Cost vs. Value in Recruiting & Hiring

In recent discussions with two quite different clients in Singapore they mentioned that they had each failed to resolve critical hiring needs that had originated well over a year ago.

Firm one had known for some time that they were losing a partner in a strategically vital practice area and would require a replacement more or less immediately to maintain client loyalty and market position as well as to give the department concerned a much needed boost of energy.

For firm two the need was generated by the sudden departure of two partners from the same department which had left a giant hole in their service capabilities for their panel clients – again clients and reputation were at risk.

Both firms asked us to prepare search proposals and in both cases multiple international offices and internal committees were involved in the making of a decision to go to search. The local managing partners were understandably very clear that focussed, detailed and above all discreet search methodologies were vital and were pleasingly happy that Cogence Search were the right people to perform this service for them.

For firm one the conclusion was that they did not wish to pay a search fee – they retained a contingent service provider on an “exclusive basis” – twelve months on they have produced nothing – literally nothing at all.

For firm two they again concluded that they did not wish to pay a search fee – they had a two pronged approach to the solution; firstly they would see if they could do it themselves and secondly they would put it to the contingent recruitment market. We were invited to work on the role on a contingent basis but declined knowing that it simply would not work - we would not have the time and money required to deliver a good service nor the data and authority that accompanies a search process. Again the firm paid nothing and have received nothing.

Bluntly put both firms received what they had paid for.

Both firms acknowledge that the failure to secure replacements has cost them many hundreds of thousands of pounds – orders of magnitude higher than not only the initial search fee but the entire fee for a successful lateral hire. Both pray in aid the benefit of hindsight albeit accepting that they knew that in declining to commit to search this was a probable outcome. They each acknowledge that reputational harm has been caused to their firms by the failure to restore key service areas to full capacity.

The problem in committing to a search process seems to be all about accountability: If no money is spent and no solution achieved no-one is to blame; if a retainer is paid and no solution reached the person who authorised the expenditure is to blame.

James Nathan – formerly a legal search consultant now an executive coach in the legal sector posted a great blog on this topic – I have received his permission to link to this he is right in all respects.

Search confers an obligation on the provider to deliver a solution – the client's need becomes the provider’s problem. The initial fee in a search mitigates the cost/risk of the process but does not cover all costs or generate any profit – the search consultant has an obligation to the client to fill the role and a commercial imperative to do so. The search consultant has a level of data and authority that enormously exceeds that available to a contingent recruiter – he can use this and the time which is purchased by the initial fee to access and move the best candidates in the market.

The contingent recruiter can only access candidates he has swift access to and these will generally be those active in the market – it is seldom the case that candidates actively seeking a new position are the best in the market. The best candidates in the market are generally well looked after where they are and it takes a well-structured approach and well-reasoned argument to get them to the table.

The passage of time, lack of progress and loss of both reputation and clients is, in almost all conceivable circumstances, far more expensive than the cost of a search. Contingent solutions are happenstance – not part of a well-defined strategy – generally don’t generate the best candidates in the market and tend to come with an equivalent fee. Why is paying the same money for a poorer service so popular?

It is not surprising that in lateral legal recruitment as in all areas of professional services you get what you pay for: It remains somewhat surprising that firms with a very clear understanding of their value proposition to their client base and commitment to excellence in their service levels often fail to recognise that the same proposition is true for those that support their growth.

Clearly the above is not true of all firms or we would not exist: equally clearly the issue is not that all of the above is not widely understood. The problem is that a modest early investment in a search process is seen as a great risk and the very real likelihood of lost revenue and clients is a deferred problem for which no one accepts or is expected to accept responsibility.

Mark Husband

Managing Director

Cogence Search

Views: 632

Comment by Keith D. Halperin on March 10, 2014 at 2:31pm


Early mention of the poster's firm in the body of the posting.

Comment by Mark Husband on March 10, 2014 at 9:15pm

Really? One obiter reference in the fourth paragraph and nowhere else in an 826 word article and it upsets you?

To assist I will mention that there are other competing companies in the legal recruitment market including Mr Halperin's Korn Ferry.

This site, as I understand it, is aimed at the professional recruitment market not the client market. We all have channels for advertisement and this is not one of them. I see no valid purpose to your post.

Comment by Keith D. Halperin on March 11, 2014 at 2:26pm

@ Mark:

"Really? One obiter reference in the fourth paragraph and nowhere else in an 826 word article and it upsets you?" Yes. IMHO, that's an advertisement.

" Mr Halperin's Korn Ferry."  Not mine- I've never worked for them, consulted for them, done anything with them beyond a few calls, emails, and maybe an interview with their Futurestep Division.

"This site, as I understand it, is aimed at the professional recruitment market not the client market. We all have channels for advertisement and this is not one of them. I see no valid purpose to your post." I couldn't have said it better. If I understand it, RBC isn't for self-promotion or free advertising.

Am I wrong?


Comment by Mitch Sullivan on March 12, 2014 at 10:36am

Advert or no advert, the fact remains this is a great blog.

The next great mental hurdle companies now have to get past is learning how different recruitment agencies work so they can buy from them more successfully.

I've given up on the majority of agencies ever being able to sell properly.

Comment by Keith D. Halperin on March 12, 2014 at 2:56pm

trained, professional recruiters like Domenic's who do this kind of work are worth every penny. As the saying goes: "For 30% we need you to do the impossible; the merely 'very difficult' we can do ourselves..."

The problem is most companies DON'T need this level of expertise, and so go with agencies filled with dialing for dollars (or pounds) newbies who're trying to sell them candidates off job boards or from RPOs for 15-20% to clients too ignorant to know they could go directly to those resources for a FRACTION of the cost.



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