Research firms provide a strategic analysis of the marketplace, akin to corporate espionage but with the emphasis on human talent and their strategic roles. Oh and it's entirely legal - Put simply if you were the VP of a private equity firm and you wanted to know how a high ranking competitor had organised their team, who they had recruited, in what roles, how they were performing then you might speak to a research firm. Talent mapping at it's very best can allow an organisation to emulate a competitors success and avoid it's costly pitfalls - invaluable information especially if it's a new venture or an unfamiliar marketplace for the client in question.
Research firms operate differently from an executive search consultant or a generalist recruiter in that they don't manage the recruitment process. There's a great deal of informal referencing and they might analytically take apart the top performers on the market, speak to the key players and identify who would be open to an approach but unlike Executive search they won't hold your hand while you make that initial approach. Think of them as a consultancy and you won't go far wrong.
They paint you a picture of the marketplace built up through painstaking research which takes place over a far longer time period, usually three months minimum. Of course many executive search firms have their own in-house researchers. Essentially the business is won by the executive search consultant or firm who maintained the relationship - often juggling many similar relationships with clients on the same sector. The search itself then farmed out to the resource function. The research function would then carry out the actual search, taking the role to market and identifying suitable candidates for the client.
Some researchers may have the necessary skills to work directly with a corporate client, but can they compete with the all-round service and extensive networks that an established executive recruitment firm offers? The research function has long existed to support executive search firms with their workload. Traditionally, it was the job of the researcher to identify potential candidates who are not only looking for a new position, but also who match a client's profile.
The research industry has grown steadily, and firms that operate independently from recruitment consultancies have seen significant growth, especially during times of economic crisis. Natalie Jacobs, Commercial Director at research firm Seren PSG explains: "Research thrives in a poor economic climate, as HR strive to get VFM while achieving operational targets. During the last recession, research companies increased their market share. As businesses fight to survive, it's more important than ever to recruit and retain more of the right talent, so the intelligence that research companies can gather is invaluable."
According to Katherine Moody, MD of The Research Bank, the recession has led to a change in the way clients work: "In general, clients who have needed our help have asked us to work to much tighter deadlines and have needed information much faster than previously. In recent weeks, because of our networks, a number of clients have asked us to track down candidates who have experienced, or are likely to experience, redundancy. We certainly believe that in these historic and tough economic times all clients will look at cutting expenses and hence demand a lot more from suppliers. Good research firms should therefore be able to capitalise on this new environment."
The research function is essential to the recruitment process, but does it prove more effective to work directly with a research firm rather than a recruitment consultancy?
Jason Hassall, Managing Director of executive research firm Hassall Gill, believes that when considering the two, it is important to remember the pros and cons of each "Whilst using a research company provides significant cost savings, this can be a false economy with the client interviewing a much higher percentage of people who, whilst they look good on paper, do not have the soft skills necessary for the role or have the right fit culturally. Additionally, most researchers are not equipped to provide the high level strategic input of a search consultant." Hassall goes on to explain that one of the most significant advantages of using research over search is cost, an all-important factor in recent times: "The current economic downturn is going to have a significant impact on how search is conducted with more and more corporate firms looking to drive down costs. Search firms will be chasing fewer assignments, fees will be cut and inevitably purse strings will tighten. I think the next few years will see more research firms change their business model and work more and more with direct corporate clients or face going out of business." It may seem like an attractive, cost-effective option but can research firms really compete with recruitment consultancies in working directly with a client? If time is of the essence and a candidate is needed quickly, a search firm will be able to draw on its established networks and resources to fulfil the requirement.
Tracey Alper, Director of Business Development for executive recruitment firm WH Marks Sattin, states: "If a client's CFO is leaving and they need a replacement quickly, perhaps someone who can start within three months or less, you haven't got time to start headhunting people from scratch. You have to work to your client's time scale and by the time you've found someone, approached and met them, then arranged meetings with the client, you're out of time.
But if you're dealing with somebody in the team here, who has worked at the right level in the sector for some time, they know exactly the right people to approach straight away." Another problem that can arise when working directly with research firms is that the client is aware of what a recruitment firm does, but may not be entirely familiar with the research process. "This means researchers are having to try and educate HR and line management on the nuances of managing search candidates," says Hassall. "As a result, you see a much higher number of candidates dropping out or being 'bought back' by their current employers. How can you understand and influence a candidate if you have never even met them?" Kirk explains: "The most important part of the process is understanding the client's real requirements, above and beyond the role specification. You can only find the right candidates if you are fully briefed about the skills, experience and qualities that the employer is looking for."
Ross Crook, Head of Executive Resourcing, UK Retail Bank, Barclays believes that research firms can provide invaluable support to an in-house team: "When considering working with a research firm we wondered whether it would require more time and involvement from myself and my resourcing to team to develop and manage candidates. In practice the level of service has felt no different. The main difference has been the flexible transparent approach, added value market intelligence, time to hire reduction and significantly reduced cost."
So should recruitment firms feel challenged by the rise of research firms working directly with clients? It seems their reign may be threatened by firms like Seren PSG, who demonstrate that they are "equally good at executive search and strategic talent planning, which is exactly what companies need to do to ride the tide of recession."
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