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The right executive team is crucial to your organization’s success. Chances are, as your company scales and needs change over time, so will your leadership team. A strong talent strategy will help you stay prepared for organizational change and future challenges.
For many CEOs, their executive talent strategy is rooted in traditional executive search practices. After all, traditional executive search firms have long been a popular choice for companies seeking to hire new leaders. Before you make your choice, however, consider that these firms often come with hidden costs that can impact your company’s financial health and operational efficiency.
Below, we explore a few key areas where these hidden costs can emerge—and how you can avoid them.
The Cost of Outdated Models
Traditional executive search firms rely heavily on their existing networks to find candidates. While this method can yield results, it limits the pool of potential candidates to those within their reach and can inadvertently favor primarily white and male leaders.
An overreliance on pre-existing connections doesn't just curb innovation; it can perpetuate unconscious bias and limit your access to exceptional talent. Whether it’s intentional or not, restricting your search to a limited network can mean you lose out on opportunities to benefit from fresh perspectives and dynamic leadership.
The Cost of An Extended Timeline
During a lengthy search process, existing employees may need to take on additional responsibilities to cover the gap in the team. The absence of a key leader can also result in slower decision-making processes and hindered strategic execution. These conditions can lead to burnout, decreased morale, and reduced productivity, which will affect long-term business performance and derail the organization’s goals.
The Bolster team prides itself on the fact that we move quickly—our clients are often able to interview their first candidate within days of kicking off a search, rather than waiting weeks or months. A faster search process requires less of your hiring team in the long term, and it means your organization can get back on track and grow toward your goals much faster.
The Cost of the Wrong Hire
Traditional executive search firms may not have an in-depth understanding of your specific needs and company culture, going off of industry standards and assumptions instead. This approach can lead to a mismatch, and unfortunately, a poor hiring decision at the executive level can have far-reaching consequences. Hiring the wrong executive could result in missed opportunities, ineffective leadership, or even a repeated search.
An ideal search partner will take the time to understand your entire team, company culture, and future needs. Bolster uses tools like executive archetypes or talent audits to pinpoint and find the exact leadership talent your team needs.
The Cost of Search Without Transparency
Traditional executive search firms charge substantial fees, usually between 25% to 35% of the executive’s first-year salary. These fees can be a significant financial burden, especially for smaller companies, but they can also impact the candidates you’re presented with. A traditional percentage-based fee incentivizes the firm to present you with higher-paid candidates.
At Bolster, our focus is on ensuring our clients and their candidates are treated fairly. Because we charge a flat fee, our business isn’t impacted by candidate compensation.
Avoiding Hidden Costs
When you’re aware of the potential pitfalls within the executive search process, you’re more likely to make better, more informed hiring decisions.
We believe a modern, tailored approach to executive search is the most effective way to build a successful leadership team.
Want to know more about what it’s like to work with us? Learn about getting started with an executive search partner, or book a time to chat with our team.
