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Headhunters Come Together to Endorse Ethical Selection

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[This article was originally published in Valor magazine, São Paulo (October 26th, 2011). Translated into English from Portuguese.]

According to Brian Glade, from the Association of Executive Search Consultants (AESC), companies that address executive selection as a simple commercial transaction must be fought.

A group formed by some of the most important and traditional high-profile-executive search companies working in the country has decided to combine efforts. The goal is to disseminate their work, thus protecting themselves against the competition of new recruiting companies specialized in middle management that are becoming more visible here.

The Association of Executive Search Consultants (AESC) was responsible for joining together around the same table the major executives of Amrop Panelli Motta Cabrera, Heidrick & Struggles, Russell Reynolds, Spencer Stuart, Fesa, Robert Wong, Abrahams Executive Search and Caccuri Consultores.

The companies above mentioned will be part of the first committee of the association in the country, launched this week by AESC’s Director Brian Glade. “I do not expect them to share all their best practices. It would be naive of me. But I know they want to restore the credibility in the industry of ‘executive search’ because it will add benefits to all of us”, said Glade to Valor magazine.

The committee leader will be Luiz Carlos Cabrera, founder-partner of Amrop Panelli Motta Cabrera. “In Brazil, there are many consultants who do not meet the ethical principles of the profession, but are gaining a large share of the market, leaving behind companies that carry out a high-quality job.”
The entity is present in 74 countries and relies on 300 associates around the world, with offices in New York and Brussels, and is very respected by the headhunters. In Brazil more than 20 enterprises take part in it. They have a strategic plan to widen their action in the country for the next five years. “We want to help educate the Brazilian market”, he says.

The committee intends to promote discussions and training courses as well as share information about Brazil with other countries. “Although the country moves in a slow pace at the moment, it is expected to grow a lot and we want to avoid the type of problems that we see in China today”, reflects Glade. He tells that in the Chinese market the companies’ retention rate is very low and, therefore, finding candidates is a much easier job. “Executives change their jobs every 18 months, and all you need is to offer money and a new position”.

Within this approach, companies that recruit candidates over the internet and are more interested in the possible profits than in combining the adequate candidates to the needs of their clients are gaining room in the market really fast”, he says.

Glade explains that the differential between a ‘retained search’ company and other forms of recruiting is that they work as a consultant for the client. “It is not only about finding a candidate, but also about understanding the company culture, knowing their business and conducting a deep research before appointing anyone. It is a short list and there is a strong confidence relation involved”, he stands out.

He criticizes the companies that only present names and address the selection job as a mere commercial transaction. Another point to differentiate is the payment conditions. While the ‘retained search’ companies may collect the payment either at the hiring of the job or divided in installments in a process that may take months, the other companies do it at the presentation of the candidates, which accelerates the entire process.
The industry of selecting executives operated approximately US$11 billion around the world this year. According to Glade, the figures are very stimulating and may overcome the year 2008, one of the best ever recorded in this industry.

To enlarge their incomes, most of these companies have provided, on top of high-profiled executive selection, services such as executive assessment, counseling, coaching or helping in the choice of the members who will integrate the managing boards. “This is a tendency”, says Glade.
Some of the companies, however, consider this diversification as the only way to assure profitability in the long run. “They say this is the industry future, which I think is too ambitious. Other companies showing awareness face this only as an additional value and know it will not be a major part of the business.”

Glade says it is difficult to predict the scenario for 2012. “The world is all connected. In the United States we are talking about a new recession, in Europe we see the difficulties with the euro”, he says. Although the overview is about uncertainty, he foresees a growth around 10% in the ‘executive search’ in countries in Asia as well as in Brazil.

According to the AESC’s Director, the most part of the contracts still comes from the American and European markets, but the biggest growth is centered in the emergent countries. “Over time they will surpass the more established and traditional ones”.

BlueSteps is the exclusive service of the AESC that puts senior executives on the radar screen of over 6,000 executive search professionals in over 70 countries. Be visible, and be considered for up to 50,000 opportunities handled by AESC search firms every year. Find out more at www.BlueSteps.com

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