Speed: The Third of Six Wrong Reasons

This is the third in a series of posts responding to James Aston’s article in askGrapevineHR about establishing an in-house executive search division. He indicates that while the cost savings are attractive, there are six reasons not to set up an in-house function. He’s wrong on every one.

Aston’s six reasons for using a search firm over an in-house function are:

• Objectivity, advocacy and perspective
• Speed
• Reputation
• Specialism
• Confidentiality
• Candidate quality, reach and trust

Last week I compared the perspective that in-house recruiters have vis-a-vis that of third party recruiters. This week we’ll address the aspect of speed.

Aston asks, “Who is more motivated: the in-house salaried employee or the external search firm whose full fees only apply once they’ve successfully filled a role?” I don’t think that’s the right question.

The right question would be: Who is more motivated, the in-house recruiter whose job is on the line and has not only their client breathing down their neck, but their boss (and other human resources leadership) as well, or the external recruiter who will receive a fee whether or not they successfully complete a search?” That’s the right question if we’re comparing retained recruiters to in-house recruiters.

If we’re comparing contingency recruiters to in-house recruiters, the question is: Who is more motivated, the in-house recruiter whose whose job is on the line and has not only their client breathing down their neck, but their boss (and other human resources leadership) as well, or the contingency recruiter who is less committed to the search because they may never receive a fee at all?

The fact is that organizations operating a blended model whereby some positions are filled through in-house resources and others through search firms track and compare the data between the two service providers. Every company I’ve discussed the topic with reports that the in-house functions consistently close a search faster than do search firms.

The Coca-Cola Company’s data shows that “internally executed searches were on average completed in approximately 2/3 time it took a search firm.” Another company, a $16B manufacturing entity, reports that their in-house team is 35% faster than the search firms they use. Nike no longer uses search firms for their top .5% positions. One of the reasons is that the in-house function closed their searches more regularly and more quickly than did search firms.

Shorter search cycle-time is precisely one of the reasons that many corporations choose to go in-house.