MANILA, Philippines - A group of executive search consultants are cautioning bank and non-bank financial institutions in their selection of “head hunters” for their top executive personnel requirements.
Executive search consulting is a specialized form of management consulting that assists organizations to define and recruit for senior management positions.
This executive recruitment is different from other types of recruiting in that it is performed only under contract and on an exclusive basis.
Philippine Association of Executive Search Professionals Inc. (PAESPI) vice president and founding member Babes T. Guevara said that demand for high-quality senior executives has kept executive search consultants busy.
“We have had so many requests (contracts) from the pharmaceutical industry, agricultural and agricultural scientists, executive chefs for international airlines, banks and other financial institutions,” Guevara, who also heads High Integrity for Recruiting Executives (HIRE), said.
There is likewise strong demand from such sectors as the business process outsourcing (BPO), human resources, sales and marketing, general managers, property and construction.
But the proliferation of executive search consultants and individuals has affected the integrity of the profession, thus the negative connotation of “head hunters.”
Then there is social media and the Internet that has made profiling an almost public domain. The privacy, or secrecy, of the prospective executive is critical.
Another factor that has dictated on the proliferation of players, said to number over 80, in the executive search industry is the absence of a government regulator, much less a self-regulatory organization (SRO) like the Philippine Stock Exchange (PSE).
The PAESPI strongly advocates a code of ethics in the local search practice.
Without a set of guidelines, or code of conduct, or code of ethics, Guevara fears that unprofessional and unethical executive recruitment could result in economic and individual damage.
Matching is critical, according to the association vice president.
Thus the executive search consultant must have an intimate knowledge of the company in need of a recruit, and the basket of prospective executives.
A bank specializing in trade finance cannot get an executive that specializes in retail banking.
Executive search consultants earn through fixed fees or a certain percentage of the promised annual salary of the target executive.
A consultant receives a down payment as the “search” starts, and a partial bill once a candidate is under probation.
The consultant receives the full balance once the candidate is recruited. The practice is often referred to as retainer’s fee.
“If the candidate is rejected, we will retain the down payment and partial bill only,” Guevara explained.
Lately, some consultants don’t ask for any fees but gets the full payment when the candidate is accepted. It is now referred to as a “contingency.”
The danger here is unethical practices, such as submission of a number candidates, some of which were not even consulted.