Sometimes companies will ask the question directly when considering our search firm for their hiring needs. What is your experience in our industry? Other times it’s a bit more subtle. What industries do you work in? Prospective clients often use this information as a qualifier when evaluating a potential partnership with a search firm.

Conventional thinking is that working with a search firm that specializes in your industry will yield better results. Sounds great, doesn’t it? If only it was just that straightforward.

Yet, industry experience should matter, right? It definitely can and should be a factor in your evaluation process. However, basing a partnership decision on industry knowledge and experience alone can be just as limiting as working with a search firm outside your industry.

Here’s the bottom line. The value of partnering with a search firm from your industry ultimately depends on your definition of better results. Keep reading to learn when industry experience matters most, when other factors are more important, and the best evaluation criteria to consider.

When Search Firm Industry Experience Matters…and Doesn’t

Industry experience should be viewed as an influencing or secondary factor to other criteria in your selection process. This is because the experience of a firm isn’t what prompts you to outsource these services in the first place. However, it does impact important areas of consideration. Here’s how.

Your hiring needs

Why do you need to hire additional or new employees? Some businesses and industries in general experience seasonal spikes in demand creating a need for additional staff. Retail, manufacturing, and business services like accounting during tax season quickly come to mind. Another instance when short-term employees may be needed is to fill specific positions during maternity or medical leaves.

Because your need is immediate, you don’t have the luxury of a long onboarding process or the ability for detailed training. These situations call for employees to be able to immediately step into a role with a high degree of proficiency and experience. If you are using a search firm (in the broadest sense of the term) to fill these open positions, working with someone with direct experience in your industry is essential.

So what about the alternative? What if your needs are for permanent positions where the skills and experience-level of potential employees are most important? Cultural fit or having a more diverse pool of candidates may also be a priority for your organization.

In these circumstances, the ability of your prospective search firm to build a large candidate pool and effectively evaluate your options will be most important. More specifically, a proven process of sourcing and recruiting candidates will be much more valuable than the industries they typically work in.

When determining your specific hiring needs, remember this: the shorter the duration of your talent needs, the more industry experience matters. Conversely, the longer the duration of your potential hire, the more your focus should be to work with a search firm that can help you find the ideal balance of capabilities (talents) and competencies (tools).

Seniority-level of open positions

Next, consider the specific roles and seniority level you are hiring for. The more advanced the role (think vice-president level and above), the less important direct industry experience becomes. Here’s why.

As seniority-level increases, roles become more nuanced with more transferable skills. Organizations need members of their senior management to be strong in leadership, business acumen, analytical reasoning, and critical thinking. Experience in managing teams, projects, and strategic change takes priority over the CRM systems someone may have knowledge of or specific brands and product lines they have experience selling.

The experience of an executive search firm in sourcing, recruiting, and evaluating candidates at this level is far more vital and valuable to a hiring company than their history of working in the same industry as you. Your business goals and objectives play a larger role in finding your perfect-fit hire at this level, and your choice in search firms should reflect that more than first-hand industry knowledge.

The higher the seniority level, the less industry experience matters and the more recruiting experience for this caliber of talent does.

Type of search or recruitment firm

The final consideration in determining the value of industry experience for your search firm is the type of firm you work with. There is a broad range of talent acquisition services available, each with its unique focus and niche within the larger industry of employment services. The type of search firm or recruiting agency is where the previous criteria of hiring need and seniority level come together.

Here’s a condensed summary. Temporary, Staffing and Employment agencies assist companies in filling an immediate talent need for both limited and long-term needs. Employees sourced from these firms tend to be entry to mid-level in their careers. Since the ultimate goal is to assist their client companies in making the quickest placements possible, they excel in knowing the qualifications and responsibilities of the roles they seek to fill. As such, these agencies definitely should know your industry and business type for you to gain the most value from their services.

On the other side of the talent acquisition spectrum are recruitment and executive search firms. These agencies assist hiring companies with direct, permanent placements in roles that range from mid to senior-level positions. As such, they place a higher degree of attention on the recruitment and hiring process and their ability to understand the nuances of your business.

They act as consultants to hiring companies with services that expand beyond hiring to also include employee engagement, development, and company culture. Here talent and breadth of applicable experiences are more important than a grocery list of static skills. This shift in focus also means that their track record of successful hires is more important than the number of years they have been working in your industry.

The Best Ways to Evaluate Search Firms

Can industry experience matter in evaluating search firms? Yes. But it should never be your primary or only criteria on which you base your final decision. At the beginning, we shared that hiring companies often use this evaluating factor because they believe it will give them better results. As idyllic as that sounds it only works when you know what better means to you. In addition, pay attention to the details when vetting a potential search firm partner.

Define what better means to you

As far as definitions go, better isn’t all that hard to define or describe. However, it becomes incredibly challenging to measure since it’s subjective to our own experiences and expectations. What is important to you in a search firm and business partnership?

Consider the following variables to help you define your baseline of desired service, so you can frame and measure your definition.

  • Time to fill. Faster tends to be better, but only if quality is maintained. Consider the factors that impact the length of your recruiting and hiring process (role, current labor market, required skills and capabilities, etc.) and what can and cannot be directly influenced by your search firm.

  • Cost of services. A search firm may structure its fees as a contingency, retainer, or flat hourly rate. Understand how you are being charged and what a search firm is promising to provide you. Are they motivated by quantity or quality?

  • Size of the candidate pool. A larger pool of candidates means greater variability of skills and therefore the ability to tighten your qualification and selection process. Review the details of how a search firm sources candidates on your behalf. Including both active and passive candidates will help in hiring the right talent.

  • Quality of candidates. The cost of a bad hiring decision has a compounding effect. Sadly, most are caused by a series of missteps in the hiring process. Review the hiring and vetting process of any search firm under consideration.

Pay attention to the details

Before partnering with any business service, there are many factors to consider. Most differences though, settle on those small, but critical details. We consider these to be the most important when selecting a search firm. You will notice that industry experience isn’t one of them.

  • Type of agency. Know the differences between them and how each is structured to support their customers.

  • Talent acquisition process. Consider everything from your onboarding, to their sourcing, recruiting, and evaluation techniques.

  • Results. Know before you start what you need and want to accomplish. Can they deliver?

Should a search firm know your industry? That depends on you and your business needs.

Just looking at search firms with experience in your industry could mean getting the same look-alike candidates you have always been getting, especially if they don’t have a proven process of sourcing candidates. If you want to diversify your hiring then finding a company that doesn’t specialize in your industry can be helpful.

The best advice is to select someone you can easily communicate with, who matches your business goals, has a clear, defined process, and who will take the time to understand you. With this as the foundation of your evaluation process, you will get better results from your chosen search firm than industry experience alone

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