Role of Executive Search Firms in Corporate Hiring

Summer Internship
Role of Executive Search Firms in Corporate HiringRole of Executive Search Firms in Corporate Hiring
Prepared byPrepared by
Ms. Iyer Radhika MurthyMs. Iyer Radhika Murthy
Masters in Management Studies (Semester II)Masters in Management Studies (Semester II)
Roll Number 11Roll Number 11
(In Partial fulfillment of the course curriculum of MMS, Mumbai University)(In Partial fulfillment of the course curriculum of MMS, Mumbai University)
Guided byGuided by
 Mr. Srinivas Nanduri (Director, India and Middle East Operations, MaximaMr. Srinivas Nanduri (Director, India and Middle East Operations, Maxima
Global Executive Search)Global Executive Search)
 Mrs. Gowri V Joshi (Core Faculty, Human Resources, SIESCOMS)Mrs. Gowri V Joshi (Core Faculty, Human Resources, SIESCOMS)
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DECLARATIONDECLARATION
I hereby declare that this report titled “Role of ExecutiveI hereby declare that this report titled “Role of Executive
Search Firms in Corporate Hiring” is a record ofSearch Firms in Corporate Hiring” is a record of
independent research work carried out by me as part ofindependent research work carried out by me as part of
project training during the period May 2005 – June 2005project training during the period May 2005 – June 2005
under the Supervision and Guidance of:under the Supervision and Guidance of:
Name of Guide: Mr. Srinivas NanduriName of Guide: Mr. Srinivas Nanduri
Designation: Director, India and Middle East OperationsDesignation: Director, India and Middle East Operations
Organization: Maxima Global Executive Search, Bangalore.Organization: Maxima Global Executive Search, Bangalore.
Name of Guide: Mrs. Gowri V JoshiName of Guide: Mrs. Gowri V Joshi
Designation: Core Faculty, Human ResourcesDesignation: Core Faculty, Human Resources
Organization: SIESCOMS, Nerul, Navi Mumbai.Organization: SIESCOMS, Nerul, Navi Mumbai.
All the inferences quoted are completely based on thisAll the inferences quoted are completely based on this
study.study.
Date ___________Date ___________
Signature ______________Signature ______________
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CERTIFICATECERTIFICATE
This is to certify that the project titled “Role of ExecutiveThis is to certify that the project titled “Role of Executive
Search Firms in Corporate Hiring” is a bonafide workSearch Firms in Corporate Hiring” is a bonafide work
done by Miss. Iyer Radhika Murthy of SIES College ofdone by Miss. Iyer Radhika Murthy of SIES College of
Management Studies, Nerul (East), Navi Mumbai of FirstManagement Studies, Nerul (East), Navi Mumbai of First
Year MMS, Semester II (Summer Internship) underYear MMS, Semester II (Summer Internship) under
guidance and supervision during the period May 2005 –guidance and supervision during the period May 2005 –
June 2005.June 2005.
Signature of Internal Guide (Maxima) & Date - __________Signature of Internal Guide (Maxima) & Date - __________
Signature of Faculty Guide& Date -Signature of Faculty Guide& Date - ____________________
Signature of the Director of SIESCOMS & Date -Signature of the Director of SIESCOMS & Date - ____________________
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PrefacePreface
Business has become a roller coaster ride due to intense competition, both domestic and foreign,
induced by rapid internationalization and globalization. Hence, there is a growing need for the
development of an efficient managerial pool to meet the challenges of this extremely
competitive industrial scenario at all levels in the organizations, right from the Junior Level to
Senior Management Level. Also, there is no dearth of talent world over for companies to source
for their requirements.
However, it is very difficult for organizations to engage in all the sourcing activities by
themselves because it is a time consuming process, while every moment is precious for them to
compete and survive on their core activity or business in such a scenario.
Hence, this activity of finding the right fit for the organizational requirements at least till the pre
– screening and screening rounds of the selection are being handed over to the specialists who
perform these activities for companies for some consideration. These specialized agencies are
Executive Search Firms or as they are known in common parlance, Placement / Recruitment
Agencies.
A Wise Man once said, “Most resources are available to all companies. The great variable is the
quality of their management as it determines why some companies fail and others succeed”.
This great person was Mr. Sydney Boyden, who later in the year 1946 founded Boyden
Associates, and a Retained Executive Search Industry in New York.
The Global Executive Search Firm Industry of about US$ 40 Billion comprises of Recruitment
Agencies (60%), Job Boards and Websites, Contingency and Retained Executive Search Firms,
etc. It is a highly fragmented industry with over 5000 firms in each of the categories stated
before.
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Also, there is tremendous growth potential for this industry especially in the Banking &
Finance, Technology, and Pharmaceutical Industries due to continuous technological
improvements and advancements as well as changing Patents regime in the years to come.
This project is an attempt to understand “The Role of such firms in Corporate Hiring”, “The
Challenges in store for them” and “The Way Forward” keeping in view the business of
executive search firms with respect to who they are? How do they function? Are they same as
consultants? When to use them? What proportion of corporate placement at the top level is done
through these firms? How does the same vary across the different sectors and why? What are the
value addition Search firms provide?
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AcknowledgementsAcknowledgements
The author wishes to express her sincere gratitude to the following people, without the support
of whom, this project would not have been possible:
1. Mr. V. S. Kumar of Greenstar Consultants, for bringing the author, the prospect of
performing this very extensive and interesting project.
2. Mr. Srinivas Nanduri, Director Operations for Middle East and India, Maxima Global
Executive Search Limited, and Industry Guide, for giving the author the opportunity to
do this project and supported the author in any possible manner for all her information
requirements with respect to the company and its operations.
3. Ms. Vindhya from Maxima Global Executive Search Limited, for her timely
correspondence and help with respect to the company’s expectation from the project and
the methodology to be followed.
4. Professor Gowri Joshi, Internal / Faculty Guide from SIES College of Management
Studies, Nerul, for her timely guidance, active support and assistance for completing this
project successfully.
5. Ms. Shirin Ara, Executive – Abyss and Horizon Consultants, for providing an industry
insight and practical procedures for corporate hiring.
And Last but not the Least, all the people who prefer anonymity but without the cooperation
of whom, this project would not have taken shape.
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Thank You Very Much!!
Project MethodologyProject Methodology
The research was carried out in a two – fold manner; i.e. Secondary research and Primary
research. In course of Secondary Research, details were collected regarding Recruitment as a
process, Recruitment Industry as on the year 2004 and expected growth areas, Models used by
various agencies, Role of Executive Search firms in corporate Hiring, etc.
Following the Secondary Research, Primary research was undertaken in some leading executive
search firms and corporates about recruitment intermediaries they do business with, the
proportion of recruitment conducted through these firms annually across different levels of
management, their selection methods, etc. and perceived role of recruitment intermediaries.
The details of Primary Research are as follows:
Sample Size: a) 15 clients of Executive Search and Placement Firms in Mumbai
b) 15 employees from five Executive Search Firms in Mumbai.
Sampling Method: Convenience Sampling
The study is an attempt to understand the role played by executive search firms in securing the
best talent for the Top and Middle management positions for their clients in Mumbai. The study
also attempts to understand the highly specialized tools Executive Search firms deploy in the
process of Search, assessment on Personality, Emotional Intelligence, Integrity and Behavioral
traits of professionals prior to the final selection.
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Executive SummaryExecutive Summary
• Introduction:
The project as the title suggests deals with Executive Search Firms – a specialised branch or
type of Recruitment Consultancies. But, before looking into this topic in detail, the author
wishes to elicit some background information about recruitment, the need for recruitment in
corporates, the various sources of recruitment, the process of recruitment, and explain the
present scenario as an introduction.
• Recruitment Consultancies – An Insight:
This topic provides us with an insight into what exactly are recruitment consultancies and
the need for such firms, what are the various types of such consultancies globally, what are
the various services they offer to their clientele, what is their margins in providing their
services and a few successful firms in Mumbai as examples.
• Industry Watch:
The author puts forth the industry statistics as on the year ending 2004, and states the major
industries that could provide a boost to this industry in the coming years. Also, the author
provides information about the nature of the industry and way it functions in this topic.
• Executive Search Firms – An Insight:
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In this topic, the author explains Executive Search Firms in terms of the meaning, the need
for these, the objectives of their existence, the functions that they perform, the services that
they offer and the major players in and around Mumbai.
• Challenges posed in the Future:
In this topic, the author elaborates on the various challenges that stare in the face of
executive search firms in the current scenario and aims to find tangible and viable solutions
for these institutions.
• Changing Role of Executive Search Firms:
Taking cue from the previous topic, the author tries to identify the way ahead and states the
changing role of executive search firms in the current industrial scenario.
• Live Example: Maxima Global Executive Search, Bangalore:
In this topic, the author studies Maxima Global Executive Search – Bangalore as her live
example, in detail. The information about the company, the policies they have adopted and
methodology they follow has been mentioned and analyzed to understand if there is any
room for improvement.
• Research Findings, Analysis & Way Ahead:
In this topic, the author analyzes her research findings and provides a few recommendations
to Executive Search Firms on a whole (with reference to Maxima Global Executive Search).
• Conclusion:
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In this topic,the author concludes the report with an ending note as Conclusion.
ContentsContents
Sr. No. Topic Page No.
01 Introduction 11
02 Recruitment Consultants – An Insight 22
03 Industry Watch 28
04 Executive Search Firms – An Insight 32
05 Challenges posed in Future. 39
06 Changing Role of Executive Search Firms 41
07 Live Example: Maxima Global Executive Search 43
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08 Research Findings, Analysis & Way Ahead 53
09 Conclusion 59
10 Bibliography & References. 60
Annexures 63 - 77
IntroductionIntroduction
Organizations carry out various business activities and have certain core and certain other
support functions. Often, among the support functions are IT and HR. IT or Information
Technology provides the organization with the necessary technology upgrades and most
important – Information – which these days is vital for business success, while HR or Human
Resources deals with the Human Aspect of Business – right from identifying jobs in the
organization, choosing the right people for the right job, ensuring the right salary package for
the job, creating a conducive work environment, providing the training, monitor and review the
performance of employees, etc.
In this project, the author deals with Recruitment as a specific function of HR and the Role of
Executive Search Firms – a Specialised branch of Third Party Recruitment Consultants (a
Source of recruitment to the organizations) – in Corporate Hiring. Before coming to the actual
topic under consideration, it is important that we know what is recruitment, what are the various
available sources of recruitment to organizations, why is recruitment important, and how is it
carried on i.e. the process of recruitment.
• Recruitment:
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Yoder defines Recruitment as “It is a process to discover the sources of manpower to meet the
requirements of the staffing schedule and to employ effective staffing measures for attracting
that manpower in adequate numbers to facilitate effective selection of efficient workforce”. It
refers to the discovering of potential applicants for the actual or anticipated organizational
vacanciesand is often regarded as that vital link that brings together those with jobs and those
seeking jobs.
Put very simply, “Recruitment is the process of identifying that the organization needs to
employ someone up to the point at which application forms for the post have arrived at the
organization”.
• Recruiting Yield Pyramid:
The importance of recruitment by an organization and the reason why it is increasingly being
outsourced can be illustrated by analyzing the Recruiting Yield Pyramid, which is the historical
arithmetic relationships between recruitment leads and invitees, between invitees and
interviews, between interviews and offers made and between offers made and offers accepted.
The pyramid is shown below that illustrates the complex manner in which screening is done, the
ratio of eliminations from the first pool and therefore the time and effort that needs to be
invested in this process. The general ratios are as shown below:
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• Sources of Recruitment:
Recruiting individuals to fill particular posts within a business can be done either internally by
recruitment within the firm, or externally by recruiting people from outside.
• Internal Sources of Recruitment is usually people from the existing staff members of
the organization or their personal references.
• External Sources of Recruitment refers to the pool of candidates eligible for a given
post from outside the organization through various ways such as assistance from
recruitment consultants, by way of walk – in candidates, etc.
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H
i
r
e
Offers
Candidates Interviewed
Candidates Invited
Leads Generated
1:1
3:2
4:3
2:1
6:1

Sources of Recruitment
Internal Sources External Sources
Employee Referrals
Promotions
Transfers
Succession Planning
Rehiring ex – Employees
Job Postings within the organization
Advertising & Publicity
Employment Agencies
Public / Non Profit Agencies
Temporary & Alternate Staffing
Private Agencies
Executive Recruiters
Walk - ins
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The Various Sources of Recruitment, both internal as well as external can be understood by the
chart shown below:
The advantages of internal recruitment are that:
1. Considerable savings can be made. Individuals with inside knowledge of how a business
operates will need shorter periods of training and time for 'fitting in'.
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2. The organization is unlikely to be greatly 'disrupted' by someone who is used to working
with others in the organization.
3. Internal promotion acts as an incentive to all staff to work harder within the organization.
4. The risk attached to employing an outsider who may only be a success 'on paper' is
minimized.
The disadvantages of recruiting from within are that:
1. Replacing a person promoted or transferred would entail considerable time, cost and effort if
succession planning is not effectively carried out.
2. An insider may be less likely to make the essential criticisms required to get the company
working more effectively than an impartial third party or a new recruit.
3. Inflow of fresh ideas could be stifled.
4. Promotion of one person in a company may upset someone else.
The advantages of External recruitment are that:
1. It makes it possible to draw upon a wider range of talent, and
2. Provides the opportunity to bring new experience and ideas in to the business.
The disadvantages of recruiting from external sources are that:
2. It is more costly, and
3. The company may end up with someone who proves to be less effective in practice than
they did on paper and in the interview situation.
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Normally, companies prefer to follow the method shown in the next page for choosing their
sources of recruitment:
This is known as the Hunting Pyramid used mostly by Japanese Organizations for selecting
their Sources of Recruitment. The process of selection of source steadily rises along the pyramid
starting at the base due to various cost and other considerations such as the post for which
recruitment is to be undertaken, the job profile, the responsibilities there on, etc. This is because
the more complex the job requirements, the more stringent the selection process needs to be and
the more the number of stages in the recruitment process.
As the stages increase, professional assistance is sought after. Most Indian Firms also use this
method.
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External
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Internal
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• Types of Recruiters:
Once one understands how companies select their sources of recruitment, it is imperative to
understand the various types of recruiters. These are explained as follows:
1. Corporate Recruiters – These are in house recruiters often in the line management doing
all routine activities in the recruitment function.
They are often employees of the organization and may be assigned to search for all the
openings or specific areas of responsibilities such as technical personnel such as IT,
clerical staff, etc. They perform all the functions of a third party recruiter and also carry
out the role of the interviewer in the post – screening process of recruitment and
selection.
2. Contingent Recruiters – These include the temporary staffing consultants and alternate
staffing service providers, who provide the required services in event of an occurrence of
any contingency. They work on assignments without retainer fees and receive their fees
or payment only if a candidate they present to the employer is subsequently hired. They
generally work in the middle management level in the hierarchy as also for professional
and technical range of skills.
3. Retained Recruiters – These are Recruitment Consultants or Executive Search Firms
that have a contract or an exclusive agreement with the employers in which, they receive
their fees in advance or at the beginning of a search assignment and continue to submit
eligible candidates until and unless the position is filled or the employer calls off the
search. They are usually used for senior level positions.
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While each of these have a defined and specific role to play in effective hiring for corporates, it
is noteworthy that most companies still do not respect internal recruiters. The reasons for the
same are explained as follows.
• Why companies do not respect Internal Recruiters?
Around the world, a frequent complaint heard from corporate recruiters is that they fail to get
the respect they feel they deserve from line managers. Almost without exception, they wonder
out loud why managers don't return their calls, read the resumes they submit, or find time to
conduct interviews they set up.
This lack of respect is not based on perception alone. On one hand, while managers feel
recruiting is important, they typically rank their organization's recruiting performance poorly.
The answer is actually quite simple.
If one looks at recruiting functions — and recruiters in particular — through the same lens that
managers assess non-HR programs, one sees that recruiters routinely operate outside the
constraints and conventions that guide other business projects. The isolated dominion that
recruiting and HR in general has created for itself is often devoid of metrics, rewards for
performance, and accountability. Its continued existence sends a message that recruiting cannot
exist in the same competitive business climate that line managers must operate in daily.
In short, it demonstrates clearly that recruiting is not a profession of equals, but rather a
profession of ineffectual social workers.
• Factors That Cost Corporate Recruiters Stature and Respect
The following factors that cost Corporate Recruiters Stature and Respect as against External
Executive Search Firms are as follows:
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 Failure to demonstrate ROI – This is one of the major problems of recruiters
that they cannot demonstrate the ROI by undertaking recruitment as an ongoing process.
Without measuring the revenue impact of hiring top people (versus hiring average people),
there's no way to calculate the ROI of recruiting.
 Unknown Payback Period – Unfortunately, a majority of recruiting functions
never even attempt this calculation. This may be because of the point stated earlier that
there are no set parameters that can be used to measure the payback period of recruitment.
By refusing to calculate an investment's payback period, recruiters demonstrate contempt
for standard business conventions.
 Poor Customer Service – Recruiters often fail to communicate effectively with
their customers, neglecting to inform candidates and having managers wonder what
exactly to expect from the recruiting process and on what timeline is a regular feature.
Using any customer service measurement criteria, the way recruiters treat candidates is
disappointing. Since few firms track candidate satisfaction, recruiting never really knows
how dissatisfied candidates are or the impact of that dissatisfaction on the recruiting power
of the organization. This needs to be rectified else, the present system may soon be extinct.
 Lack of Pay for Performance - Corporate Recruiters often have none of their
pay at risk. Also, they have a fixed budget as against targets to be met with slight
constraints on resources. This may lead to creating a lackadaisical attitude which portrays
a very tarnished image of the recruiters to their peers and colleagues of other functions
within the same organizations.
 Competitive Advantage??? – While some recruiting departments do some basic
benchmarking only a handful of them ever do a side-by-side competitive analysis. This
leads the other managers to think the recruiters do not have anything to do at all while they
slog to keep up with benchmarks.
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 Six Sigma Quality Standards??? – Less than a handful of recruiting
departments have undergone Six Sigma assessments, and very few quantify the quality of
their hires. By exempting themselves, recruiting departments damage their image among
managers who must demonstrate quality everyday, which is nothing less than suicidal.
 Lack of Fee for Service - Managers are accustomed to getting what they pay for.
Because managers are often not required to pay for internal services, they have no basis to
evaluate the value they are receiving form corporate recruiters. Also, due to the negative
image visualized by the other functions, corporate / internal recruiters are often underpaid
than what they deserve.
E.G. A junior HR executive in the corporate recruitment section of the Administration
department (that acts as a substitute of HR department in most Indian Firms) earns about Rs.
6,500/- while an HR Manager would be earning around Rs. 10,000 at the most.
 Branding – Most corporate recruiting departments fundamentally ignore the
importance of branding. It is a known fact that “What appears to the notice of every eye
alone Sells.” This quotation applies to all facets of business including Recruitment.
 Professionalism - There are no books on the theory of recruiting and there is no
standard body of knowledge that is recognized within the recruiting profession. Until
recruiting becomes more professional, it will not reach the standard of acceptance that
finance and other functions of business have.
 Productivity - Few recruiting departments even measure their productivity, let
alone report it executives. It's time for recruiting managers to demonstrate a significant
percentage improvement in productivity each and every year.
Incidentally, external executive search professionals are in direct contrast, and are generally held
in high regard by line managers because they operate under a specific Brand Name, and a
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“Competitive Pay – for -Performance” model. Since the services of external recruiters are
based on this model, their performance can be closely monitored, productivity measured and
professionalism displayed.
• The Recruitment Process:
The following diagram shows the recruitment process that any company uses and the stages
involved:
Once the consultants send candidates whom they deem fit for the vacancy at the
client’s end, further selection takes place at the corporate level.
• The present scenario:
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This is where Recruitment
Consultants/Executive
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Today, with the ever – increasing competition, finding the right person for the right job,
i.e. the right inductments for attracting and hiring employees is becoming extremely
difficult, time and effort consuming and more so when the jobs are at higher positions.
Also, with hardly 20% of the entire population being extremely sought after for the top
jobs, there exists a problem of job – hopping, and retention is one of the main jobs of an
HR manager in corporates. With these reponsibilities on hand, it becomes extremely
difficult for the HR department to concentrate on all activities right from scratch.
Therefore, with the emergence of specialists in the field of recruitment, Companies have
started relying on Recruitment consultants for finding the required type of applicants for
a given position and undertake only the advanced screening rounds for selection as the
candidates are already pre-screened.
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Recruitment Consultancies – An InsightRecruitment Consultancies – An Insight
Recruitment Consultancies are professional third party consultants who perform the recruitment
and pre – screening activities for multiple clients – both corporate and job seekers – for a
consideration. They act as intermediaries between the clients and those seeking jobs for which,
they also get some percentage of the salary offered by the company as commission from both
parties if and only if one of their candidates are selected.
There are four broad catagories under which, recruitment consultants can be classified. They are
explained as follows:
 Public / Non – Profit Agencies: These are agencies run by the state – run or central
government aided employment agencies also known as employment exchanges in
common parlance. Generally, these agencies provide a mix of blue – collared and white
– collared jobs especially in the Government owned industries to those people who are
registered with the exchange. However, with private employment becoming more
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attarctive with fast growth and higher pay packages, increasingly, people prefer
employment in the private sector as a result of which, very few uninterested or unskilled
workers pick up the jobs offered by these agencies.
 Private Agencies: These are important sources of clerical, white – collared and
managerial personnel for a fixed fee per employee placed. The amount of fees charged
by the agencies are generally determined by market conditions and comptition. The
demand for such assistance is on the rise for a variety of reasons such as immediate and
urgent need to fill in a vacancy, reduce the time and effort spent to be put to some other
productive purposes, lack of an in – house HR department to handle such functions, etc.
These can further be classified according to the scale of their operations such as Small,
Medium and Large enterprises.
E.G. Decon Manpower Consultants operating in Mumbai is a small enterprise with about 6
staff members, Abyss & Horizon Consultants is a medium enterprise while Ma Foi and
Zenith Global are examples of large scale players.
 Temporary & Alternate Staffing Agencies: Temporary Staffing has become the order
of the day at all levels of companies. The trend started with hiring contingent labour for
menial jobs and today, has acquired importance across levels in the organizational
hierarchy including the top management in the form of ‘Interim Managers’. The
agencies that help companies procure such contingent help are known as Temp Staffing
and Alternative Staffing Agencies. They provide alternative staff in event of
replacements required created by contingent events such as retirement, sudden transfers
of staff, maternity leave in event of female employees, etc.
 Executive Search firms: These provide a vital linkage between great organizations and
executives, and become an integral part of the industry. These search firms provide
solutions and professionals to Corporates by deploying the search process to ensure that
they select the right candidates who fit properly with client’s culture and needs.
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By utilizing various recruitment and assessment models, the search firms source the best
talent and help the organization realize their business objectives by having the right team
in place. E.G. Maxima Global Executive Search (Bangalore), Impact Management
Services (Mumbai). Globally, several companies are extensively using the services of
Executive Search and Selection firms/Headhunters in order to resolve the recruitment
issues.
Further, the various types of Recruitment Consultants in India and their areas of operations as
observed by the author are as follows:
 INTERNATIONAL CONSULTANTS: They have recently started entering India in a big
way. Normally they focus their activities only at very senior levels (CEO / VP / GM). Their
clients include prestigious MNC Organizations (already in India or planning to enter India in
the near future). Their base is mainly in major metros (Delhi, Mumbai etc.). Most such
consultants do not maintain a Resume database but operate through headhunting i.e. they
identify suitable candidates through research and approach these candidates directly. E.G.
Maxima Global Executive Search (Bangalore), R. M. Associates (Hyderabad), etc.
 LARGE INDIAN RECRUITING FIRMS: Generally they focus on Senior/Mid level
assignments. Their clients may be spread all over the country (and perhaps overseas too!).
Some of them do have tie-ups with MNC Recruitment Consultants but the operations are
generally carried out by the Indian partners. These Recruitment Consultants do operate from
their database, which they keep updating periodically.
These Recruitment Consultants do assignments across most functions. But, it makes sense to
register your CV with such consultants who specialize in your area of specialization. (Of late,
quite a few such Recruitment Consultancy firms have been promoted by individuals with
extremely professional qualifications).
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 SPECIALISED RECRUITMENT FIRMS: A number of Recruitment Consultants have
started specializing in certain core functions e.g. Software, Banking, Engineering, and
Advertising, Sales, Pharmacy, etc. If any candidate has a specialization in such fields, he / she
could register one’s CV with these consultants.
 DIVISIONS OF MANAGEMENT CONSULTANCIES/AUDIT FIRMS: Several
management consultancies / audit firms have separate divisions handling recruitments. This is
because of their connections with and knowledge of their clients.
 OVERSEAS RECRUITERS: They mainly specialize in recruitment for Middle East / Africa.
Some of them have graduated from "supplying" labor class workers to recruiting personnel /
engineers at junior to mid levels e.g. civil engineers, computer / EDP professionals etc.
Generally, for Middle East positions, these consultants do charge candidates since (more-
often- than- not) they do not receive any remuneration from their clients.
One should definitely verify the pedigree of such recruiters before committing one's funds /
documents (passports) to them.
 SMALL-RECRUITMENT FIRMS: These have started mushrooming in every nook and
corner of every city in India. They could be one-man outfits (or employing 2-8 persons). The
recruitment is done at junior levels e.g. secretaries, clerks, salesmen etc.) and at local (intra-
city) levels.
 INDIVIDUAL PROFESSIONALS: Several professionals (mostly retired persons) who have
contacts with their ex-employers or through their professional networking engage in
recruitment activities. Generally, these are one-man shows and they do few placements
annually although some of these placements may be at Senior / Middle levels. Their
recruitment focus is generally very narrow and industry-specific.
• Need for Recruitment Consultancies:
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There are many reasons as to why organizations and candidates turn to recruitment
consultancies. Some of them are explained as follows with respect to first the Clients
(Corporates) and then with respect to the Candidates (the Job Seekers).
• Reasons for Corporates to turn to Recruitment Consultancies:
1. The firms’ do not have a separate HR department.
2. The firm is not geared to doing recruitment and selection on its own.
3. Past experiences in this field of recruitment have not been pleasant and hence, the
company does not want to waste precious resources in a lost battle.
4. The firm is keen on focusing on its core competence and since recruitment is not
its forum, it believes in outsourcing the process.
5. A particular opening has suddenly raised that needs immediate placement.
6. The firm wishes to hire high end professionals, already employed in competing
firms, who would be more comfortable in dealing with agencies than the firms
directly.
7. The companies do not wish to expend the time and effort required to conduct the
recruitment process on their own.
• Reasons for Candidates to turn to Recruitment Consultancies:
1. Easier access to many openings in a variety of companies.
2. Wide options to choose from in event of being selected for more than one
opening.
3. Going through Recruitment Consultants helps in maintaining the confidentiality
of the candidate's application.
• What do Recruitment Consultancies do?
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In this section, the author emphasizes on the services that recruitment consultancies provide to
their clients and candidates and they role that they ply in corporate hiring at present as one
knows it.
Recruitment consultancies provide the following services to the candidates due to which, they
are rightly said to be the mot preferred source of seeking jobs to the unemployed or job –
hoppers in India:
 They provide a wide array of job options with respect to the candidate’s academic
qualifications and personality traits.
 They provide career counseling services to candidates.
 They ensure the confidentiality of the candidate’s personal and professional profile.
 They ensure that the procedure of job hunting is made easy by providing specific
openings along with the time and location of the client (employer) and possibly even
train the candidates for some of the requisite skills for the job prior to the screening
rounds at the organizations.
 They also are responsible for ensuring timely communication to both parties and
confirmation to the candidate in event of his / her selection.
Recruitment Consultancies provide corporates with the following services, due to which the
corporates increasingly prefer to approach them for their staffing issues:
 'Ready-to-work' workforce against time schedule.
 Mass recruitment & project implementation at multiple locations
 Multi-pronged approach to access resource pool
 Flexibility for clients.
 Addresses headcount limitations squarely.
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 Time and cost of selection reduced.
 Faster mobilization and demobilization of resources.
 Eliminates expensive contractual procedures.
 Cost savings on account of payment for days worked instead of fixed salary.
 Statutory obligations no longer client's responsibility.
 Strong existing database of candidates
 Temporary to Permanent employees available as & when required by the clients.
• Margins:
Every business operates on margins. So do Recruitment Consultancies. Generally, most
consultants charge about 20% to 50% of the salaries of the candidates placed as their fees.
However, this rate is market – driven. There is more about the industry in the past years, with
estimation of growth and the trends in the years to come in this industry in the next topic.
Industry WatchIndustry Watch
While one talks about any business, it is very important that the speaker knows well not only
about the particular business in which one deals, but also about the industry in which this
business functions. Here are some facts about the recruitment industry in brief.
“The Organized Labor Market in India accounts for 2.8 crores, or 7 per cent of the country's 44-
crore workforce. The job market has nearly doubled in each of the last two years and is expected
to grow as the economy continues to expand,” as quoted by Mr. Isac in Business Line. Over
90% of the labor works in the Unorganized Market. The break up is as shown below:
29
62%
16%
10%
12%
0% 10% 20% 30% 40% 50% 60% 70%
Distribution of Labour Force across Sectors
Misc Jobs
Services
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The above displayed chart shows the distribution of labor in India as at the end of the year 2004.
However, even if the scenario is fast changing with services becoming a major source of
employment for many the percentage change is not much different from the figures shown
above. Agriculture is one of the largest employers in the unorganized market while menial or
odd jobs with the industrial sector or otherwise together constitute of the second largest
employment generator followed by the emerging service industry. As per the Employment
Survey carried on by Ma Foi Consultancy, the top ten employment generators of the year 2005
are as shown in the chart in the next page:
As one can observe, IT & ITES dominate the list of job providers with 25% of the jobs,
followed by Export and Import providing an estimated 11%, followed closely by Healthcare
Industry. The other industries are close to Healthcare Industry varying only by 1 or 2 percent.
With this size of the market, it is very obvious as to why India has become the chosen land for
30
TopJobProviders for the year 2005
Apparel
6% ET & C
7%
Power
8%
Oil & Gas
8%
Hotels
8%
Pharma
8%
Auto_Anc
9%
Healthcare
10%
Exim
11%
IT&ITES
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many a Recruitment Consultancies not only domestic players but also international bigwigs,
especially in the area of Temporary Staffing / Contingent Staffing as it is known in the USA.
This may be because USA is one of the main customers of Indian Off – Shore Units.
There is a fierce competition among the country's top HR firms, such as Ma Foi Management
Consultants, TeamLease and Adecco PeopleOne Consulting, etc. to become the largest private
sector employer by 2007. These companies are betting heavily on temporary staffing —
employees working for a third party, but figuring on the rolls of the HR firm. According to
officials in these firms, recruitment by IT companies would slow or even stagnate by 2007, and
it would be the HR firms that would surge ahead with temporary staffing, or, as they say, temp
staffing or flexi staffing. The Global Scenario is only very heartening.
Globally, temporary staffing is a $140-billion industry and around 5 per cent of the workforce in
any country is in temporary jobs.
In India, there is a potential to create about 1-1.5 crore such jobs in the next five years, as per
Mr. Ajit Isac, Managing Director, Adecco PeopleOne Consulting, a Bangalore-based
recruitment firm. The concept has been accepted at all levels, and it is now easy to convince
companies, across industries, to use temporary staff. Experts in this field anticipate the industry
to grow at the same pace this year too; apart from adding numbers, their objective is to ensure
that they work with good margins.
There is an increasing acceptance of temporary staffing as a mode of employment in the
corporate sector. Multinationals, due to their overseas exposure, are early converts to this
concept.
The best paying vertical for temporary jobs is BPO-ITES (IT-enabled services) followed by
information technology. In the future, BPO-ITES will be ahead of information technology and
financial services in temp staffing.
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Temporary staffing is credited with 50 per cent of the reduction in unemployment in the US and
11 per cent of job creation in the European Union during the 90s and a study of US companies
says that companies using temporary staff (called contingent staff in the US) have higher
margins, profits and market cap. It is these reasons that make Indian firms think more in this
direction.
However, despite all the positives, there was a general slowdown in recruitment across India
during the end of the year 2004. This was due to more emphasis more of consolidation of
businesses and lower Gross Margins. However, a new trend appears to be emerging. As per the
annual convention conducted by ERA (Executive Recruiters Association, India) the following
are the emerging trends in the industry:
1. International Players would enter India by way of mergers and acquisitions with
existing Domestic Players.
2. The extremely fragmented market is bound to witness the emergence of large
dominating players.
3. New entrants such as Vedior, Adecco, Manpower and Kelly will benefit the
Indian sector by the new technologies and automated processes that they bring in.
4. Specialized recruiters for meeting specific functional staffing requirements will
be in demand.
Year 2005 will also see temporary staffing being increasingly adopted by the old
economy industries.
5. In the IT industry, lateral hiring and demand for freshers will continue to drive
hiring in 2005.
6. Online recruiting industry is also expected to grow buoyantly this year.
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7. Recruitment Consultancies would require to be more than just recruiters to HR
Consultancies providing an array of other Value – Added Solutions to their
clientele, etc.
In such a growing industry, let us now understand what are Executive Search Firms, what are
their various roles and responsibilities, their Margins, the manner of Operation, the various tools
that these firms use to ensure complete client – satisfaction while making optimum use of their
resources, etc. and all this with the live example of Maxima Global Executive Search who are in
this business Pan – South – east Asia.
Executive Search Firms – An InsightExecutive Search Firms – An Insight
• What are Executive Search Firms?
Executive Search is an engagement process by which the most suitable professionals are
identified, approached, evaluated, and subsequently transformed into candidates worthy of
filling a critical senior position in a corporation. Executive recruitment consulting is a
specialized profession that helps client organizations identify, evaluate, and recruit executives at
various levels in the senior management level.
Executive Recruitment consultants work only on behalf of organizations on a retained or
contingency basis and never on behalf of individuals seeking employment.
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• Why Executive Search Firms?
At senior levels in industry, the best professionals are not actively seeking a change. They will
not respond to an ad, email, or other passive solicitation nor put their CVs on-line. Many do not
even have a CV. Many of these candidates exceed expectations; some actually create enormous
value for their employers. Hence, they may really not be interested in going or another even
more lucrative (at times) an offer, nor would their existing organization be willing to let them
go.
It is then the apt reason for the existence of executive search firms; as they help their clients
(people who need such expertise, but do not have the means or expertise to source it) find the
resources as per their requirement using various methods such as head hunting, poaching and a
lot of persuasion.
It is also said that Executive Search Firms act as catalysts that unlock value and rejuvenate the
economy.
• Methods used by Executive Search Firms:
Various Methods are used by Executive Search Firms, but the more popular ones are
Headhunting and Poaching, Internet, etc. either directly or indirectly, causing a scenario that
resembles a game of Musical Chairs at a corporate level. While the established business houses
like the Birla Group, Reliance Group, etc. still prefer to pick their top management team from
their known circles, many IT companies such as Patni Computers, TCS (to a certain extent),
Wipro, etc. and large organizations take in candidates for executive positions from executive
search firms due to various reasons as discussed in the previous topics. The most popular
methods are discussed in the following page.
• Head Hunting & Poaching:
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It is a process of getting executives already employed and satisfied with their current job
profiles to the jobs offered by the client company. The people who carry out this process are
called Head Hunters. These consultants woo successful managers and lure them into greener
pastures. They levy a nominal search fee and if the candidate scouted by them or hunted by
them gets selected by the company, the company has to pay the consultant an amount equivalent
to one month's gross salary of the selected candidate. This amount levied by the consultant
varies upto 2 months gross salary in some cases.
Very often, managers have admitted that they would have normally not applied in response to
an advertisement but the consultant played the role of the catalyst and could tempt them into a
job change. Many head-hunters generate a voluminous data bank of bio-data's/resumes of
various levels of stuff, executives and such and attempt to profile match on the requirements of
the company. The candidates are then sent to the company under the reference of the head-
hunter levies a service charge if the candidate referred by him is selected.
The major area of concern is that the head-hunter should not keep pecking up on the employee
he has just placed in a company and move him over to another company thus ensuring
maximum returns coming from both parties. It is for this reason that many organizations prefer
well established consultants (who are normally involved in the initial selection and screening
process) than head hunters who normally refer the resumes whose profile matches the
company's needs. The role of executive search firms is today of a head hunter as well due to the
reason stated above.
• Internet:
This is the latest trend is that of job related websites and applying for jobs through the internet.
Most Executive Search Firms have an “Apply Online” facility in order to save time for the
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applicant while streamlining the process of screening and ensuring anonymity for the client till
the applicant is found genuinely interested and eligible for the position offered. However there
are only few websites like www.naukri.com, www.jobsahead.com, etc. and specific company
websites like www.impactmanagement.com, www.maxima.com.sg, etc. which provide
systematic and professional services through the internet today.
Thus we see that today an interesting situation wherein companies are chasing executives
amongst a very limited resource base and selecting them using various methods. Hence, from
the candidate’s point of view, the one who succeeds in this rat race is the one who has maximum
companies chasing him / her.
These methods are being used increasingly and are seen as a regular feature in most
consultancies. However, there is a negative aspect to it s well. Some consultants may indulge in
mal practices such as explained in the next page.
1. The consultants may be having agreements with various companies in the same line of
business and place candidates from one organization in the other thereby creating a
similar vacancy in the former organization for which, again, the consultants may place a
candidate from yet another client company. This results in a continuous flow of
vacancies in the client companies that acts as a steady source of business for the
consultancy.
2. The consultancies may resort to Head – Hunting as their only method of recruitment,
which is not a permanent resort. They need to use other methods such as Write – ins,
Advertisements, etc. else, they would never be able to access fresh talent.
• Services offered by Executive Search Firms:
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Executive Search Firms work on “Assignments” basis. Hence, in this section, the author
provides an insight into the various services that the executive search firms provide to their
clients.
1. Their Assignment begins with the day when the client approaches them with the
vacancy, the required job profile and the details with regard to the package offered the
location of the job, etc. these details are taken down with great care as the information is
highly classified and meant for high profile jobs.
2. The Firm then understands more about the client, the culture, organizational
requirements, scope of the job at hand, etc. With this background study firmly in place,
the firm sets about selecting a suitable strategy that it would adopt for conducting
recruitment.
3. The firm then researches with its various databases, corporate journals, corporate circles,
etc. to gather a list of eligible candidates for the position and salary offered.
4. Once the list is ready, they identify the most potential candidates by a short listing
process, verify their credentials, conduct telephonic screening interviews, etc. and arrive
at a final list of short listed candidates.
5. The consultants then present their report to the client company, arrange for interviews
with the clients and conduct a formal reference check on selection of the candidate by
the client.
6. Some consultants perform the role of a negotiator as well so far as the salary package
and benefits are concerned on behalf of the clients.
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7. Some consultants also act as advisors to the company in matters of appointments and
review mechanisms for the candidates recruited by them.
8. Some consultants also offer management consultancy services to their clients while,
some others manage the HR operations such as payroll, performance review processes,
etc. in addition to recruitment (which is their main forum).
• Major Players in Mumbai:
There are several players in Mumbai engaged in the business of Recruitment Consultancy, but
less than a hundred Executive Search firms operating on a large scale. The main players are as
follows:
1. Ma Foi Management Consultants Ltd.
2. Zenith Global Consultants Ltd.
3. Sampark search Ltd.
4. Abyss & Horizon Management consultancy.
5. Online Recruiters Pvt. Ltd.
6. Impact Management and Personnel Services.
7. 3P Consultants Pvt. Ltd.
8. K-10.
9. Emmay HR.
10. Myndcenter, etc.
There are many others but the industry is highly fragmented and the above mentioned names are
those consultancies that form the cream of the industry in Mumbai and operate globally. They
are large scale operators and provide a variety of services starting from Client – Seeking,
Candidate (Executive Level and above) search, Carrying out the pre – screening activities for
the client, Short listing the candidates on their qualifications, experience and personality that
would be best fit to the client’s organization and the job requirement, arranging and
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coordinating the final interviews, negotiating on behalf of the clients, providing counseling
about the job, to some of the other HR activities such as managing the personality development
of the employees of the organization, Payroll management, etc.
Most of the top – notch players are located in the Western and Central Suburban Industrial areas
such as Andheri, Bandra, Churchgate, Colaba, Mulund, Thane, etc. where they are easily
accessible to the clients as well as the candidates. They have a committed pool of executives
who work tirelessly to provide excellent service to the clients. The employees at a junior level of
these consultancies are paid on variable pay schemes with a fixed basic pay and certain
commission on every candidate placed. Each employee is assigned to a superior who carries out
performance monitoring and helps the employee in event of any problem he/ she is unable to
solve in process of his / her job.
Since the junior level jobs involve routine and clerical work, the work environment is
maintained at an informal level to break the routine. At a senior level, the jobs involve a lot
more seriousness as the profile includes converting prospective clients, negotiating the terms
and conditions of the agreement, agreements to be drawn, understanding their requirements and
communicating it to the junior executives for further processing accurately, reviewing the
progress at regular intervals, etc.
Hence, it is correct to mention at this stage that, “The job of Executive Search Consultancy
though apparently simple and requires only good communication skills and flair for people to
succeed in this profession is actually hard work & requires Constant Vigilance”.
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There are many challenges that the firms will come across, some which can be anticipated while
others which may not anticipatable at all. In the next topic, the author discusses the challenges
that look in the eye of Executive Search and Placement Firms and the way ahead for them.
Challenges posed in futureChallenges posed in future
Global Recruitment is taking a new form – that of recruitment in the “Indian Multinational
Organization”. People do not prefer working abroad for the following reasons:
 The lure of foreign postings is receding except on campus recruitment
 People are reluctant to get posted in developing countries
 Compensation for the talent has increased substantially in India
 Working couples do not prefer foreign posting for many reasons such as family
relocation issues, etc.
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The Net Result of these is “Foreign posting is positioned as a stepping stone for career
growth, Build in International assignment premium in companies” for those who start afresh
in the job market.
In such a scenario, where senior managers may really not be interested in job hopping and
moving abroad, especially to a developing country, and only freshers wish to relocate to make
fast money, it is food for thought as to how Global Executive Search Firms will succeed in their
quest for placing managerial talent abroad especially those who deal in emerging markets
around the world. This is a very big challenge that Executive Search firms will encounter.
Also, the industry (world over) is highly fragmented with hardly 5000 retained executive search
firms that are globally competitive. The rest of the industry is formed by Small enterprises with
little or no resources in terms of finance, manpower and experience. This is causing dilution of
the industry tremendously.
Another challenge could be the lack of governing bodies to the industry. It is a known fact that
most professions have associations, like the Bar Council for the Legal Practitioners, etc.
However, though Executive Search and Placement is an extremely professionally managed
enterprise, there are only two associations globally, AESC and ERA with a miniscule
percentage of the entire industry as members. It can therefore be rightly said to be the
Unorganized Industry trying to provide employment in an Organized Industrial Set up.
The author now states the changing role of Executive Search Firms in the years to come in the
next topic.
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Changing Role of Executive Search FirmsChanging Role of Executive Search Firms
Recruitment intermediaries, or agencies, have had a tough time since 2002, but signs are that the
market is picking up, and from the second half of 2003, agencies have begun to show increased
confidence. Threats such as the growth of e-recruitment, shared services within organizations
and pressure on fees are present. Nevertheless, a growing market in recruitment is predicted, and
the niche positions that intermediaries occupy that will remain in the foreseeable future.
When recruiting externally, organizations report becoming increasingly focused on employer
branding, and on quality of the advertisements placed. Over a quarter of organizations surveyed
by the ‘ies’ survey, UK, have pointed out increased line managers’ ownership of recruitment
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procedures, while HR involvement is most commonly seen at the selection stages. The influence
of technology and the Internet is clearly growing, with 70 per cent of employers reporting the
use of their own websites.
Of particular interest is a significant increase in the utilization of commercial online jobs
advertising which rose from 15 to 40 per cent between 2002 and 2003, though this method is
still regarded as providing large numbers of largely unsuitable candidates due to insufficient
screening processes, and an inability to accurately match individuals with both the job
description and the organizational culture. Clearly, intermediaries might offer a service in this
area. Their knowledge of the market, rates of pay and benefits, and access to suitable
candidates will help to give them the edge over unstructured Internet approaches.
Recruitment agencies and search and selection services till date remain the most popular
methods of sourcing managerial and professional candidates (75 per cent using this method). A
perceived, and perhaps real, threat to the role of recruitment intermediaries comes from the
growth of e-recruiting approaches. E-recruiting, or web-based recruiting, can be described as
any recruiting process that a business organization conducts via web-based tools, such as a
firm’s public Internet site or its corporate intranet.
However, in spite of the large proportion of in-house and external recruiters who engage in
online recruitment methods, there is minimal evidence that the majority use these for senior/
management level positions. The bulk of activity in this area is related to volume position
recruitment. The ease by which candidates can send multiple applications has led to massive
over-supply of applications, bringing with it an overload of data handling for HR departments.
There is opportunity here for intermediaries to provide an added-value service by handling
the candidate-attraction process, providing screening and response management. Hence the
use of e-recruitment may be harnessed even more effectively by intermediaries, and, rather than
a threat, it could become an opportunity for increased effectiveness.
Some implications in my opinion are as follows:
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The services that are provided by recruitment intermediaries both on a temporary contract and
permanent placement basis may continue to a large extent to be invaluable to their client
organizations, which often may not have the resources, market expertise or legal ability to
recruit key individuals into their organization.
The reduced number of skilled, appropriate workers who are actively seeking employment is set
to continue to fall; recruitment intermediaries may provide the specialist abilities and access to
highly skilled candidates that organizations are not able to approach individually.
The incorporation of new labor pools from all over the world will provide increased access to
labor supplies, which may present significant opportunities for those intermediaries able and
equipped to deal with international recruitment, tax and legal systems as well as bridging
cultural divides.
The implications as mentioned above therefore stand to show the different avenues that would
be opened to executive recruiters in the near future and it is imperative that recruitment
intermediaries take necessary steps to handle these opportunities in a rewarding manner.
Live Example – Maxima Global Executive Search, BangaloreLive Example – Maxima Global Executive Search, Bangalore
The author has taken Maxima Global Executive Search, a Singapore – based company, with its
Indian Headquarters at Bangalore as her live example of Executive Search Firms to understand
more about Executive Search and Placements. This section of the report has been presented in
the following format:
• Company Profile.
• Areas of Operation.
• Method of Operation.
• Distinct Features of Maxima Global Executive Search.
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• SWOT Analysis.
These are explained in detail as follows:
• Company Profile:
MAXIMA Global Executive Search is a premier human capital solutions company that offers
the following services to clients in both traditional and technology sectors.
• Executive Search,
• Advertised Selection and
• Consulting Services
They are based in Singapore and have partners in Australia, China, South Korea, India,
Germany, UK and the United States of America. They have built a highly successful track
record of helping clients build exceptional human capital resources through a combination of
extended global reach, industry and regional expertise, functional depth, proven research and
recruitment methodologies, strong client focus, teamwork and perseverance.
They serve a wide range of clients from some of world’s largest multinational corporations,
governments and global banks to hi-tech startups, consulting companies and venture capital
firms. Their clients are spread globally and they have carried out search assignments in all major
geographies in the world.
They work in close partnership with their clients and have helped them develop high-
performance corporate teams and leadership capital. They have used a variety of engagement
models to suit the requirements of each client/assignment. These include retained searches,
contingency searches, advertised selection, consulting projects and recruitment outsourcing.
• Areas of Operation:
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They offer executive search and consultancy services in the following sectors of the industry at
a global level:
• Oil and Gas
• Automotive
• Consulting
• Engineering
• Telecommunications
• Information Technology
• Forestry and Plantations
• Hospitality and Property Development
• Manufacturing
• Higher Education
• General Management
• Banking and Finance
• Sales and Marketing
• Electronic Manufacturing
• Research and Development
• Human Resource Development
• Method of Operation:
MAXIMA provides highly focused search and selection services across a broad spectrum of
industry and service sectors. They have a system of Practice Groups catering to each of the
above mentioned industrial sectors, providing several years of rich functional experience or that
in executive search. In order to develop and retain in-depth knowledge, contacts and global
search capabilities in such diverse sectors, their team is structured into 8 distinct practice groups.
These are explained as follows:
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1. Board / Top Management: The practice group assists its clients in search and selection
of senior professionals for appointment as Independent Members of Board of Directors,
Chief Executive Officers, and Advisors to the Board of Directors, Chief Operations
Officers, Chief Financial Officers, and Executive Directors, etc.
2. MAXIMA tech: This is the technology practice group that services clients in IT,
Telecom, Electronics Manufacturing, R&D, Online Education and Biotechnology
sectors.
3. Banking & Finance: These are consultants who have a strong track record in search and
selection of corporate executives for Investment, Corporate, Consumer and Private
Banking; Life & General Insurance; Private Equity; Venture Capital; Risk Management;
Corporate Finance; and Project Finance.
4. Manufacturing: This practice group covers appointments in a wide range of traditional
manufacturing and process industries including Food, Textiles, Steel, Chemicals and
Petrochemicals, Packaging, Light Engineering and Consumer Goods.
5. Sales & Marketing: This practice group covers sales, marketing and business
development positions across several industrial and consumer goods sectors. It includes
senior management positions in FMCG, Retail, Channel Management, Brand
Management, Direct Marketing, Market Research, Institutional Sales, International
Trade and Commodity Trading.
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6. Emerging Markets: This team at maxima has strong capabilities in search and selection
of senior professionals with experience, and the required attitudes and motivation levels,
to succeed in emerging markets like China, Indian Sub-Continent, Indo-China, CIS,
Central/Eastern Europe and Africa. It is a group that concentrates on executive
placement exclusively in developing markets in near future. This is one of the
specialities of Maxima Global.
7. Property & Hospitality: The practice group focuses on senior management positions
for infrastructure projects, commercial/residential property development, hotels,
specialty restaurants, resorts, entertainment industry, theme parks and recreation centers,
which is an attractive, and in vogue Business Avenue.
8. Forestry & Plantations: Maxima Global has a highly specialized group that services
clients in South East Asia and Africa with forestry and plantation management
professionals, including senior agronomists and remote sensing/imaging specialists.
Each of these practice groups function in their specific areas of operation on the following
model to produce the best results for their client in a manner that it mutually rewarding.
• The Maxima Model of Operation:
At Maxima, they follow a six step approach to conduct executive search and placement
effectively. The six steps by themselves are exhaustive and include a number of sub – processes
to be carried out. The six steps and their sub - processes are shown in the diagram as follows:
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Executive Recruitment & Placement – The Maxima Way
As we can see, the first step is receiving an assignment that involves the following steps:
• Understanding the Business and Corporate Culture of the client.
• Appreciation of the Role and Expectations of the candidate in the client’s organization.
• Definition of Job Scope, Responsibilities and Requirements.
• Recommendation of Compensation & Benefits Strategy for the position on hand.
• Selection of Suitable Recruitment Strategy.
Each of these steps entails extensive communication with the concerned authorities with the
client’s organization.
The next step is conducting research, which has the following steps:
49
Assignment
Research
Identification & Assessment
Presentation
Offer
Appointment & Joining
Maxima Global
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• Search the Proprietary and Other Databases formed by using Candidate Profile Sheets
(Annexure1)
• Conduct an Industry Sector Research
• Check out the Network, Partners and Industry Consultants
• Look into Personal Referrals
These involve a lot of clerical work so far as searching the databases, etc. are concerned. It is in
this step that they decide the recruitment pool for the assignment at hand. Also, it has a number
of personal contact and rapport to be developed as these could be useful for their current
assignment and future ones to come. Hence, interpersonal abilities are crucial.
The next step is identification & assessment of prospective candidates to fill the position. This
step involves the following steps:
• Initial Shortlist of prospective candidates from database search, etc.
• Verification of Credentials of these candidates.
• Conduct Personal, Telephonic and Video Interviews as a pre – screening measure.
• Conduct Background Checks
• Final Shortlist
The next step is presentation of the findings to the client, which involves the following steps:
• Presenting the Candidate Assessment Reports
• Giving Recommendation
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• Arranging and Coordinating Client Interviews
• Performing Formal Reference Checks
The next step is presenting the offer to the candidate on behalf of the client that requires the
following to be done:
• Development of the Offer
• Defining in clear terms the Compensation & Benefits package
• Negotiations
The last step in the process is appointment & joining wherein the candidate is actually placed in
the client company and involves the following steps:
• Appointment & Induction
• Providing Advisory Support
• Providing Logistics/Relocation Advice
• Ensure Joining
• Carrying out a Joint Review
After this, they move on to the next assignment and the process continues. It is important to
understand at this juncture, “What is it that distinguishes Maxima from Other executive search
firms?” To answer that question, the author has stated the distinct features of Maxima Global
Executive Search in the next section in the following page.
• Distinct Features of Maxima Global Executive Search:
1. Have extensive business globally.
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2. Have strategic planning and extensive experience in this field.
3. Have the ability and expertise to understand and identify the client’s long – term
strategic business requirements and find them the required resource effectively.
4. Have Intensive Research Capabilities.
5. Use well developed and proven effective models, processes and methodologies.
6. Have Global Access and Coverage.
7. Offer Faster Response Time.
8. Offer Cost – Effective Fee Structure.
9. Ensure Personal Commitment.
10. Committed to the “Business Partner” approach with the clients.
The author now presents the SWOT analysis of Maxima Global Executive Search with the
given background about the company as follows:
• SWOT Analysis:
The SWOT Analysis is an analysis of the company’s Strengths, Weaknesses, Opportunities, and
Threats in the current marketplace.
A) Strengths:
1. Experienced team
2. Flexibility
3. Dedication
4. Sectoral Expertise
5. Systematic Procedures
B) Weaknesses:
1. Lengthy and Time Consuming processes
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2. Outdated Profile sheet system.
3. Very little networking and presence in India
4. Lack of association with any organized body for Executive Search Firms.
C) Opportunities:
1. Large Uncaptured Market in India.
2. Emerging Service Sectors
3. Potential MNC Clients in Mumbai
4. Adapting newer technologies to enable better networking and database building.
D) Threats:
1. Fast entry of Multinational Competitors
2. Increased cost of retention in the firm due to increasing demand.
According to the author, Maxima should look into the following aspects to continue to grow and
make a mark in the Indian market as being a global service provider in the recruitment industry:
 They should update their profile sheet to an Internet based Just – a – Click type of
profile sheet that executives can fill during their free time in office.
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 Though fool proof, the recruitment process followed at Maxima is very lengthy and time
consuming and one suggestion in this direction is that database could be maintained
online, which would make sorting and filtering the profiles to collect the required
candidate profiles quicker and easier.
 The company lacks presence in India very badly. It has only one office that too in
Bangalore. It needs to expand at least in the metro cities of India.
 Executive Search is not yet recognized as an Industry and the absence of any association
with an organized body may serve as a big disadvantage as it does to a fish in a large
ocean. In Bangalore itself, there is an association by name, “Executive Recruiters
Association,” which in my opinion is worthy of being associated with.
 They are a Multinational themselves and know the scale of operations that MNC Firms
would have which only reinstates the fact that they need to build stronger networks all
over the country.
 The industry itself is scattered. Hence, with increasing demand, Maxima need to identify
innovative measures of retaining talent at their end so that they can continue to service
their clients effectively and efficiently.
In my opinion, if these are looked into with serious thought, Maxima could be better placed in
the Indian Industry and be equipped with the necessary back – up to combat challenging times
ahead.
Research Findings, Analysis & Way AheadResearch Findings, Analysis & Way Ahead
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The author visited five Executive Search Firms in Mumbai with a sample of 15 respondents.
Also, the author has visited some corporates who use recruitment consultants for carrying out
their recruitment. This research has been carried out with the following limitations:
1. Limited Geographical Coverage: The Author has limited herself to the companies
located in Mumbai and is not representative of the firms located all over India.
2. Paucity of Time: The author had been allotted 45 days for the project, which is a little
short to complete such an extensive project and do justice to the same.
3. Very Small Sample: The Sample chosen is very small and may not be representative of
the entire population.
4. Sampling Methodology: The Sampling method chosen by the author is convenience
sampling, which may not present a fair measure of the population under study.
However, despite these limitations, the author has gained some insight into Executive Search
Firms out of the research which have presented as follows. The views are solely according to
what the author has understood from the analysis of research findings.
Q. Why have Executive Search and Selection firms gained importance over years?
Ans: Executive Search and Selection Firms have proliferated greatly in the last decade or so.
There is ken competition between the more professional set – ups and the well established
transnational consultancies. The main reasons for these firms gaining importance are as follows:
1. Growing demand for Knowledge Based jobs and lack of talented manpower is making
the job market extremely competitive. In this scenario, Executive Search firms offer
significant benefits to the client firms such as extensive search, perfect fitment, lower
cost of procurement, systematic and timely service, etc.
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2. The candidates are also benefited in terms of job – fit, virtually no costs, professional
assistance and service, etc.
Q. Why do corporates use Executive Search Firms?
Ans: There are various reasons as to why companies use Executive Search Firms and these have
been elicited in the report before. However, these are a few reasons that companies have graded
higher than the others as per the research findings. They are shown in the diagram below :
Q. What proportion of Corporate Placement is done through Executive Search Firms in
major sectors of Industry in Mumbai (namely, Telecom, IT, Pharma, etc.)?
Ans: The proportion of corporate placement done through Executive Search Firms in Mumbai
Overall across all industrial sectors is approximately 20%. The proportion of corporate
placement as per the levels in Management is shown in the graph in the next page:
56
Why Executive Search Firms?
20%
28%
13%
13%
13%
13%
Identify New Talent
Avoid Cumbersome
Recruitment Process
Avoid Internal
Heartburn
Faster Service
Cost - Effectiveness
Advisory Expertise
Proportion of Overall Placement (Anually) through ESS Firms
53%
27%
20%
Top Management
Middle Management
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Q. What are the Critical Success Factors for Executive Search and Placement firms in
India?
Ans: Based on the observations and analysis above, the author has identified the following
critical success factors for Executive Search and Placement firms in India:
 Communication and People Skills.
 Focused and Dedicated Team.
 Flexible approach.
 Effective Database management.
 Good Client Relationship Management.
 Good Networking in the Industry and Business Circles.
 High Self – Motivation.
 Experienced Team.
 Low Cost, Effective Service Providers.
Q. How do Organizations identify Executive Search Firms?
Ans: There are different ways in which, Corporates identify Executive Search Firms that would
serve them in their best interests. They are shown in the diagram in the proportion of occurrence
as follows:
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Ways how Corporates Identify Executive Recruiters
34%
13%20%
13%
13%
7% Previous Acquaintance
Through Referrals
Through Websites
Through trade Journals
Through Magazines
By Chance
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As one can observe, many corporates go to executive search firms only if they have done
business together earlier and have had satisfactory outcomes. The next best way is through
corporate websites of the executive search firms, which only stands to point out the importance
of going online with their business as the most important step that Executive Search firms need
to take.
Q. What are the factors that would induce Corporates to approach Executive Search firms for
the first time?
Ans: From the previous question, we have understood that most corporates approach tried and
tested firms only. However, there are some factors that attract clients to executive search firms
for the first time. These factors are explained as follows:
58
Factors that attract clients for the first time
27%
7%
13%27%
13%
13%
Cost of Service
Small Team
Previous Experience
Personal Contact
Global Presence
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As one can observe, for the first time, even though the cost of service is important, companies
give equal weightage to personal contact in the firm. Following these come the goodwill,
previous experience in the field and Global presence, which can be identified by the reputation
that the firm has and its standing in the industry. The least affecting factor would be the size of
the team as companies look at the efficiency and effectiveness of service irrespective of the size
of the team. This is because there is no proven correlation between the Size of the team and
Productivity.
Q. What are the various tools that Executive Recruiters use to assess the candidates prior to
final selection?
Ans: The various tools used by executive recruiters in Mumbai are as follows:
1. Recruitment Strategy: They select the recruitment strategy keeping in mind the
following:
2. Assessment Practices: They use their expertise in the areas of testing and
assessment that lends a visible value addition when combined with the power of
staffing. E.G: Ma Foi does this through well-researched, standardized and
renowned tests that can be customized to suit each of their client's unique
requirements.
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In addition, they have a strategic alliance with the Institute for Personality and
Ability Testing (IPAT - The Wholly owned subsidiary of Oxford Psychologist Press,
UK), USA, which makes Ma Foi the sole copyright holders and distributors for some
of the world-renowned tests in India. Sixteen Personality Factor Test (16PF),
16PF SELECT, Executive Profile Survey (EPS), Comprehensive Abilities
Battery (CAB), Myers-Brigg Type Indicator (MBTI), Able Series, and Destiny
Series are some of the tests they conduct to assess the Personality, Emotional
Intelligence, Integrity and Behavioral traits of professionals prior to the final
selection.
From these finding and the analysis thereon, the author has suggested the way ahead for the
firms engaged in Executive Search Business as follows:
• Way Ahead:
1. An entirely Service Business, Executive Recruitment is highly people oriented and
knowledge based, and hence, any lack of focus on Client Relationship management
would be disastrous as the business runs on trust created and maintained.
2. Recruiters, especially in the field of Executive Search and Placement, need to be more
than just recruiters but become providers of a variety of HR related services.
3. Organization needs to be brought about to have some professional and ethical guidelines
in the industry.
4. Executive Recruiters must not indulge in mal practices and follow these ethical and
professional guidelines so laid down, failing which; they will lose out on credibility in
the industry.
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5. Consolidation of firms – national and international – is a welcome choice.
6. Executive Search Firms should be viewed as aids to success and not as the only means to
success, as “Retention is the Best Policy”.
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ConclusionConclusion
Recruiting seems to be one of those things that are poorly understood (sometimes even by
Recruiters) and the least respected job in the HR department of many firms world over. This is
because people do not understand its importance and view it as a Cost – Center. This is probably
the first activity that is being increasingly outsourced to third party recruiters due to various
reasons as stated before in the report.
There are Corporate Recruiters (those who are employed by a company for the purpose of
finding and qualifying new employees for the company). And there are 3rd party Recruiters
(those who are subcontracted to by a company for the same purpose). There are different types
of 3rd party recruiters, viz; Retained Recruiters and Contingency Recruiters; but the main
difference lies in how they are compensated. Both are paid by the hiring company.
Retained Recruiters typically have an 'exclusive' with the company and are paid a portion of
their fee upfront, and the balance paid when the search is over. Retained recruiters are typically
used for executive level positions. Contingency Recruiters don't typically have an exclusive
relationship with the company, and are paid a fee only if the company hires a candidate through
their efforts. (Most 3rd party recruiters fall into this category.)
To successfully work with recruiters, one must first understand that recruiters are not working
for the job seeker, but the company. It is the company that pays their fees. It is the company
they must ultimately satisfy if they are to get paid for all of their hard work. 3rd party recruiters
are typically compensated 20-30%, or more, of a placed candidate's first year annual salary or
on terms such as the first two months salary of the candidate hired, etc.
A company wants what they want, after all they are paying well to get it, and if a recruiter were
to bombard the company with resumes of people who just don't fit the job, they would find
themselves not being called by the company the next time there are jobs to be filled. Hence, a
professional recruiter will want to know that they have not only done a good job for their client,
but they will also have best interest in mind for the candidate.
Executive Search Firms are typically Retained Recruiters operating on assignment basis and
have extended responsibilities towards not just recruiting senior level professionals but also ith
providing advisory services, management consultancy, etc.
Moral of the story, “Understanding the recruiter, and being sure they understand you, is the
first step in successfully working with one.”
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Bibliography & ReferencesBibliography & References
Books & Publications:Books & Publications:
1. Human Resources Management – Gary Dessler
2. Managing Human Resources – Waine. F. Cascio
3. Personnel Management – C. B. Mamoria
4. Human Resources Management – Mamoria & Gangar
5. Human Resources & Personnel Management – K. Ashwatthapa
6. The Changing Role of Recruitment Intermediaries - a study supported by the IES
Research Networks
Articles:Articles:
1. Weighing Every Move – Hindu Business Line
2. Press Release – Deloitte
3. The Art of Recruitment – Jobseekers Advice
4. HR firms bullish on temporary staffing - Business Line, Mar 28, 2005
5. Organized sector employment to rise 3.35% in Q3 - India Infoline, Feb 11, 2005
6. Why Managers don’t respect Recruiters – By Dr. John Sullivan
Websites:Websites:
1. www.maxima.com.sg
2. www.jobprofile.com
3. www.vault.com
4. www.assureconsulting.com
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5. www.successfulmanagers.com
6. www.era.org.in
7. www.mafoi.com
8. www.k10jobs.com
9. www.zenithglobal.com
10. www.impactmanagement.com
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AnnexuresAnnexures
Annexure 1:Annexure 1: Candidate Profile Sheet used at Maxima Global Executive Search:Candidate Profile Sheet used at Maxima Global Executive Search:
10 Collyer Quay, #06-03,
Ocean Building
Singapore 049315
Tel : +65-6536-1828
Fax : +65-6536-9877
enquiries@maxima.com.sg
www.maxima.com.sg
Profile
Date
Position Applied For
Name
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Address
Home
Work
Mobile
E-Mail
Nationality
Residence Status
Date of Birth
Gender
Education
Professional Training
Other Courses
WORK EXPERIENCE
Total Work Experience
Current Position
Current Organization
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Reporting to
Direct Reportees
Total Team Size
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Organization Chart
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Employment History
From - To
MM/YY -
MM/YY
Position Employer Reporting
To/Direct
Reportees/
Team Size
Key Responsibilities
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Key Technical/Functional
Strengths
Key Professional
Achievements
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Other Strengths
Limitations
Largest Team Size Managed
Employer/Project :
Overseas Work Experience
(Location/assignment/duration)
Recognition/Awards
Membership of Professional
or other institutions
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Additional Information,
if any
Professional References
Current Gross Annual
Compensation
(Please state currency)
Base Salary :
Bonus :
Performance Linked Incentives :
Perquisites :
Other Benefits :
Stock Options :
Taxation :
Expected Compensation
Notice Period
Relocation
Conditions/Concerns/
Request for Information/
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Other terms, if any
Family
Personality
(Self Assessment)
Management/Leadership
Style
Global Exposure/Travel
Interests and Hobbies
Sports
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Language Skills
Any other Information or
Remarks
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Annexure 2:Annexure 2: Questionnaire to Executives of Executive Search Firms Visited:Questionnaire to Executives of Executive Search Firms Visited:
1.1. What is an Executive Search firm in your opinion?What is an Executive Search firm in your opinion?
__________________________________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________________________________
______
2.2. Why do you think, companies approach Executive Search Firms?Why do you think, companies approach Executive Search Firms?
__________________________________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________________________________
______
3.3. State any three ways in which companies identify the right kind of Executive SearchState any three ways in which companies identify the right kind of Executive Search
Firms to suit their requirements?Firms to suit their requirements?
__________________________________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________________________________
________
4.4. What according to you is the proportion of Corporate Placement in Indian Firms doneWhat according to you is the proportion of Corporate Placement in Indian Firms done
with the help of Executive Search Firms? (Please Tick in the box adjacent to what youwith the help of Executive Search Firms? (Please Tick in the box adjacent to what you
feel is the answer)feel is the answer)
1) Below 5%1) Below 5% 2) 5% - 9%2) 5% - 9% 3) 10% - 14%3) 10% - 14% 4) 15% - 19%4) 15% - 19%
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5) 20 – 24%5) 20 – 24% 6) 25% and Above6) 25% and Above
5.5. How according to you is the proportion varying across the various levels ofHow according to you is the proportion varying across the various levels of
management?management?
Top Management _______________Top Management _______________
Middle Management _______________Middle Management _______________
Junior Management _______________Junior Management _______________
1) Below 10%1) Below 10% 4) 30% - 39%4) 30% - 39%
2) 10% - 19%2) 10% - 19% 5) 40 – 49%5) 40 – 49%
3) 20% - 29%3) 20% - 29% 6) 50% and Above6) 50% and Above
6.6. Your Firm is involved in recruitment at which of the following levels?Your Firm is involved in recruitment at which of the following levels?
Top ManagementTop Management
Middle ManagementMiddle Management
Junior ManagementJunior Management
7.7. What are the various services that an Executive Search firm must provide in order toWhat are the various services that an Executive Search firm must provide in order to
remain competitive in the current market?remain competitive in the current market?
__________________________________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________________________________
______
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8.8. What is that Unique Feature that distinguishes you from other similar service providers?What is that Unique Feature that distinguishes you from other similar service providers?
__________________________________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________________________________
______
9.9. Name the top competitors in your business and their competitive advantage according toName the top competitors in your business and their competitive advantage according to
you?you?
__________________________________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________________________________
__________
10.10. What is the value addition that your firm provides in addition to actual assignments toWhat is the value addition that your firm provides in addition to actual assignments to
provide Customer Delight?provide Customer Delight?
__________________________________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________________________________
______
11.11. What is the methodology followed by your organization for Executive Search andWhat is the methodology followed by your organization for Executive Search and
Selection?Selection?
__________________________________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________________________________
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__________________________________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________________________________
____________
12.12. Kindly explain the method and mode of payment of your fees from your client in brief?Kindly explain the method and mode of payment of your fees from your client in brief?
__________________________________________________________________________________________________________________________________________________________
__
__________________________________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________________________________
______
THANK YOU FOR YOUR TIME!THANK YOU FOR YOUR TIME!
Annexure 3: Questionnaire to Client’s Executives:Annexure 3: Questionnaire to Client’s Executives:
1.1. What is an Executive Search firm in your opinion?What is an Executive Search firm in your opinion?
__________________________________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________________________________
______
2. Why do you think, companies approach Executive Search Firms?2. Why do you think, companies approach Executive Search Firms?
__________________________________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________________________________
______
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Role of Executive Search Firms in Corporate Hiring

Role of Executive Search Firms in Corporate Hiring

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