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Building Internal Leadership & Executive Recruiting Functions

Adam Ward

As we mentioned last month, one of the natural evolutions of maturing recruiting teams is to build out an internal leadership/exec recruiting function. In fact, as we have noted before, it has been a growing trend for companies to invest in this function on a continually earlier basis. At Growth by Design Talent, we have the POV that building this internal muscle is a key differentiating factor in the success of growing companies. As a trusted advisor, you can position yourself to be anticipating these needs by being close to the business and talent strategy. 

Here are some of the common inflection points: 

  • The founding leadership team that got you to this point will not get you to the next stage. You may need more maturity, depth of experience, or specialty skills that aren't currently on the team.
  • Change in business direction. You are pivoting the product, addressable market and/or business strategy that requires a different set of leaders.
  • Preparation for an exit. Most common roles needed as you build IPO readiness are a seasoned CFO, General Counsel, Chief Marketing Officer, Chief Compliance Officer, and CPO/CHRO. Other niche senior roles like Head of Investor Relations and Head of Internal Audit also become necessary.

So you’ve determined the need to make a handful of hires over the next 6-12 months. What’s the business case for building out executive recruiting capability?

  • Cost is an easy and obvious one. You can do some quick back-of-the-envelope math on projected leadership roles that may need to be filled compared to the retainer fees of a search firm. 
  • With a better understanding of company culture and needs, you are much better positioned to create a positive candidate experience and brand affiliation than an external partner. Remember, by definition, these are well-respected and networked individuals, so creating positive net promoters for your company has value, and as employees, you are more invested in ensuring your process does so.
  • Build the internal capability. Like any other skill, getting your execs effective at recruiting takes effective repetition to get better. Interestingly, we find the seniority of the role is inversely related to how structured and effective a leadership team is at assessing candidates. An external firm isn’t going to create this accountability and continually outsourcing this to an external firm negates this opportunity to build the muscle.
  • Leading the search internally allows you to align executive hiring with the company's talent strategy. Org design and where different types of work lives is also important when thinking about the right leader to own the optimal scope based on the trajectory and objectives of the business. You can also create a better preboarding and onboarding experience by establishing a relationship with the candidate from the earliest days and having specific assessment feedback on where they may need support to be successful. You are also more likely to think about internal candidates who may be ready to step into a bigger role based on succession planning work.

Over our many years of building internal executive recruiting functions and leading retained searches ourselves, here are our pro tips and common mistakes we see: 

  • There are times when you will want to partner with an external firm. We recommend you establish principles around when you will do so. We sometimes see companies trying to do the role themselves and eventually using a search firm, which results in burning through potentially great candidates and creating confusion in the market.

Common principles are: 

  • A role that the company hasn’t hired for before and needs a firm's expertise to help them scope and level it appropriately. 
  • A highly confidential role where there’s internal sensitivity to involve other leaders at the earlier stages.
  • The current team lacks the network. Examples could include a specific geography or skill set needed to change business direction.
  • Your team’s capacity could also be a limiting factor in how many roles you can work on at a time, but be careful to consider the capacity that your exec team has to hire for multiple roles at the same time. 
  • Define what level is considered an “exec” or “leadership role”. An unintended consequence of building an in-house team is creating tension between leadership recruiters and the broader recruiting team. Your recruiting team may feel like they have a relationship with these leaders, and this level of search is the work they crave. You can mitigate some of this behavior by creating clear definitions up front. A common starting point is VP and above or C-level minus one. 
  • If you are using an external firm: some text
    • Be sure you are choosing the search partner as much as the firm itself. Be clear on who is actually interfacing with clients and candidates. Larger firms may have a more senior person on the initial call but not be the actual search partner. You also want to be sure they align with your company’s culture and values.
    • Beware of the lowest cost option - it is often proportional to the quality of the experience and outcome.  
    • Don’t be the annoying middle person. You pay a lot for a firm’s experience and expertise. Don’t slow them down by insisting they work through you or over-involve you. Look for ways to accelerate their progress by removing roadblocks, aligning stakeholders, or avoiding hiring manager pet peeves.
    • Partner with a firm that has a process or an approach that you can learn from and replicate for future searches. At GBD, we always show the execs how alignment upfront is an advantage and leave behind a framework they can use on their next search. 

If you are considering investing in internal leadership recruiting resources and need help establishing the team or process, we’ve done this work with several companies and can help! And, of course, if you think you could benefit from GBD’s search expertise and network for a Head of People/CPO or Head of Recruiting role, we’d love to be your search partner!

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