Reputation: The Fourth Wrong Reason

This is the fourth in a series of posts responding to James Aston’s article in askGrapevineHR about establishing an in-house executive search function. 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.

Last week I addressed the assumption that search firms execute faster than in-house functions. Another reason that many companies are choosing to establish in-house functions is to better manage their company’s brand.

Aston writes that “reputation” is one of the reasons to use search firms rather than build in-house functions. He asserts that candidate experience has an impact on a company’s reputation; I would whole heartedly agree. I also agree with his implication that recruiter search load affects quality of service.

However, Aston indicates that “an in-house recruiter might handle 20 or more search briefs...[while] a good head-hunter no more than six.”  The average search load for (retained) firm executive recruiters and in-house executive recruiters alike is 12 searches at a time. Aston’s quote of 20 searches for an in-house recruiter is more like that of a staff recruiter or a liaison who is managing search firms rather than executing the searches themselves.

Further, if an in-house recruiter becomes overburdened, they can, and do, tap alternative resources, both internal and external to the company. They might outsource the search altogether or partner with a firm willing to unbundle their services. A firm recruiter is much less likely to leverage additional resources (such as outsourced research) because it cuts in to their earnings-per-search. Additionally, very few third-party recruiters will turn away work because their plates are too full--they’re much more likely to become stretched too thin in order to maximize their income.

Aston indicates that “We often hear from candidates who’ve had negative experiences.”  Well....who hasn’t?  In-house recruiters often hear horror stories from candidates about their experiences with search firms. Unfortunately, there are poor recruiters on both sides of the desk.

However, an in-house recruiter cares much more about the company’ reputation (i.e. brand) than does a firm recruiter. The company brand affects in-house recruiters’ compensation (particularly if they have equity), as well as their ability to successfully recruit top talent in the future; they’re more motivated to provide a positive candidate experience than is a third-party recruiter.

Aston is correct to imply that once a company’s reputation is tarnished it’s difficult to recover. This is precisely one of the arguments for bringing executive search in house where the reputation can be more closely managed. In-house recruiters serve as excellent ambassadors for their company’s brand.