Executive Search Business Model in Question
Is the business model for retained executive search "broken"? A recent article in Talent Management explores the issues. Some thoughts …
Executive search has similar problems to other professional service businesses — like law, accounting, or consulting. The partner sells the business, but then hands it off to a junior associate to do the work. Then the client gets the bill and wonders what value they are really getting. Then the client sees the expenses tacked on to the fees and wonder even more.
The business model issues for executive search firms lie in their organizational structure. Revenue from retained search feeds the beast — not revenue from other value added services. Do hybrid models really work from the client's perspective? Is it clear that the client gets more value by combining executive search with other consulting services? Or does the client get more value by unbundling and getting the best experts in separate domains. Time will tell.
