Re-Inventing Executive Search in Pakistan

Double Spiral Staircase Inside Vatican MuseumsThe time has come to re-invent Executive Search in Pakistan as the current way of doing executive search is detrimental for all parties involved; companies, candidates and search agencies.

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

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11 thoughts on “Re-Inventing Executive Search in Pakistan

  1. i think, we can use the international sports industry to frame the local executive search domain in Pakistan. Professionals should be “managed” by executive firms – maybe exclusitivity on candidate could be an option, forcing agencies to bring their house in order & become more professional/ ethical in their operations. Corporates should not make any upfront payments for efforts. In modern day performance management processes we also reward outcome more than we reward the effort. i dont see why the same principle should not be applied here.

    • Hi Faraz, interesting concept and certainly need a lot of maturity from candidates, companies and search agencies. Worth thinking it through.

      I agree with the fact that search agencies should continue to be rewarded on results. However in order to significantly enhance the quality and break the spiral we should in my view complement this by another fee that cements a mutual commitment from bit parties. Don’t know many companies (apart from start up Internet companies)
      who give their service in full for free hoping to get paid at the end for their efforts. Certainly don’t think the telecom business operates a ‘success based’ business model 🙂

  2. Hum, i kind of like the concept too, but then the agencies need to get their act together – saving some profiles off Linkedin and then bombarding those on the client has become a norm with most companies. There’s no “value addition” – a suitability assessment by the headhunter, maybe a screening interview that reflects that some real effort has been made to address the client’s need.

    • Absolutely and that is why I mentioned that the first step is for search firms to get their quality-act together. You can’t expect companies to pay for something that doesn’t add value.

  3. As for the comment on Telecom industry – it’s at it’s lowest since the boom. Lack of an effective Regulator, Price Wars, massively incremental costs of running operations, judicial activism, forced shutdowns ruining our revenues have played havoc. It’s a silly situation. Yet the Government wants the industry to invest tremendous amount of acquisition of 3G licenses – even though the Telecom policy is obsolete and people at the helm of affairs have no clue about the intricacies of the industry. Not to say, that the Operators lacks common foresight.

  4. Commendable article Paul.
    I think we also need to highlight the skills gap that exists and how it can be addressed.
    – MIR

  5. Hi Paul,

    Interesting Article.

    Since I work in a closely related area for a telecom, I can understand the decline executive search firms are going through. The important aspect for firms is to understand that the same decline is being faced by every company, every industry. The budgets are tighter, competition higher and talent pool ever increasing. Not to forget that with the evolution of technology, companies have recruitment teams doing their own executive search, through the same channels used by ES firms. They have access to the same information (LinkedIn, Recruitment sites, company websites etc.). Candidates on the other hand have direct access to company recruiters.

    In such a scenario, there is really only one question. Whats the differentiation ES firms bring to the table? What’s their unique selling proposition?

    In my opinion, in the competitive environment, there are some key focus areas:

    1. Quality – I have seen ES firms send resumes by the numbers hoping the probability of one of them being selected increases by sending more resumes.
    2. Talent Pool – There are a few positions across all industries that open up regularly. For these positions, ES firms should maintain a pool of exceptional candidates, sorted by position/level, ready to be presented as soon as a position opens up. Be proactive.
    3. Response time – Time is money.
    4. Customer Service

    I think even in the most trying times, people are willing to pay outrageous amounts for anything they feel is worth it. So the question is – Are you worth it?

    P.S. I seem to have written an article of my own. Apologies! 🙂

    – Anas Ahmed

    • Dear Anas, thank you for sharing your insights.

      Think you are spot on. It’s all about creating value as perceived by the client. Whether it is to do with quality of process, access to top candidates or speed. It’s about showing your worth.

      At the same time companies also should reward search companies that deliver this value and not treat them all alike.

      Paul

  6. Here my two bits,
    I’ve yet to see an advert for C level position posted on behalf of the BOD…..technically speaking they are the ones who should define this need. A few “undiscussibles” are ill conceived that contribute to the detriment of many:

    a. Does the BOD need to change the top team (starting with the CEO/MD)?….this of course cannot be advertised as such but they need to be clear on the matter and has significant affect on the final candidates….and the executive search team needs to know this clearly.

    b. Is the C position empowered to create a new strategic path or is the BOD view to be implemented via these position holders? [I know of a few C level candidates who will not consider joining just for implementation].

    c. Is organizational design up for change? we know of too many instances where a significant part of senior positions have been created for administrative ease as oppose to strategic desirability (our financial sector is a testament to this abuse)….And C level position holders tend to have their own views to Org design that fundamentally affects bench strength of a company…job-person fit issues.

    d. How does the BOD view risk management, both human capital & financial capital; discretion of CEO/MD or an institutional concern? [too many times the classification of top talent changes overnight]

    For my part I would like to see the BOD take a much more serious responsibility about C-Level positions than what appears to be the current practice…. executive search agencies/companies are blinded when they are not engaged with the BOD for such position….it becomes a CV game…sad but true.

  7. A very need of the day thought provoking lines by Paul.. Highly appreciated.. In order to improve quality and to barricade the Unprofessional and Accidental Head Hunters and Executive Search Consultant an Association must be formulated which must define the rules for the game and before an agency starts it must be a mandate to register with that Association enabling to endorse the reputability of the Agency.Approved List of Executive Search Firm and agencies must be routed to all the companies or the companies must be asked to ensure that they are doing business with a Reputed and Quality Agency not a well frog.

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