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Executive search firms in India redesigning business model: experts

Source: NDTV Profit
Posted Date: 2013-12-23

New Delhi: With varying economic situations hitting the corporate sectors, the executive search industry is redesigning its business model to suit the economic variations, experts say.

 

The executive search industry has two major types of practitioners -- the retained search firms and contingency search firms.

 

Contingent search firms charge only when a candidate is selected, while retained search firms charge an advance of 33 per cent, then 33 per cent when the profiles are shortlisted and balance on closure.

 

The slowdown has brought about a lot of changes where companies have started looking more towards contingent search firms, experts believe.

 

However, there has been no significant slowdown on senior management requirements as a company cannot manage without having the right senior managers in place.

 

"Executive search firms have long been used by big businesses but more small and mid-sized firms are realising that they can also benefit from paying these consultants to help draft accurate and enticing job descriptions, generate a pool of qualified candidates for top-level jobs, vet references, and speed the hiring process," Mancer Consulting CEO Satya D Sinha said.

 

Amid current economic scenario, the retained search firms these days are becoming more accountable for the searches these days moreover they are also offering free replacement after six months of placing the CEO.

 

"The reason is primarily the cost factor, Contingent being way more economical, quicker as many consultants engaged and much more competitive because of the success dependant fee is now being seen as a more viable option," Spectrum Talent Management director Vidur Gupta said.

 

Considering that these search firms are taking extra efforts to meet the target, the average fee per executive search assignment, however, has not increased from the same period a year earlier.