Executive search was booming in 2006 and 2007. Opportunities in Pakistan were exploding. Banks discovered personal loans and credit cards as the new frontier. Telecoms were creeping into every nook and corner of the country and other industries were using the slip stream of a fast growing economy and a new emerging middle class. In addition the Middle East had an unquenchable thirst for relatively cheap Pakistani professionals creating a perfect storm for aspiring Pakistani career seekers. Companies didn’t know where to find the candidates to fill their vacancies. Salaries were skyrocketing and executive search companies had become very busy and began reaping solid returns.
It was also the beginning of the end. Everybody jumped on the band wagon trying to cash in on the boom. The number of companies and individuals offering ‘executive search’ in Pakistan at some count reached more than 100. With so many people vested in this business segment the competition started its race to end at the proverbial bottom the moment the economy tanked and the number of vacancies dried up. Fees in the mid ’00’s at 2 months of the placed individuals annual salary dropped to as low as 1/2 month salary for the successful placement of a candidate in the space of a couple of months.
With an over supply of talent, companies started to use other sources and channels to identify candidates as well as ‘farmed’ out their vacancies to multiple search agencies, all fighting for the remaining crumbs. As a result the chance for a search agency to close a position and earn a meager success fee dropped close to zero. Search agencies in response were only willing to make a minimal effort to find a candidate which affected the quality of the search, impacting how companies would value the service and increase the number of channels further reducing the chance of a fee etc. A vicious circle was created.
As a consequence I hear companies complain about the lack of quality of search firms, I hear search firms complain about their lack of revenue and I hear candidates complain that search firms and companies alike show little professionalism in the selection and courting process. In others words a lose-lose-lose situation.
How to turn this around? The obvious solution lies in breaking this downward spiral and creating a situation where everybody wins. The company finds the right talented resource at the right time, the candidate is approached, selected and placed in a professional manner and the executive search firms earns a decent income.
To turn this around the ball is in the court of the search agencies. They have to make a first step and commit themselves to significantly improving the quality of the search service and:
- Adhere to a professional code of conduct highlighting their responsibility and guide their actions towards clients and candidates
- Truly understand the clients requirements and translate that into search criteria (skills, competencies and fit)
- Use every channel possible to search candidates (database, social media, referrals etc.)
- Ensure appropriate due diligence on and permission from the candidate before presenting them to the client
- Guarantee quick response times to both clients and candidates
The next step is for executive search firms to convince clients that a successful search assignment requires a partnership between the client and search agency. A partnership in which both parties win, a company finds a quality candidate and the agency earns a decent living. For this to work you have to create a mutual commitment towards the search in which both parties have ‘skin in the game’. The best way to create this is by complementing the successful placement fee with an upfront ‘effort fee’ through which both of them commit each other to completing a successful placement. Of course this is not new and is the only way executive search firms in other parts of the world work. In fact some executive search firms have switched to a 100% of upfront fee guaranteeing a successful placement.
Companies have to realize that for them to receive a decent quality service they have to make a commitment and pay for that service whilst search agencies have to commit themselves to providing a quality service. This goes hand in hand and only when both make a move forward will we be able to stop the downward trend in which everybody loses.
What are the issues that you have faced with either companies or search firms and how do you think can we re-invent executive search in Pakistan?
– Paul Keijzer