Specialism: The Fifth Wrong Reason
This is the fifth 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 to use search firms rather than set up an in-house function. He’s wrong on every one.
Aston indicates that “[m]ost line managers we meet say that they prefer working with search professionals who ‘get‘ what they do and what they need, rather than generalist HR colleagues who usually don’t.” He refers to the advantage that career search professionals have over HR generalists as “specialism” (yup, it’s a word; I checked).
Aston’s right in that hiring executives with a critical opening prefer to work with search subject matter experts rather than HR generalists. What he fails to recognize is that most in-house search professionals are not HR generalists, but rather have executive search firm backgrounds. Richard Pehlke, executive vice president and chief financial officer of Heidrick & Struggles (globally one of the largest retained firms) acknowledged the trend in the 2012 Q2 earnings call: “...we've seen some very high level partners go into client organizations of large scale.” Note that these are “very high level partners” --- i.e. professionals with executive search "specialism" that have gone in house and are now serving internal customers.
It’s also noteworthy that the industry analysts monitoring the executive search market recognize the that the trends towards bringing search in-house is negatively impacting the earning for large search firms like Heidrick & Struggles. One can only imagine that it’s also impacting the small firms like Aston’s BIE Group.
Aston also asserts that “[e]ven though they [line managers] are mandated to use the in-house team, they find ways to go around it and use a search firm instead. This blows a gaping hole in the original projected cost-savings.” That is all true for newer in-house functions, but at those companies with mature functions (Nike, Microsoft, and Pfizer for example), this is not the case. As in-house functions mature, their hiring executives begin to realize that their in-house team better “...get[s] what they do and what they need...” than do search firm consultants. Once that recognition is made, those hiring executives consistently turn--by choice--to the in-house function for their critical hiring needs.