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<body topmargin=0 leftmargin=0 marginheight=0 marginwidth=0> <table cellpadding=0 cellspacing=0 border=0><tr> <td valign="top" colspan=2 height=82 BGCOLOR="#000033" TEXT="#F7F7FF"> <div> <FONT SIZE="5" COLOR="#FFFFCC" FACE="Georgia" ><B>Ansley Consulting Group</B></FONT><FONT SIZE="5" COLOR="#FFFFCC" FACE="Arial" ><B> </B></FONT><B>    |</B><B>   </B><FONT SIZE="3" COLOR="#FFFFCC" FACE="Arial" ><B> </B></FONT><FONT SIZE="3" COLOR="#FFFFCC" FACE="Copperplate Gothic Bold" ><B> </B><A HREF="index.htm" TARGET="_top" TITLE="Ansley Consulting Group"><U><B>home</B></U></A></FONT></div> <div> <A HREF="id19.htm" TARGET="_top" TITLE="ABOUT US"><U><B>ABOUT US</B></U></A><B>   |   </B><A HREF="id55.htm" TARGET="_top" TITLE="ATLANTA"><U><B>ATLANTA</B></U></A><B>   |   </B><A HREF="id3.htm" TARGET="_top" TITLE="CHICAGO"><U><B>CHICAGO</B></U></A><B>   |   </B><A HREF="id4.htm" TARGET="_top" TITLE="DALLAS"><U><B>DALLAS</B></U></A><B>   |   </B><A HREF="id6.htm" TARGET="_top" TITLE="NEW YORK HQ"><U><B>NEW YORK - HQ</B></U></A></div> <div> </div> </td> </tr><tr> <td valign="top" width=210 BGCOLOR="#999966" TEXT="#080000"> <div> <A HREF="id54.htm" TARGET="_top" TITLE="CONSULTANTS"><U><B>CONSULTANTS</B></U></A></div> <div> <A HREF="id21.htm" TARGET="_top" TITLE="REFERENCES"><U><B>REFERENCES</B></U></A></div> <div> <A HREF="id22.htm" TARGET="_top" TITLE="JOB SEEKERS"><U><B>JOB SEEKERS</B></U></A></div> <div> <TABLE BORDER="8" CELLPADDING="4" CELLSPACING="3" WIDTH="119" BORDERCOLORLIGHT="#000033" BORDERCOLORDARK="#000033" FRAME="BOX" RULES="ALL" HSPACE="0" VSPACE="0" BGCOLOR=#FFFF99 > <tR> <tD VALIGN=TOP HEIGHT= 189 WIDTH="87"><div> Ansley Consulting</div> <div> <IMG SRC="8445a970.jpg" border=0 width="90" height="151" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"> Est. 1999-Atlanta</div> </tD> </tR> </TABLE></div> <bR> <bR> </td> <td valign="top" height=398 BGCOLOR="#FFFFCC" TEXT="#080000"> <div> <B><U>--Type Title Here--</U></B></div> <bR> <div> <B>It's Time for a New Executive Search Model</B></div> <div> <B>By Jim Hicks - September 2005</B></div> <bR> <div> Traditionally, there have been only two executive search models: retained and contingency. We at The Ansley Consulting Group believe that it is time for a change. The change should feature an uncommon spirit of teamwork between consultant and client and should provide for each step of the search process to be conducted by the team member best equipped to handle it.  It also should provide for a through, professional search to be conducted on a timely basis and at a reasonable cost. First, a quick review of the two traditional executive search models:</div> <bR> <DIV ALIGN="LEFT"></DIV> <div> Traditional Executive Search Models</div> <bR> <div> <B><U>Retained Search.</U></B> The client selects one search firm to recruit an executive for a specific position.  The client agrees to pay a fee equal to one-third of the new executive's first year cash compensation with the invoicing schedule being one-third of the fee up front, the second third after 30 days and the final third 60 days after the project begins. Since the average search takes over four months, the client typically has paid for the entire search assignment well before the newly recruited executive starts work. If the new exec begins with a $240,000 starting salary and a $120,000 bonus, the search fee works out to the tidy sum of $120,000. There are several glaring weaknesses in this particular model: </div> <div> <IMG BORDER="0" SRC="Symb075c00b700f000000000.png" HEIGHT="16" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">The search firm gets rewarded for introducing only the more expensive candidates and also receives a bigger fee if he/she helps negotiate a larger total compensation package for the new executive. </div> <div> <IMG BORDER="0" SRC="Symb075c00b700f000000000.png" HEIGHT="16" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">If the client becomes dissatisfied and fires the search firm after 45 days, they may have already paid $80,000 of the $120,000 fee and would have received absolutely zero value for that investment. </div> <div> <IMG BORDER="0" SRC="Symb075c00b700f000000000.png" HEIGHT="16" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">Finally, this traditional fee level is just simply not justified in today's environment. </div> <div> Not wanting to get ripped off, many companies have decided to address these inherent weaknesses by choosing to do the search themselves or choosing to give the assignment to several "contingency" firms; figuring they will not have to pay a penny unless they actually hire someone.</div> <div> <B><U>Contingency Recruiting</U></B><B>.</B>  This type of recruiting is sort of like playing the lottery for the search firm.  They can search their database, make a few phone calls and submit some resumes to the client.  Even though they are oftentimes competing with the client and other firms for the placement, they occasionally get lucky and "win" a $50,000 fee after expending less than 20 hours of work. The client, on the other hand, feels that by giving the assignment to several firms, that they will get better coverage while only having to pay one fee. With a typical fee as high as 25 or 30% of base compensation, the client ends up paying the price of a retained search but is getting nowhere near the service. As we see it, the inherent drawbacks of contingency search are many:</div> <bR> <div> 1.  The recruiting firm tends to search their database as opposed to searching the marketplace and proactively seeking out the superstars.  Since they never know if they are going to get paid a single penny for their efforts, the contingency firms simply can't afford to engage heavily in the time-consuming task of networking and sourcing for the truly exceptional candidates.</div> <div> 2.  This approach simply does not promote teamwork between consultant and client.  The client continues to advertise the position and seek to generate candidates on their own while the outside consultant is quickly trying to get as many potential candidates in the door as possible. </div> <div> 3.  This approach typically yields candidates who are actively looking to make a change and have circulated their resumes in the marketplace. The superstars; however, are oftentimes happily engaged with their current employers and are unlikely to appear on the radar screen of the typical contingency firm. </div> <div> 4.  Normally, the search firm does not interview the candidate, does not write an assessment report, and only sends a resume to the client. </div> <div> 5.  With "unscreened" resumes coming through the door, the client tends to waste the valuable time of many of their executives going through the laborious and costly task of bringing in a large number of candidates for multiple interviews. </div> <div> 6.  Ultimately, the client gets tired of all of the above, becomes prone to compromise the quality of the executive to be hired and simply moves into the "let's just get somebody hired" mode.  </div> <div> 7.  When a candidate finally gets hired, some lucky recruiter "wins the lottery" and gets paid way too much money for the work actually expended on any particular assignment.</div> <div> 8.  Frequently, the client will pay as much or more for the contingency model than for the fixed-fee retained model presented next.</div> <bR> <DIV ALIGN="LEFT"></DIV> <div> The Historical Executive Search Model at Ansley Consulting</div> <bR> <div> At Ansley Consulting, we have tried to minimize the weaknesses of the above two models by establishing a fixed fee based on the work content, difficulty and value; and then establishing a more reasonable billing schedule.  Here is how a typical search currently works at Ansley Consulting:</div> <bR> <div> 1.  In the earlier example, we used $240,000 as the starting base salary with a projected bonus of $120,000.   We recently conducted a search at this level and established a fixed, retained fee up front of $48,000 (our minimum fee is $30,000).  </div> <div> 2.  Our billing schedule was one-third ($16,000) up front, the second third after 45 days, and the final third when the successful candidate accepted the offer.  </div> <div> 3.  With this billing schedule, our client had time to find out if they were happy with our work before having to pay 2/3 of the fee.</div> <div> 4.  By making the final payment contingent on a successful completion, the client was protected against having to pay the full fee without recruiting anyone.</div> <div> 5.  Over the years, our fixed fee approach has typically yielded total fees in the range of 15 to 25% of the new exec's total first-year cash compensation.  In the above example, our fee worked out to be just under 15%.  </div> <div> <I> </I></div> <DIV ALIGN="LEFT"></DIV> <div> Developing A New Executive Search Model</div> <bR> <div> Recently, a client asked us to take on a project under a different arrangement.  He said that he knew practically everyone in his industry and that he had already made up a list of eight potential candidates.  He asked us for a proposal to take on the assignment that would consist of several phases:</div> <bR> <div> 1.  Make discrete contact with the eight individuals, arrange to interview if there was an interest on the part of the candidate, prepare an assessment document and review all of the above with the client.</div> <div> 2.  Depending on the results of step one, the client would then decide if he wanted to try to hire one of the candidates or if he wanted to have us generate more candidates.</div> <div> 3.  As it worked out, after less than 30 days, the client asked us to generate more candidates beyond the original eight.  Finally, after the client interviewed a total of four candidates, he ended up hiring one of the original eight.  The successful candidate started to work 3.5 months from the day the assignment began.</div> <bR> <div> Our original proposal had provided for a number of different outcomes, including the one that took place.  Our fee worked out to be 15% of the total first year cash compensation.</div> <bR> <div> The above example illustrates a completely new way that clients and consultants can pool their resources to reach an optimal result.  After reviewing these thoughts with several clients, we decided to produce this document as a discussion tool to use when considering alternative executive search models.  In designing our new model, we want to ensure that we have an efficient process that provides for a healthy level of teamwork and communication for all concerned.  As we consider new ways to execute the search process, let's first identify the various elements:</div> <bR> <div> <B><U>1.  Identifying potential candidates</U></B>.  Names of potential candidates can come from many places:  consultant database, client database, internet posting, newspaper ads, and proactive networking.  </div> <div> <B><U>2.  Initiating Contact with the candidate</U></B>.  Once we have names and contact information, we must carefully decide who will make that first telephone call.  Since you only get one chance to make a good impression, we want to do all that we can to enable us to actually get through to the target executive.  Then we want to maximize our chances of generating some interest on his/her part.  When contacting senior executives by phone, we want to make sure that we use the most appropriate team member to make the call.</div> <div> <B><U>3.  Conducting the first interview/assessing talent and fit</U></B>.  After generating the interest, we now arrange to sit down for an hour or two for that first interview face-to-face.  This is where we go through the background and compare it to the specifications for the job.  We then prepare an assessment report describing the candidate's suitability and fit for the position.</div> <div> <B><U>4.  Selling the opportunity early in the process</U></B>.  Sometimes as early as the initial phone call, we subtly begin the sales process; and certainly do so during the screening interviews if we feel that the candidate could be a superstar.  Just in case our client wants to hire the candidate, we feel that it is our responsibility to keep the interest level high.  </div> <div> <B><U>5.  Relentless follow-up to keep the process moving</U></B>.  One of the most common problems is that the process drags out for so long that the candidate begins to feel like the client is not that interested.  We strive to keep the communications lines open and sometimes encourage our clients to periodically reach out and make direct contact with particularly interesting candidates.   </div> <div> <B><U>6.  Reference checking and personality assessment</U></B>.  These are tedious details that we take pride in doing well.  We have seen the reference checking eliminate some candidates and spark greater client interest in others.</div> <div> <B><U>7.  Negotiation with the chosen candidate</U></B>.  This tends to be a delicate process.  Many times the candidate has never looked for a job before and may come across in a manner that disturbs the client.  We prefer to serve as the mediator during this process; we can identify the needs of both parties and work to develop a satisfactory solution.  Operating on a fixed fee, our clients never fear that we may work to unnecessarily enrich the candidate's compensation package. </div> <div> <B><U>8.  Closing the deal.</U></B>  This goes back to the relentless follow-up mentioned in #5.  Decision time can be emotional for both parties, and the client can become annoyed if the candidate takes too long to make his/her decision to join.  Our role is to make sure that both sides stay in close communication until the deal is closed.  Even after a candidate accepts the position, we always continue to follow-up closely through the resignation stage, which oftentimes triggers a counter-offer.</div> <bR> <DIV ALIGN="LEFT"></DIV> <div> ******************************************</div> <bR> <div> <IMG BORDER="0" SRC="Symb075c00b7011866000000.png" HEIGHT="19" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">We feel that the client and search firm should work as partners in such a manner that the entire process is seamless to the candidates.</div> <bR> <div> <IMG BORDER="0" SRC="Symb075c00b7011866000000.png" HEIGHT="19" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">So, how can we package the above eight steps in order to promote more teamwork, expediency and value for our clients?</div> <bR> <div> <IMG BORDER="0" SRC="Symb075c00b7011866000000.png" HEIGHT="19" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">We are flexible; it all depends on the needs and interests of our client.</div> <bR> <div> <IMG BORDER="0" SRC="Symb075c00b7011866000000.png" HEIGHT="19" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">We welcome a discussion to explore those needs and interests.</div> <bR> <div> <B><U>The Ansley Consulting Group</U></B><FONT SIZE="3" COLOR="#000000" FACE="Book Antiqua" ><B> </B></FONT></div> <div> --Delivering Value Well Beyond Executive Search--</div> <bR> <bR> </td> </tr></table></body>