Nonprofit employers have never faced such a competitive labor market in recent history. What we’ve been calling the Great Resignation is apparently actually a Great Reshuffle, as workers are leaving their jobs for new opportunities in related or new fields. Recruiting the right talent is becoming more challenging, and as a result, more nonprofit leaders are turning to executive search firms and staffing agencies for help. 

In 2022, Good Insight has accepted just 1 of every 3 search requests that we’ve received, despite tripling our team to keep up with demand. While we want to increase that rate, we are committed to delivering highly successful projects, which means we invest time and resources into each team member to gain clarity on our approach, our philosophy, and our tools.

Many of the requests we receive are from organizations that have not worked with search firms. While it’s an honor to be entrusted with this investment, we’re finding that many of these potential partners are unprepared for the work ahead. 

The old adage “90% of success is preparation and 10% is perspiration” is especially true with executive recruitment. A significant amount of that success lies with clients’ preparation, from having realistic timelines to understanding the investment in services. 

Are you considering retaining an executive search firm in the next year? This blog post outlines 4 things we hope every future client knows about retaining an executive search firm. Oh, and if you’re thinking you’d like to work with Good Insight soon, don’t delay reaching out to us! We are currently booking just 4 remaining engagements before the end of 2022. 

1. Your Timing Isn’t Realistic

Unrealistic timelines are the most frequent challenge for prospective clients. They expect that we can get started immediately — we’ve got a 6 to 8 week wait! — or they believe the whole project will take a month or two. 

It is important to plan with realistic timelines. An executive-level search typically takes four to six months from kick-off to the new hire joining. That includes a discovery period to refine the priorities of the position; a recruitment period that ranges from 4 to 8 weeks, depending on the difficulty to fill; multiple rounds of interviews; with an additional 4 to 6 weeks between accepting an offer and a start date.

Key Takeaway: plan ahead, starting far earlier than you think you should! 

2. This Salary Might Not Attract the Candidate You Want

Many prospective clients reach out to us after unsuccessfully trying it themselves. We commonly see that their challenge is due to a below-market salary. A recent study from the Pew Research Center showed that a job change increased an employee’s salary by 10%. No wonder we’re seeing so many people depart their current roles!

An executive search firm is not your magic bullet to finding professionals willing to work below market rate. Come into the process understanding your industry’s acceptable wages, or be willing to accept advice from your search partners. This is commonly harder than it seems because many nonprofit salaries have not kept up with the current cost of living. This may require you to reexamine your organization’s salary scales at the same time as making this new hire.

Key Takeaway: nonprofit professionals deserve and expect salaries commensurate with their talent and the cost of living in their area. 

3. Racially Diverse Candidates Requires Your Work, Not Just Our Rolodex

The number one question we get from prospective clients is about our ability to recruit racially diverse candidates. While Good Insight is proud of our placement rate — around 60% — we are equally proud of times when we’ve had honest conversations with clients who are not far along in their racial equity work to attract a BIPOC candidate. 

An effective search results in a mutual decision between employer and employee. The candidates we work with seek information about how our clients prioritize and invest in racial equity strategies. Many prospective clients can’t tell us details about this, which indicates to us that they are hoping this new hire will do that work for them. This is a harmful recruitment mindset that often results in tokenism or a microaggressive work environment, and ultimately the dissatisfaction of a new employee. 

While Good Insight works with organizations at all stages of their racial equity work, we are also very clear about the concerns, challenges, and feedback we receive as we pitch opportunities to candidates of color. Any firm’s Rolodex, recruitment strategy, and placement rates are a piece of the puzzle, but any organization planning a search project with a goal of recruiting for racial diversity should be heavily invested in equity work. 

Key Takeaway: be ready to tell your organization’s story about its racial equity work — wins and challenges.

4. Search Projects are a Large Investment

Prospective clients new to using search firms are routinely surprised by the costs of the projects. Executive search firms typically charge about a third of the incoming executive’s compensation, which may include bonuses and other benefits. Some firms charge additional administrative fees on top of that. Job advertisements and travel for candidates and search firms get billed back to the client too. A $150,000 executive-level role might have a project cost of $65,000 (consultant fee, job advertisements, candidate travel, etc.). 

The best firms will set flat fees to eliminate any conflict of interest with them helping you negotiate with your finalist (i.e., higher salary could mean higher pay-out for them). This also ensures that you can account for costs (no surprises!) and manage cash flow (plan for three installments). Some firms or independent consultants will work with reduced scopes of work at hourly rates, but be prepared that these rates can fluctuate from $150 to $300 an hour. 

Firms that focus on nonprofit clients know this is a pricey investment and won’t take that for granted. A common strategy is to approach a funder to help offset the cost; we see this frequently with CEO transitions. You’ll also want to understand a firm’s guarantee policy, typically a 6 to 12-month period where they will replace an executive that leaves the role.

Lesson learned: executive search can be an investment; plan for the costs in advance and seek outside support if you can. 

Looking ahead

In 2022, Good Insight will reach a new record as we support 20 nonprofits in their search for new E.D.s, CEOs, and other senior-level executives. Next year we plan on doubling that number. Stay tuned for updates as we continue to grow our team and launch a new service line, Search Support, to provide a cost-effective option for director-level roles at small nonprofits. 

About the Author

Carlyn Madden is the Founder and CEO of Good Insight, where she directs the firm’s strategy, business development efforts, and leads many of the firm’s CEO searches.