Almost all finance and accounting recruitment firms make some claim to being able to find the “right fit” for their clients. Some firms tout a proprietary psychological / personality test they run candidates through. Other firms highlight their high degree of market / technical specialization.
However, as much as every placement agency advertises their mystical ability to find the “right fit” for their clients, what they don’t advertise is that their business models often preclude them from utilizing the single biggest determinant in finding the right fit.
Quantity Translates into Quality
Experience, market knowledge, technical expertise, proper interviewing technique and all the rest certainly play a role in determining the best fit CFO. However, before any of those factors come into play, the single biggest factor in finding the “right fit” for one’s clients is having enough good fits to choose from.
In order to gather a decent number of good fits, a recruiter needs to be able to intelligently canvas a very large number of potential candidates. Even if a placement agency has built up a very large in-house database, unless the client is looking for a fairly generic “plug and play” candidate, the odds are that the recruiter will still have to look outside of the database to garner a large enough pool of decent candidates from which to select the right fit for their client.
The Problem with the Contingency Model
Contingency firm recruiters may make a sincere effort to find the right fit for their client but their business model prohibits them from doing all the work that finding the right fit entails. Contingency fee recruiters are incented to place the people they currently know and although they will usually make some effort to source additional candidates, their business model favours expediency over thoroughness.
Let’s Look at the Numbers
To give you an idea of the number of potential candidates a recruiter should canvas to be able to select a short list that will be a fit for their client, let’s conduct an imaginary search for a CFO for a $60mm valve manufacturing company headquartered in Mississauga.
I’ve found in my thirty years of recruiting experience that one in six gainfully employed CFOs are willing to seriously consider another opportunity. So in order to get a decent number of candidates to interview I need to contact at least 100 CFOs who I think fit my client’s preferred candidate profile.
Start with 100, End Up with 15
So after I contact those 100 potential candidates, I’ll end up with about 15 people who’ll be interested in talking about making a career change.
Right off the hop, I’ll rule out five of those people for various reasons – location, spotty resume, personality not a fit etc.
Then we’ll do a first pass interview with the 10 remaining potential candidates where we screen for technical expertise, relevant industry experience, management style and so forth.
Down to Six
Out of those 10 interviews, we’ll probably decide that six candidates are generally a good fit and should be interviewed again. This time we’re mapping back specifically for all the points on the client’s preferred candidate profile.
Four Good Fits
If we’re lucky, we’ll find that four of the six are a very good fit and that will comprise our short list. And the only reason we have four candidates that are a good fit is that we started with a long list of 100 potential candidates.
All Hail the Right Fit
Everyone recruiter pays homage to the notion of the “right fit”, but in practice, most placement agencies settle for the “good enough” fit or the “this is what I’ve got” fit.
Since they work on a contingency fee model, it just doesn’t make economic sense for them to invest the time and effort to generate enough good fits so their client can hire the right fit.
Let’s Get Serious
If you’re really serious about finding the right fit, make sure that you’re working with a firm that has a business model that incents them to do the legwork and work the numbers that will actually produce the right fit. And generally speaking, no firm that works on a contingency fee basis has the incentive to go that extra mile.