Direct search

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The term direct search or, much more often in German usage, executive search (also direct search , direct approach ) stands for a specific service in the context of filling vacant management positions in companies. This service was developed at the beginning of the 20th century and has meanwhile established itself as a branch of its own. Executive search is used when looking for top executives who would normally not react to a job advertisement, as well as when looking for unusual specialists. Advertisement-supported search, on the other hand, is better suited for positions for which there are a large number of applicants (typically: university graduates for trainee programs). Due to the presence in the job advertisement sections of the newspapers , the advertisement-based personnel consultancies are usually much more present to the layman ; Most executive search companies do not advertise on the basis of a self-image that is similar to the professional thinking of lawyers and auditors .

method

A personnel consulting company is commissioned by its client , the searching company , to look for a candidate with a specific experience and industry profile. First of all, the client describes the profile. The researcher or executive search company now compiles a target company list, analyzes the target companies (called ident or mapping) in which potential candidates are suspected, speaks to them by telephone and roughly qualifies them. This part of the process is occasionally carried out by external service providers (executive research).

If they are suitable and interested, a personal conversation, the so-called interview , will take place with the candidate. The result of this interview is summarized in a "confidential report" (also: confidential report, personal paper, candidate letter). The suitable candidates are later presented to the client personally in the "presentation". After obtaining references , the candidate and potential employer come to an agreement and the candidate takes the position. As a rule, a complete search process takes three to four months for placement.

Executive search and ad-supported search

As a rule, the final fee is around a third of the candidate's annual income. For large international companies, the minimum fee is usually 40,000 euros and more.

  • "Retained Search"
An executive search is usually used on the basis of a fixed fee (so-called “retained search”, for the “ retainer ”, the fixed fee payment). The fee for this service is usually due in three to four (monthly) installments, which, at least for large international companies, are independent of the respective project progress . In the case of smaller companies, the consultant may undertake to invoice the rates at least depending on the occurrence of certain project milestones.
  • "Contingency Search"
Firms that operate purely on the basis of success are called “contigency firms” and are generally less well regarded in the market. Often they are of Anglo-Saxon origin and are active in the local market in filling highly paid specialist positions in banking and the IT industry. They also often send out candidates' résumés to potential clients without their knowledge.
  • "Selection"
A performance-based fee is also often agreed for ad-supported searches (mostly called “selection” in industry jargon). In addition, the advertising costs invoiced by the respective advertising media (print, online) are invoiced to the customer (often taking into account an “agency discount”).

history

The roots of executive search are all in North America. The oldest executive search company was Thorndike Deland Associates, founded in New York in 1926 , which had to cease operations in 2001, then operating under the name of "Thorndike Deland Executive Placement Bureau". After the First World War , there was a great shortage of suitable personalities for top positions in politics in North America . Deland had the idea not to let potential candidates react to a job advertisement, but to actively address them after researching them beforehand, and should therefore be regarded as an "inventor", at least as a pioneer of executive search.

The name “Executive Search” came about because in the early days of personnel consulting, companies were looking for “executives”, i.e. top management, using this method.

George A. Fry , who had been a partner in management consultancy Booz Allen Hamilton since the early 1930s , founded his own company, George Fry & Associates, in Chicago in 1942. This consulting company worked in the fields of marketing , corporate planning and personnel consulting and was later renamed Fry Consultants Inc. It was already active in the German market in 1952, later renamed itself in Germany to SUP Societät für Unternehmensplanung and still exists today (albeit in a very reduced scope). One of the founding partners of Fry in Germany was the not undisputed Maximilian Schubart , who sometimes used very unusual methods and made a name for himself (among other things, he published the book The Tabu of Salaries in 1964 ).

Another head of the Booz Allen team, Sidney Boyden , founded one of the most important executive search companies in 1946. Spencer Stuart founded his company in 1956 and was one of the first to have a presence in continental Europe. Egon Zehnder and Jürgen Mülder learned their trade there, who later founded their own companies and (in the case of Zehnder) expanded them to a serious international player.

In Switzerland, John P. Robertson was one of the first to set up an executive search company in 1951, when US companies invested heavily in Europe, which still exists today under the name Robertson Associates AG . He wrote foundational articles and books on executive search and, after he left Robertson Associates in 1982, on outplacement .

These companies have been present on the German market since the late 1960s. In addition, there are newly founded companies in the 1980s that mainly operate nationally, e.g. B. Delta Management Consultants (since 1991 a founding member of Amrop internationally active), Deininger Unternehmensberatung, Hofmann Consultants and many more, as well as prominent lone fighters such as Dieter Rickert , Heiner Thorborg or Berthold B. Trottnow as well as a large number of very small one-man Consulting company. Little is known that Roland Berger also offered this service until the division was discontinued in 2004, but did not advertise it very much.

Within the branch there are companies that are more or less a “school” and in turn have produced consultants who later developed their own company to great importance (e.g. Spencer Stuart for Jürgen Mülder or Egon Zehnder). In the late 1990s, there was a major consolidation process, which was also characterized by the prominent IPOs of the competitors for the world market leader position, Korn / Ferry and Heidrick & Struggles , both of which expanded in particular through takeovers of smaller companies (Carré / Orban was taken over by Korn / Ferry bought, Mülder & Partner 1998 from Heidrick).

Market today

International Players

The largest companies with international significance to date (double-digit number of branches, sales in the two- to three-digit million range) and presence in many economically important countries around the world are Korn / Ferry, Heidrick & Struggles, Odgers Berndtson , Spencer Stuart, Russell Reynolds , Boyden Global Executive Search and Egon Zehnder .

For companies in this group, it can make sense to choose between listed companies on the one hand (Korn / Ferry and Heidrick & Struggles), private partnerships (Russell Reynolds, Spencer Stuart and Egon Zehnder as non-listed but integrated global companies) and legally and economically independent national companies (so-called networks ), which use a common brand name internationally. "Search Consult" compiles an annual ranking of executive search companies. The largest global network of companies in the direct search industry based on the number of offices is AIMS International (as can be seen from the annual ranking of companies in the direct search industry, which "Search Consult" compiled in 2006). The largest network in terms of sales in the EMEA region is Egon Zehnder with $ 321 million (according to the last study by Kennedy Information carried out in 2008).

Until the 1980s, US-based strategy consultancies such as McKinsey and Booz Allen Hamilton as well as auditing firms (" Big Four "), namely Price Waterhouse , Coopers & Lybrand , Ernst & Young and KPMG Peat Marwick (with the branch that still exists today PEAT Executive Search AG in Switzerland ) offer these services, but have now completely withdrawn from this market.

National sizes

Companies that are very well positioned within a country or a certain region, but have no or only a very limited global presence. Similar to advertising agencies, such companies join an international network, but retain their legal and economic independence. Despite the externally standardized appearance, these are usually independent companies.

Since the international consulting companies always look after a large number of customers who are no longer available as a search field, smaller, nationally operating "boutique firms" use this opportunity and limit themselves to certain geographical and / or specialist sub-markets.

In addition, national providers often differentiate themselves through complementary executive search services. The basis of this differentiation is often the strategy of companies to better adapt management competencies to the requirements of the business model and to secure them through management audits (also called management assessment or leadership alignment) and coaching.

Differentiation from advertisement-supported personnel consultancies

Despite the high level of awareness of various consulting companies in Germany , which primarily comes from the multi-page job advertisements in the daily newspapers , their business is usually not comparable with the aforementioned companies in the "Big 5", since the core business is primarily the advertisement-supported search and mostly smaller positions are filled than with the international search firms. In particular, medium-sized companies that do not have their own HR department make use of the services of these consultancies, which are more likely to be described as "media agencies".

In addition, these companies usually do not have the specialist knowledge about the advertised position and insider knowledge about the client, which is important for an applicant on request, as they only act as a "mailbox", handle applicant correspondence and roughly preselect and forward incoming CVs and applications.

Professional associations

In Germany, many of the larger consulting firms that offer executive search were initiated around 20 years ago by Jürgen Mülder in the now defunct organization Vereinigung deutscher Executive-Search-Consulting , in AESC Germany , a national subgroup of the world association AESC ( Association of Executive Search Consultants ), organized and have submitted to certain professional guidelines, including an exclusive work on a fixed fee basis.

The branch representation for personnel consultants, who are also active in areas such as ad-supported search, is represented by the Bundesverband Deutscher Unternehmensberater BDU e. V. perceived.

criticism

In addition to the advantages of globally organized recruitment companies, there may be possible weaknesses qualitatively in the standardized approach as well as through the processing of many different consultants and quantitatively in the high number of mandates processed. This can affect the individuality of the client and their requirements as well as the individuality of the candidates, as well as the differentiation and comparability (correlation) of the knowledge gained in the results.

Legal and cultural problems

In Germany, there has often been legal uncertainty regarding executive search services in the past. According to the judgment (Az.:I ZR 221/01) of the first civil senate of the Federal Court of Justice responsible for competition law , initial contact with external employees by telephone at the workplace is generally permitted as part of free competition .

In Germany in particular, the supposed “poaching” of loyal and satisfied employees in the early days of executive search often had a dubious reputation. This recruiting method is now one of the accepted and established recruiting methods.

literature

Web links

See also