Why and How Smaller Companies Should Utilize Retained Search FirmsLIFE SCIENCE RECRUITERS, BIOTECH RECRUITERS, MEDICAL DIAGNOSTICS RECRUITERS
Early-stage and emerging growth Life Science, Biotechnology, and Medical Device Companies have a lot to worry about when hiring a senior-level executive or other critical position. A bad hire for a small or medium-sized company can negatively impact the employees and harm your business. Early-stage companies with limited human resource professionals realize too late that they don't have the necessary time to invest in hiring for these positions, and their business suffers for it.
Retained or exclusive recruitment searches are a great way to fill critical positions. With these models, you pay for services in advance to get the recruiter to prioritize your search. If you have selected the right firm and recruiter, they will become a partner in your endeavor to hire the right person. Retained searches alleviate the issue of focused effort by capturing a recruiting firm's full attention and relying on a firm to deliver quality candidates.
How to select the right firm:
The following advice applies to emerging growth and small to medium size companies in the diagnostics, medical device, and life science industries.
- Select a firm that specializes in your niche.
For instance, Connexis Search Group has recruited candidates in the CLIA lab space for over twenty years, and as a result, we have vast relationships with a wide range of candidates. We can quickly find the best candidates via our connections and network.
- Small and medium-sized companies should avoid using large national recruiting firms.
Recently I spoke to a CFO of a small (less than 200 employees) biotechnology company that had hired a national recruiting firm to help them find a President. The national firm had searched for nine months and was not delivering viable candidates since they didn't understand the industry. The CFO found a candidate through his network but still had to pay the firm for the placement. I will not mention the name of that specific national firm, but here are a few others: Korn Ferry, Russell Reynolds, and Heidrick Struggles.
Another advantage of using a small boutique firm is its reputation is critical since they typically only have a small number of clients and generally cannot afford to lose them. Larger retained firms are not concerned about losing one small client and will typically act accordingly.
Larger retained firms typically use one of their senior executives to secure the search but then pass it to a junior recruiter to find the candidates. The junior recruiter is usually not from the industry and doesn't understand the industry well enough to find appropriate candidates.
For boutique firms, such as Connexis Search Group, the recruiting is done by a senior recruiter with industry-specific knowledge, resulting in a pool of appropriate candidates.
Now that you have chosen the right firm, ensure your Agreement protects your company.
The potential for a retained recruiting firm to take your money and not deliver a viable candidate is genuine. We have seen it many times in industries where we actively recruit, such as Diagnostics, CLIA laboratory, Life Science, and Biotechnology. Several years ago, I spoke to the CEO of a fast-growing CLIA lab that had paid 50% of the total fee and never received a viable candidate from the retained firm. So how can you avoid this worst-case scenario? Is it avoidable at all? Yes!
As a decision-maker for your company, it is up to you to negotiate favorable terms for your company. At Connexis Search Group, we offer a performance-based retainer. We offer this because we are confident in placing a qualified candidate promptly. We do not keep any of our client's money if we're unsuccessful and fail to deliver at least two viable candidates within 30 to 45 days of receiving the search assignment. Most other retained firms we have come across do not offer any form of refund.
Example of a performance clause in a retained agreement:
"Upon executing this Agreement, the client shall pay Connexis Search Group $16,667, which is one-third of the estimated fee. If Connexis Search Group fails to present at least two viable candidates within forty-five days of agreement execution, the initial payment will be refunded. The second payment of $16,667 is due after Connexis Search Group has presented at least two candidates and completed a phone interview with a company representative. Viable candidates mean candidates whom the client agrees to a phone interview. Upon hiring this position, the client shall pay Connexis Search Group a final non-refundable fee equal to the difference between twenty-five percent (25%) of the guaranteed first-year compensation less previous amounts paid."
Retained searches are a powerful tool if you select the appropriate firm and protect yourself with a search agreement that holds the firm accountable for delivering candidates. Remember to choose a firm that knows your industry and is willing to offer a performance guarantee, like the example in this article.