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Value = cost and quality.

In the healthcare delivery process we understand that formula.  We understand the metrics even if we struggle to meet them in the critical areas of cost and quality.  But what about executive search?  How is quality defined in recruitment?

Slogans like “Leaders introducing leaders” does not speak to quality. Nor does the assertion made by a healthcare partner at one of the global search firms: “Clients pay us because we know the best leaders.” Given that this is the same firm that reported that in a review of 20,000 searches, 40 percent of their executive placements were fired, forced out or quit within the first 18 months, suggests that this, too, is a questionable measure of quality.  “We do more CEO searches than any other firm…”  Based on the less than stunning candidate “stick rate” of some large recruiting agencies, volume is certainly no quality indicator.  A CEO who leaves after only two years on the job, is no bargain for the client.

Every search firm that has ever existed  has extolled their service, their ability to identify and recruit the right candidate, their depth of experience, their partnering approach, and, of course, their quality.  I include myself on that list.

The truth is that quality in recruitment has remained a vague standard for a reason.  It is not in the interest of the search firm or internal recruiter to set specific standards. It is as if to say, “Don’t worry, we will tell you what quality is based on the circumstances and our performance.”  Situational quality.

That hardly seems fair to the clients.  Perhaps we should have a discussion regarding benchmarks for recruiting performance — both for internal recruiters and external search consultants.

My Perspective: I believe that quality in recruiting should be measured not at the time of placement but later, as the client gains the true measure of the successful candidate’s performance — the value contribution — as well as the length of their tenure. Thirty-six months seems like a reasonable benchmark for the candidate “stick rate” given the lofty professional fees clients pay to outside consultants, or the shocking true costs of a miss-hire. 

The quality formula should also incorporate a recruiter’s performance against a deadline to present candidates and the client’s satisfaction with the quality of that candidate panel.  If the recruiter fails on those two measures, perhaps the firm should reduce their fee since there is definitely additional associated expenses as a result.

Studies show that recruiting failures are just as common in internal recruiting situations. Internal recruiters, who enjoy the security of a guaranteed flow of assignments and job security during an economic downturn, should also be held to challenging performance benchmarks, including new employee value contribution (performance) — and their stick rate (tenure).   

Take Away:  Recruiting is not about finding qualified candidates with impressivecredentials and experience, but rather qualified candidates who can deliver results for a specific client.  Organizations that focus  more on the candidate degrees, credentials and the prestige of former employers without giving serious consideration to the cultural fit and the candidate’s previous success with similar challenges are begging for a failure.

Take Away: Clients must provide full disclosure and complete transparency. Experienced candidates who are not fully informed of the challenges, the political landscape and cultural dysfunctions are at a greater risk of failing, regardless of the qualifications and credentials.

An underlying cause of this type of failure, according to interviews with candidates who did not survive in a new assignment, is that they either did not understand the culture, the organization’s hidden agendas, the real performance deliverables or that the recruiter simply did not disclose, or papered over, some key problem. It is a fact that clients hate to admit their negatives. It is similarly true that many recruiters practice what I call “Don’t Ask, Don’t Tell” recruiting. In several postmortem interviews with unsuccessful candidates, they reported that clients, when confronted with glaring omissions that led to a termination, said, in effect, “If we told you, you might not have taken the job.”  That is certainly not a quality benchmark.

I know the standard recruiter response:  “It is the candidate’s responsibility to do their own due diligence.  We cannot be held responsible for….” That is just not fair or accurate.  Candidates are at a disadvantage in the recruiting process, which I have in the past defined as something akin to getting married after four or five dates.  They are rarely given adequate disclosure or insight be the recruiters and are further limited in their own due diligence by the limited time they have with the client before a decision is expected and by the desire to keep their interest confidential. The more they inquire about the client with outside sources looking for truth, the greater the risk they run in having their current employer discover their interest.

There is no substitute for integrity.  When we focus on the process — checking off the box, filling the vacancy — and not the results, recruiters contribute to an increase in the cost of healthcare.

Accountability and a willingness to share the financial risks in recruiting is an important framework by which quality recruiting can be defined.

I think this is an important discussion, and I invite your comments and suggestions.

© 2010 John Gregory Self