BEWARE: Most Common Malpractices in Executive Search

I have been in the Executive Search Practice for a good 45 years. I am very glad to say the industry has grown so much which has benefited Client Firms as well as Executive Candidates through the years.

In the Philippines, through The Executive Edge, Inc., I continue to derive a degree of satisfaction at the level of professionalism that has accompanied the growth of the industry.

Sadly, it is also a present-day reality that malpractices exist.

Ethics vs. Malpractices

As a matter of fact, I am witness to common malpractices that co-exist with Ethical practices. These malpractices are blatantly committed by so-called search firms without regard for Ethics. Unethical and sometimes predatory so-called search firms conduct their business as though executive search service were a commodity that could be had for any price, on-demand and proliferation of amateur players.

Malpractices have managed to give the industry a black eye. Two major stakeholders of Executive Search firms are the Client Firm & the Executive Talent.

Victims of Malpractices

Many a paying Client Firm or unwitting Executive Talent have been burned at one time or another by “pretender” search firms. Toward Client Firms, such unethical search firms grossly abbreviate the proper way of handling a senior search assignment. Or, unnecessarily exposed a confidential Executive profile leaving the Executive Talent with one very bad experience in dealing with search firms. It is not a wonder why corporate executives are wary of responding to invitations to meet from Executive Search Consultants. The truly discriminating may agree to release a resume to ethical search firms after much prodding. Rightfully so.

Why Malpractices Exist

Below I offer several reasons behind some of the most common malpractices in Executive Search:

A. The unethical search firm is not aware of Data Privacy Act; or more importantly, does not live this law in the conduct of business.

Thus, these firms are content with “Resume Bashing”. All this means is that a senior search assignment that is unfortunately farmed out by Client Firms to more than one search firm so that these firms do work simultaneously, the expedient and unethical search firm will swiftly and merely e-mail raw resumes of seemingly suitable persons. This is not value-adding service. The unethical or what I refer to as a “pretender” firm has not even contacted the persons involved to seek permission so their resumes may be released to a Client Firm. “Pretenders bash or flood” Client Firms with as many resumes; sometimes, even just the names of plausible candidates in order to get a foot in the door into the client org.

B. The unethical search firm has no science in its practice. It readily sacrifices process in the name of speed.

The expedient goal is to be first to “own a talent”. Even without any other assessment post resume submission, this malpractice assures the unethical firm it could be credited for “introducing” the talent to the Client Firm and in the event the same person is hired, be paid the “referral fee”. This absence of integrity is especially true today due to the poor practice of Client Firms to allow more than one search firm to work on one and the same senior vacancy. This malpractice removes the very essence of confidentiality and value for process.

C. The so-called search firm is not able to provide the Client Firm a track record of success by assigning consistently competent and seasoned Search Consultants.

There is one such “pretender firm” whose practice is to have the Head meet with Client firm’s principal contact in order to improve the probability of being given the mandate to search. But, actual conduct of what is supposed to be a comprehensive search process is passed on to a less experienced staff. This junior staff lacks the level of capability and steadfast professionalism to handle the sensitivities of senior search assignments. Without guidance or professional counsel of a Senior Partner, there is very little to prevent cutting corners just to deliver. Ultimately, both senior and junior staff are guilty of unprofessionalism.

D. The unethical search firm does not believe in Ethics and Integrity.

“Pretenders” have little regard for protecting Client Firms and Executive Talents. These firms find it common and easy to

recycle;
have no OFF-LIMITS policy.;
conduct search work with competitive companies without need for disclosure.

The malpractices that result may include:

Tapping the same executives they have successfully referred to a previous Client Firm and invite the same candidates to move to yet a different Client Firm;
Not giving any grace period to a Client Firm with which it has only recently worked. Instead of protecting the Client Firm by not taking anyone of its other executives, it just liberally raids the company showing disrespect for the Ethics of OFF LIMITS Policy;
Actively handling search assignments with Client Firms that are known to compete with one another. More often than not, when they make a pitch, so-called search firms do not have basic discipline to disclose to Client Firms on those companies which are their OFF LIMITS, i.e. they must not poach from companies which are their active clients.

E. Some Client Firms wittingly or unwittingly provide the type of engagements that encourage malpractice!

Executive Search was created way back in the late ‘70s so that external consultants could offer dedicated focus, time and attention to the serious process of hunting experienced professionals who are not otherwise looking.

Thus was born Retained and Exclusive Executive Search Firms that would collaborate with its Client Firms with total loyalty and professionalism. Ethical search firms do not handle client companies that directly compete with one another. They do not “recycle” candidates to make money, i.e. invite the same executive they successfully endorsed to client A and actively refer to client B in order to fill up a similar requirement. In fact, ethical firms do not directly tap an executive they successfully endorsed to a client whilst said executive is gainfully employed with the same client firm and happy in his employment.

At present, Success-based or Contingency model has emerged as commonplace model opposed to Retained and Exclusive model. Client Firms say they do not wish to pay up-front fees, thus, Contingency business has become the popular or even preferred model from junior manager recruiting all the way to senior-level executive appointments.

Unfortunately, this scenario:

🞪 - no financial investment on the part of Client Firms;

🞪 - no assurance for “Pretender” search firms to be able to bill and collect fee

= “Pretender” firms commit malpractices to create some business in any way possible

I admit the fact that Executive Search Business has one of the lowest barriers to new entrants, so many more Tom, Dick & Harry have instead become “head-hunters” overnight. Some by merely having access to the internet, LinkedIn, etc. are suddenly experts. It is also true that long-time owners/ senior partners of so-called search firms recruit fresh college graduates to make but “instant Search consultants” after one or two years on-the-job. The same unethical firms hardly formally train their staff, by the way.

Because Client Firms agree – if not, demand – to receive resumes from 3, 4 or even 5 firms “in a few days”, it will work with any of these “Pretenders” which can be had for lower fees. Little work, low fee. The malpractice cycle continues.

It is as though pitting one against so many others in the name of speed improves the quality of filling up sensitive management-level requirements. Actually. the Client ends up having to play referee as to which among the simultaneous contingency firms they used was the first one to refer the hired candidate! More often than not, a “pretender firm” just settles for whatever professional fee negotiated by the client since both parties are aware all the “pretender firm” did was shoot off the candidate’s resume to the client.

For authentic executive search assignments, Client Firms are well-advised to exclusively work with one firm and both parties could negotiate on terms and conditions as well as timelines. If a Client Firm is by company policy disallowed to work with a Retained & Exclusive model, its Contingency Search firm partner must be held to ethical practices, at least be given limited exclusivity to be able to conduct its proven and time-tested search methods and earn its keep.

Executive Search & Code of Ethics

Bonafide Executive Search Firms operate by and uphold Code of Ethics. Definitely, these two go together.

I dare say the Code of Ethics is at the core of my long practice as Executive Search Consultant.

I use the word once more in this article – SADLY – there are individuals/businessmen who have spent as long as I in this business. Yet, some of them have not been earnest, dedicated and consistent in living the Code of Ethics. On the contrary, I refer to those who find it not an issue to commit malpractices or for their team to do so.

True these persons have probably and oftentimes laughed their way to the bank with each expedient successful placement. No matter that they circumvent the Code of Ethics, they continue to be very much around and very much in business. More worrisome for the industry is the fact that these are the same persons who do not seem to be bothered by not doing the right thing for as long as they make money.

I believe their reasoning would always be relative i.e. that they are merely being “pragmatic business people” who seize opportunities as they arise; billing and collecting without need for tedious work or long processes; who do what they do “because the Client Firm said so”.

I take comfort in the truth that professional Executive Search has been my advocacy. I live by the Code of Ethics. No matter that some people have been known to say of the Code and I quote, is “too rigid”. For those who always tread the grey line, I suppose the Code of Ethics is going to be tough to live by, anyway.

Yet, it so rings true that for every hard-earned form of living, there is a price to pay be it hard work, long hours or even a bad back. Equally so, there is a priceless prize to behold in upholding integrity and ethics.

Executive Search: The professional and ethical way

It is at this point that I wish to define Executive Search. I define it as that external professional service I offer to Client firms which are in need of employment services for senior to top-level executives across various functions in a business organization and diverse industries.

To get the business partnership started, Client Firms will expect me to lay down the search strategy by which I could generate a qualified short-list of 3 executive candidates. Once this shortlist has been delivered to the Client Firm, and after a deliberate set of activities, the Firm could seriously consider the most suitable person from the shortlist for hiring and appointment to a very sensitive internal executive vacancy.

Client Firms are aware my task involves a focused and dedicated plan of action that basically requires time, experience and investment. Once again, because of the seniority of the level it caters to, authentic Executive Search requires all these foregoing ingredients to be present to attain proper science in the search process.

Client Firms realize ours would then be a serious partnership that will likewise require trust and collaboration.

Client Firms are fully aware it takes a seasoned Search Consultant to discreetly approach senior to top-level corporate professionals, get to know and interview them and even propose to these executives to explore a position with a different organization.

Client Firms are aware the ones who are not looking are usually the best talents. Thus, by Executive Search or honest-to-goodness headhunting is meant use of time-tested processes involved in hunting without anyone else knowing about the Search except the Principals/ ultimate decision-makers and the Search Partner to whom the Search has been formally and exclusively awarded.

The Code of Ethics becomes the only way by which I am able to successfully partner with the hiring company and for Client Firms to appreciate the reasons why the Ethical Search Firm:

Requires a meeting at the first instance to comprehensively discuss the need, reasons for hiring and the profile of the most suitable senior executive
Submits to the Client Firm a summary document about its understanding of the requirement at the same time that it requests of any available Job Description on file
Requires Time – 3 to 4 weeks – to conduct Research of Talents in the market, contacting same talents, inviting talents to meet with the Ethical Search firm – all these intense, dedicated and focused activities in order to develop and submit to the Client Firm the formal shortlist of 3 to 4 suitably qualified candidates

The Ethical Executive Search Consultant does not and must not abbreviate this process if it means doing the right thing.

Ethical Search Firms can shorten processes

I submit on occasion there is a Client Firm that would nevertheless make serious appeal to cut down the processing time in order to meet its critical on-boarding deadline. If and when I do so, it is in the name of being agile, customer-sensitive but certainly does not mean abbreviating my proven and tested process. On a case-to-case basis, it means devising timelines that could include working longer hours, doing overtime, press harder to meet prospective executive talents. This step is normally a bit of a challenge given that gainfully employed executives are understandably busy with their own commitments i.e. not as readily available to meet. Most importantly, I need to actively involve and collaborate with my Client Firm every step of the way. I need to be an active Business Partner to my Client Firm Partner!

Removing days or even but one week from the process will not ever mean no longer meeting executive talents for in-depth interviews. As I stated earlier in this article, doing away with meeting/ interviewing an executive candidate is a common malpractice. I actually know of so-called search consultants who do not even know how their executive talent looks like because they never met. This, in a service that is highly collaborative, deliberate and demanding personal commitment.

To all Client Firms and Executive Talents, I say yes, beware of malpractices especially those so commonly committed, unethical firms make them appear business as usual. I cannot overemphasize the need for all of us to Be Aware of basic reasons why malpractices exist.