An executive search firm is a professional services firm that helps organizations find and hire senior-level executives. The firm typically works with organizations on a retainer basis, and uses a variety of search methods to identify and attract potential candidates.
An executive search firm, also known as a headhunter, is a professional service firm that specializes in recruiting and placing senior-level executives in corporate, non-profit, and governmental organizations.
The executive search firm industry has its roots in the late 19th century when employment agencies began to appear in major US cities. The first of these agencies was Boston-based Locke & Liddell, which was founded in 1896. In the early days of the industry, executive search firms were often retained by companies to fill blue-collar and middle management positions. It wasn’t until after World War II that the industry began to focus on placing senior executives in companies. This shift began in part because many returning veterans were seeking management positions, and also because the US economy was booming and businesses were expanding rapidly. The early pioneers of the modern executive search industry include firms such as Heidrick & Struggles (founded in 1953) and Russell Reynolds Associates (founded in 1969). Today, there are thousands of executive search firms operating around the world, with varying degrees of size and specialization.
The largest global firms tend to be generalists, while smaller firms may specialize in certain industries or functional areas. Most executive search firms are privately held businesses; a few notable examples of publicly traded companies include Korn Ferry (KFY) and Spencer Stuart (SPST). The typical client for an executive search firm is a company or organization that is looking to fill a senior-level position, such as a CEO or CFO. In some cases, an organization may retain a firm to conduct an initial assessment of its leadership needs; this is typically done when an organization is undergoing significant change or growth.
Once engaged by a client, an executive search firm will typically begin by conducting extensive research on the target market for the open position. This research includes identifying potential candidates through sources such as LinkedIn and other social media platforms, as well as personal networks. After conducting this initial research phase, a short list of qualified candidates will be presented to the client for review; from there, the client will select a small number of candidates to move forward in the process. The next step usually involves conducting face-to-face interviews with each candidate; these interviews can either be conducted by representatives from the search firm or by members of the client organization’s management team. After completing all interviews, the final step is selecting one candidate who will be offered the job; this decision is made jointly by representatives from both the client organization and the search firm.
While most executive search firms operate in essentially the same way, "boutique" firms may have a slightly different model. Boutique executive search firms are generally smaller in size and more specialized in their focus than larger generalist firms.