Executive Search has typically followed the retainer model for years, but recently, clients have started to challenge this model.
The old model requires payment to initiate the search, with additional payments made in at regular installments for both the search and administrative costs. What you get is specialized recruitment with domain experience and network of candidates. This model works well if you are in a highly specialized industry; however, there is a new trend of pulling executives from outside industries if it’s not a regulated environment or requiring specialized skills.
CEO, CMO, CFO, CHRO, CPO, CRO, General Managers, Head of Product, etc. are increasingly in short supply, requiring searches that focus on personalities, transferable skills, track record of success in a similar environment, etc. As the current leadership ages out, either much more junior replacements will fill the ranks, or pulling from another industry, perhaps one that is in general decline, is often the preferred choice.
In order to bring in an outsider, contingency-based firms tend to be a better choice, in that they cover a wider range of roles and industries, offering more insight into business solutions and candidate options. A company with small growth that is looking to accelerate doesn’t necessary need someone who’s understands everything about that industry, as the business goal is either tied to needing changes to product, operating efficiency, increasing sales, revamping marketing, or another area…this will define the best candidate to achieve the business objective, and they may be from outside the industry. A startup that has made several recent acquisitions requires someone to navigate the nuances of integrating several companies/products. A pivot requires someone who can establish a new GTM strategy and rebranding. A reboot requires someone who has experience making calculated and tough decisions across several departments, while not making too many waves across the junior employee base. All of these are unique profiles that have more to do with transferable skills to achieve the business goal than a track record of working in industry X.
A large pipeline of leaders within a specific industry can come from either model, as new tools for customized search are available to all recruiters, which doesn’t require the existing rolodex of candidates. The difference lies in the experience outside of a specific industry that focuses on business objectives. Contingency Executive Search is also performance based, so you’re not paying unless a solution is found. This means, by design, your contingency-based recruiter will learn your business needs just as well as a retained search recruiter.
If you’re looking to kick off an Executive Search with fresh ideas, 80Twenty is here to help you explore the new trend in the contingency model with modern search methodologies.