Top 15 Challenges Faced by Executive Search Firms
Running a recruitment agency is a tricky business. The only way to survive and do well is to be alert, and to upgrade yourself.
The main goals of a recruitment agency are to attract the right candidates, to get new clients and to retain the clients.
To achieve these goals there are some common challenges that every executive search firm, big or small, faces.
Let us look at the top 15 challenges faced by executive search firms and possible ways to address them.
1. Building a trusted brand identity
Executive search firms face a challenge in building a trusted brand identity. Your services are not the only thing that is important to consider when marketing your agency. How you position yourself to your clients forms an essential part of creating a customer-focussed brand identity.
You will need to engage in -
1) Highlighting your niche and areas of expertise to your clients and candidates.
2) Sharing a recruitment plan and providing transparency to your clients.
3) Make your client a part of the process by conducting periodic reviews.
4) Having a decent website.
5) Having a slogan and a core values section on your website or proposal.
Your company's core values must aim at promoting a positive candidate and client experience. There should be a continuous and collective effort by you and your team to upload your core values.
2. Increasing competition
Competition exists in every business. As an executive search firm, you will be competing in the following areas:
1) maintaining the quality of talent pool, promoting your jobs on job boards.
2. building case studies to attract new clients retaining your clients and not losing them to competition
Adding value to your client to showcase yourself as a leader in the industry can help to reduce your competition. A few ways that you can do so-
1) Conduct regular webinars.
2) Put your USPs and value statements into words and provide exactly that.
3) Provide comprehensive case studies for the type of recruitment you offer.
4) Cross-sell your services to make your firm more sticky.
3. Hiring the right talent
While you provide the right talent to your clients, it is also vital to hire the right talent for yourself.
Many recruitment agencies make the mistake of employing the wrong recruiter.
It is easy to find less fitting people having a low salary expectation. It is also easy to find undergraduates who are wanting to test waters for a short time and make a quick buck.
A lesser fitting hire can cost you your time and energy that you can otherwise reserve for growing your firm.
Conducting an informal reference check, checking their interest levels, and aspirations and testing them on certain skills can help you map the right recruiter for the right stage of your recruitment process.
4. Being short on staff
Suddenly being short on staff is another big challenge your recruitment agency may face.
When there is an immediate surge in requirements and with a tight deadline, you are likely to be asking for more recruiters to join and help you.
A few ways in which you can address this challenge are –
1) Have a pool of independent recruiters.
2) Temporary staff ready to work on short-term requirements.
3) Hiring on demand virtual assistants to source and validate the resumes.
5. Financial unpredictability
Even today, recruitment agencies are at the risk of a high amount of financial unpredictability. It poses to be a challenge for recruitment firms all over.
Unpredictability in your flow of cash can jeopardize long-term business growth.
Financial unpredictability can come in when clients do not pay on time, when candidates do not join the client, and when candidates leave the client before a guarantee period. You can reduce unpredictability in your finances by-
1) Having a retainer and contingency fee structure
2) Diversifying your agency's portfolio.
3) Increasing your services to offer coaching, assessments, and talent onboarding.
6. Being ‘Ghosted’ by candidates
Candidates can disappear at any stage of your recruiting process.
Being ghosted by candidates is a challenge for all recruiters.
They can stop picking up your calls before or after the interviews, after salary negotiations, or even on the day of joining!
Few things you can do to avoid being ghosted –
1) Identify their notice period, salary demand, and their first choice of location.
2) Continuous follow-up with the candidates by giving them information snippets about the company. These may not be the only ways, but it is a great start to avoid being ‘ghosted’ by candidates.
7. Time crunches
Recruitment works on a tight timeline. A pressing recruitment agency problem is the shortage of time.
The clients may set an unreasonable timeline for hiring for niche skills. They may also give you an unrealistic timeline for a bulk hiring project.
The following will help to address the time crunch problems.
1) Set out clear agreement while speaking with the clients about their positions.
2) Offer them clarity on why a requisition will take two months to close rather than a month.
3) Offer them a hiring plan, mentioning the of type of positions and how long each will need to fill, and why.
8. Dishonest candidates
You go through the entire recruitment process only to find out that the candidate was dishonest.
As a recruiter, you may have faced a similar scenario.
Candidates can fake about certain parts of their resume.
It could be about their work experience, or even about their education!
Also, a proxy candidate could be interviewing on a telephonic interview on behalf of the actual candidate.
How can you see through this predicament?
1) Check for social proof by visiting their social media handles.
2) Observe their engagement with company or with their alma mater.
3) Conduct a first-level video or telephonic interview to gauge confidence and truthfulness.
9. Holding a Candidate's attention
Relationship with candidates is your long term asset. Getting and holding a candidate's attention is an important art to master.
The candidate will take your interviews more seriously if s/he has your attention.
Candidates may lose interest if asked about their salary right at the beginning of a cold call.
Not enquiring whether it is the right time to speak, or having no empathy towards them can spoil your relationship with the candidate.
An unclear job description, vague company details, and vague expectations can easily make your candidate take you less seriously.
A candidate is drawn to a position if the recruiter at your agency can provide him/her with a 'positive candidate experience'.
You can achieve this by -
1) Training recruiters with a Standard Operating Procedure while conducting calls, especially with senior candidates.
2) By enquiring if the candidate is open to exploring new opportunities.
3) Speaking of the company hiring rather than only the job. Holding a candidate’s attention needs to be practiced in-house by imparting proper training and following communication protocols.
10. Talent Shortage
The impact of talent shortage and the ripple effect it creates with your client is quite stark.
The technical ‘hard’ skills and the workplace soft skills are a huge driving factor behind the shortage.
You can address this shortage –
1. Tapping into small companies.
2. Joining facebook groups for your specific niche.
3. Resorting to a specialist staff to close critical positions with clients.
4. Up-skilling and coaching your existing recruitment team.
11. Stubborn Clients
A stubborn client is a double edged sword. This client can either make you grow, or ruin your yearly goals.
A stubborn client is not easy to please . They may reject all your profiles, say a candidate is not suitable for the company's culture, or give you a hard time with unrealistic expectations.
What you can do is-
1) Calmly and patiently speak with the client about their expectations.
2) Listen to the specifics and enquire what characteristics the candidate should possess to fit in their organization.
3) Ask and identify what was missing or what was wrong in the profiles so that you eliminate the mistake going forward.
Addressing a stubborn client's pain points with better communication can help barriers and help you deal with them better.
12. Maintenance costs
Operating a recruitment agency requires a lot of time, money and effort.
It includes the operational and overhead costs.
These can reduce by-
1) Hiring remote recruiters.
2) Co-working space or sub-leasing an office space.
3) Leasing systems and equipment.
13. Adopting New Technologies
Selecting and adopting a new software can be challenging any executive search firm.
But, adapting to latest trends can not be ignored.
By using an easy to use recruitment software, you can sort profiles faster and keep a better track of your process that you could with spreadsheets or with manual note taking.
Without adopting the right technology, a company remaing be inefficient.
A recruitment software will help you –
1) Structure the first-level screening process of the candidate.
2) Provide better coordination specially when working remotely.
3) Reduce time to hire.
4) Communicate better with both clients and candidates. You can also transform your candidate and client experience by adopting the latest tools available.
14. Unrealistic Client Expectations
There are many clients with unrealistic expectations.
It is important to clarify expectations and job descriptions with your clients.
The client may expect things ranging from short turnaround time, finding a candidate with diverse skills, offering low pay for a high-skilled job, or instant hiring.
Few ways to address unrealistic client expectations are-
1) Educate the clients about the talent market.
2) Help clients quantify the candidates in relation to the actual cost of the vacancies.
3) Recommend the right market salary to ensure you can source well-matched candidates.
4) Get a clear job description. With patience and practical guidelines, you can address these recruitment challenges better.
15. Retaining Candidates
Multiple recruitment firms look for candidates with similar skills, which makes it difficult to retain candidates.
The following ideas can help to not lose candidates to a competition.
1) Understand the aspirations of the candidate.
2) Explain them about the benefits of joining the company.
3) how it can help them grow professionally.
4) Regularly communicate with candidates at every stage of the interview.
5) Build a rapport with your candidates.
As a recruitment agency owner, your job is to ensure that both your clients and your candidates are happy with your services.