The difference between a Retained Search and a Success Fee based Search ?

There is a general belief by those people not familiar with the search business, that a Success Fee approach doesn't cost more than a Retained Search, but has the advantage that you don't pay unless you hire someone. In reality, the truth is elsewhere. For a retained assignment, the search firm has an obligation to find a suitable candidate for the position, something that a consultant working on a success fee basis does not have. The consultant undertaking the retained search must invest his time in an in-depth understanding of the client's needs and the way the company is organized. He must approach a large group of candidates and make a rigorous selection amongst them. However, when working on a success fee basis, the consultant cannot commit to this essential preparatory work since he has no guarantee that he will be paid for the time invested. He will, as a result, generally present to the client, the candidates that he has in his database, or in the best case, he might call a few potential candidates that he knows. One cannot blame the consultant for this approach, rather it is the search principle that is at fault since it puts the onus of risk with the client. The same client who will either find himself with no suitable candidates after wasting many months of fruitless waiting, or worse still, being pressured to hire someone clearly unsuitable for the position due to the combined pressure from the business and from the consultant, eager to collect his fee !

Why is it that a retained search assignment can work when all other approaches have failed ?

The in-depth analysis carried out during the initial phase of the assignment enables the rapid identification of any disconnects between what the clients wants and what the market can offer. Also in this phase, it is usually possible to identify issues related to a dysfunctional organization which could complicate the recruiting process. The other search approaches do not always allow the identification of these two elements which can make the assignment problematic. In addition, a retained search is a process which improves as it progresses, allowing necessary on-going changes to be made in order to find the right candidate for the client.

Why are Management Audits becoming more popular ?

Other than those situations where there is an obvious explanation (company mergers or purchases), the obvious reason is that companies are becoming more and more complex and thereby difficult to manage. As a result, talented management is more than ever a key ingredient for success. A natural consequence of this situation is for the Board of Directors or the management committee to verify the alignment between the corporate strategy, the company organization and the management team in place. It is also becoming very apparent, after our numerous experiences in this domain, that the team in place generally knows the answers to the questions that the Board is asking. As such, the audit enables the corporate strategy to be re-visited and re-focused whilst at the same time achieving greater buy-in from the management team.