Search Firm Selection

Selecting the right search firm a new market is one of the most important decisions a company will make. Often companies have a good experience with a global firm in their country, this is not to say they will have the same experience in Japan, on the contrary, we often receive feedback from our new clients stating their decision to work with XYZ Global Search Firm was based solely on the experience they had in their home country. When they receive an unacceptable standard here in Japan, they are surprised and disappointed.

The executive search profession ranges in models from "Retained" search to "Contingency" search. Retained search firms are paid a retainer up front to start the search process, another portion of the fee toward the middle of the process and the balance when the candidate begins work. Contingency search firms, on the other hand, receive their entire fee at the conclusion of the search process. Over the years, many contingency firms have begun receiving retainers while retained firms have expanded their models to include flat fees, capped fees, etc. It should be noted that generally Contingent search firms that execute retained searches, use contingent methodology with money up-front.

When choosing a firm, it is a good idea to consider carefully what you want from the relationship. While contingency firms offer a service with no money up front, they will often only work on those searches that can be executed quickly and do not have the time to focus on high-quality candidates.

Facts About Recruiting Firms In Japan

Global Firms use Partner Consultants to “win” searches, they offer impressive presentations and reporting, however the consultant you meet does not actually execute the search. Each consultant is required to “execute” between 10-15 searches at a time in order to sustain their global platform. (“Execute” means manage the client, which is always required since they’re juggling multiple searches.)

Large Contingent firms have also use Partner Consultants to “win” searches, and to compound the problem, they work on hundreds of searches at any given time, and have large staff turnover (often 100% per year). They drive their business on database building; each consultant follows a metric system, which means they “have” to meet a set number of new candidates every month. This has nothing to do with filling roles, this is the company’s way of mitigating risk; statistically the company knows the recruiter will not be there long enough to make them money, so the only way to assure them that their desk will be paid for is by filling their database. The contingent business model is based on statistics, send 40 resumes out, and one is bound to turn into a placement.

I guess this paints a gloomy picture for the client...well not really; the reality is there are some great consultants out there. It is the clients’ responsibility to do their due diligence. I always recommend getting references from the specific consultant executing the search. Don’t accept general “company” directed references, after all the first company I worked with is still using my references, so who’s executing those searches?

Recommendations

After working in the various business models, I’d recommend working with a small specialized firm. They will understand your industry, have quality consultants, their reputation is ultimately more important to them, they are focused of real search execution, have low consultant turn-over, and are more flexible with their fee structure.

Another key point to consider - is your firm being represented properly in the market? I know hundreds of recruiters in Japan, and we are often surprised when good companies, select firms that our unemployed candidates won’t even visit. By using this recruiting firm, your company is painted with the same brush. Once again, this comes down to the firm you select, do your due diligence, ask around.

Please feel free to contact me if you would like recommendations for search firms here in Japan, I’d be more than happy to you give you my candid feedback with who’s who in the Japan Market:

Contact John D Morris