CASE FOR BUILDING INTERNAL EXECUTIVE SEARCH

By Bob Worley, The Worley HR Consulting Group, IACPR At-Large Chapter                    

This article was published in IMPACT, a publication of the International Association of Corporate & Professional Recruitment (IACPR) – Summer 2000

Companies are beginning to take a serious look at forming internal executive search capability. With the acquisition of top-level talent being a critical core responsibility for Human Resources, this makes good sense. If the current and projected use of external executive search services is large enough and you desire to improve quality, then there can be a valid business case for building an internal executive search function.

There are several competitive advantages with an internal search group. As both employees and shareholders of the company, the internal group has a vested interest in securing the best talent to help advance the organization's performance. With only one client, your corporation, they cannot afford to fail in delivering top service. Internal search resources focus to a greater degree on providing stellar service in completing assignments. They are not distracted by marketing and business development to the same extent as external firms.

Internal search groups are free from the “blockage” issues that are inherent in all external firms. You want the best people and an internal group provides access to the total marketplace. The only way to cover the entire market when using external firms is to engage two or more firms that do not have overlapping relationships. While you have to be sensitive about targeting your company's key customer organizations or competition, this is also a concern with external firms.

Living in the company every day provides the internal group a better understanding of your corporate culture and each major business unit's mission and strategic plan. They have a unique perspective when assessing candidate fit, and this enables them to more effectively sell the candidate on the company. Lastly, the internal team has to live with the results of its work.

Companies considering internal search need to start by asking a few basic questions. How satisfied are you with the quality of talent you are getting from your current search firms? How fast are the firms presenting candidates whom are ultimately hired? What is the current completion rate for external searches? How successful are you in retaining these executives after two to three years? What are these services costing your company?

The primary drivers for starting an internal search group should be to improve the quality of executive recruiting performance, to improve completion rates, and to improve your success in attracting great talent to your company. Ultimately, you will have greater control over the recruiting process when you can continually refine and customize the process to meet your needs and the needs of the candidate marketplace. Through the creation of an internal search group cost savings emerge from lower overhead and reduction in expense for marketing and business development. Cutting costs, however, should not be the primary driver; done the right way, you will add immeasurable value. A recent Watson Wyatt study of more than 400 corporations showed that a great recruiting function can increase a company's market cap by 10%.

An internal search practice should not be expected to be the exclusive provider; you will still need quality relationships with a few external search firms. Executive search needs to be integrated with your overall recruiting strategy. To win the “War for Talent”, internal search needs to be approached as a specialized recruiting function; it is fundamentally different from high volume staffing and employment work. My advice is to start small, hire people who know and come from the search business, operate it by mirroring the processes of a quality search firm, and follow the AESC Professional Practice Guidelines. Let the success of the business and service demand drive the growth and infrastructure of your internal search group.

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