CHICAGO—Definitely not a fan of executive recruiters, author Joseph Daniel McCool contends that they promote personal career advancement over organizational needs, mangle corporate brands and send executive pay through the roof.
At a June 24 SHRM Annual Conference session titled “Deciding Who Leads: How to Influence Succession Planning When It’s Out of Your Hands,” held here the senior contributing editor for BusinessWeek urged HR professionals to steer away from external executive recruiters and foster more
• Talent management.
• Internal promotions.
• Performance management.
• Succession planning.
McCool, author of Deciding Who Leads (Davies-Black Publishing, 2008), said that one company’s leaders estimate executive recruitment ends up costing them about $900 an hour. “At the executive level, what you’re paying for is ‘performance in role,’ ” he said. “Once you find the right person, integrate them on the team and they get over the learning curve, hopefully, this person will invigorate the organization and drive financial results.”
But he has documented a “real disconnect” between executive recruiters and hiring organizations because “most recruiters believe they are paid to orchestrate the process.”
Organizations can no longer permit newly hired executives to “sink or swim,” he warned, saying that 40 percent of executives brought in from outside fail in the first 14 months on the job.
In many companies, leaders remain “unwilling to bring someone into [a senior] role unless that person has held the same role somewhere else, perpetuating the ‘glass ceiling.’ If we’re going to improve management succession, retention and organizational performance, we have to break out of that pattern. We need to consider people who can bring new experience to those roles.
“One of the reasons the glass ceiling exists today at the top management level is because executive recruitment is such a closed club,” he said, insisting that Ivy League grads predominate among the very top executive recruiters. “It’s a closed circle there,” he said. “I’m challenging the executive-search business to become more diverse. Because it’s not more diverse today, I believe executive recruiters support the glass ceiling. They’re not looking beyond the old boy club.”
When a company decides to engage an external recruiter, the single most important determinant of the outcome for any search assignment is that someone in the company stays engaged at every point, McCool insists.
Keep in mind that executive recruiters have “the potential to be constructive and destructive agents.” They:
• Drive the process. The best practice is to work with recruiters on a fixed-fee basis, he advised.
• Direct the process. “They spin it. They make gut or instinctual decisions about candidates.” One-on-one interviews are no longer a very effective assessment, he claims. “But executive recruiters are most experienced at this. You want to see psychometric tests and get away from making instinctual decisions.”
• Disrupt the process. “They steer the search the way they want it to go. The outcome is preordained,” he said.
Corporate satisfaction with executive recruiters has fallen under 50 percent for years, he complained. Hence, hiring companies must now develop their own leaders—creating myriad opportunities for HR professionals at every level, he said.
Yet internal candidates must still overcome bias at the highest levels. “Executive recruiters have a vested interest in cheerleading for external candidates. They are not external cheerleaders for all the bright and talented people within your organizations. This has contributed in a major way to escalation of executive pay. You are paying a 20 to 40 percent premium to bring in anyone from outside. Given the rate of churn [among top executives], this constantly pushes the bar on executive compensation,” McCool said.
Nancy M. Davis is editor of HR Magazine.
