeholders across the organization. Many companies form hiring committees to develop the role requirements that best reflect the business needs of the organization.

You might also reach out to people in your network who hold similar roles at other companies. Ask a Chief Legal Officer what her key responsibilities are and what she would recommend you include in the job description at your company. 

Identifying Key Qualifications

Once you've created the job description, you'll move to the next step of identifying the qualifications. These might include education requirements like a master's degree or a Ph.D. You might also require a specific number of years in the field or previous executive-level experience.

It's also important to focus on soft skills, like conflict resolution and problem-solving. You may not include all these in the actual job description. Instead, use your interview time to determine if the candidate has the desired skills.

For example, one survey of executives found the ability to work well across cultures was one of the most important leadership qualities. Other surveys identified four categories of skills essential to the success of an executive leader.

These top executive leadership skills are:

1. Cognitive skills: problem-solving and critical thinking

2. Interpersonal skills: social and cultural awareness, negotiation, crisis management

3. Business skills: finances, revenue management, growth

4. Strategic skills: perceptiveness, vision 

One thing that will help you define these qualifications is to identify where your company is in a business cycle. Is the company prioritizing growth, restructuring, or rebuilding? Knowing what phase the company is in or would like to be in will help better define the kind of executive who can drive those priorities.

Finding Candidates

The first question to ask is whether your company is looking inside or outside for candidates. There are good reasons for each, and your company may want to explore both options.

There are several factors to consider when deciding on an internal vs. external search. First, does your company have a succession plan already in place? Some companies create these plans for every functional area to identify and foster emerging leaders. Your next CEO may already work for the company.

Second, is the company successful with its current business plan and executive leadership team? Could it benefit from new ideas and a fresh perspective?

Are there holes in the company's knowledge base that could be filled with a high-performing executive from another company? Companies seek external candidates to fill 20 to 40 percent of executive vacancies.

Once you know where you're going to look, ask your executive leaders for any recommendations they might have for candidates. Provide your executives with a short description of the position. 

Include three or four bullet points of the most important performance expectations.

Reach out to your own network and ask for recommendations. Your network can live in any number of places. It might be a professional network on a site like LinkedIn. It could also be an alumni association or industry group.

Interviewing Candidates

An executive search can take as long as six months. The positions are high-level and affect the company's future so dramatically. They can also be expensive, costing as much as $15,000 per hire. 

All the more reason to spend quality time with your candidates during the interviewing process. This will likely happen in a series of contacts, starting with your first email. Keep in mind, 86 percent of executive candidates prefer to be contacted through their private email addresses. 

As you move through the interviewing process, remember that it's a two-way street. You're evaluating the candidate, and she is evaluating your company. Every contact point is important from that first email to a phone conversation to an in-person meeting. 

Ideally, your candidate will spend time in your office where they can meet your executive leaders and board members if appropriate and tour the facility. However, these in-person visits aren't always possible. Virtual hiring is an option using a variety of video conferencing technologies.

Some companies may ask the candidate to complete a series of assignments like a personality assessment and a cognitive functioning test. It is important to stress confidentiality to the candidate throughout this recruiting process.

The Offer

At the executive level, the compensation offer will most likely include both the salary and additional benefits. You may choose to offer stock options and equity shares, memberships in industry organizations or gyms, or a company vehicle.

You will likely extend the offer to the candidate either in person or in a phone call. You will follow up on that conversation by sending the offer in writing. An "offer letter" will give the candidate an opportunity to focus on your conversation without needing to take notes.

It is appropriate to give the candidate a period of time to review the offer before providing a response. Depending on how quickly you need to fill the CEO, CFO, CMO, or other C-Suite position, you might give the candidate three to five days to review the offer.

The Stakes Are High

Executive recruiting is not a speedy process. You should not expect to rush the candidate through all the steps. In fact, you may cause problems for yourself and the company if you try to speed-hire your next CEO.

The turnover rate for CEO's is rising. In fact, one study shows CEOs appointed in the past 25 years are three times more likely to be fired than CEOs who were hired earlier. The same goes for CFOs, CMOs, and other top executives to a lesser extent.

Please check out our blog for more great articles to help in your executive recruiting and hiring efforts. Visit the HR and Careers sections of the Bootstrap Business Blog right now for better recruiting strategies.

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