Over 40% of Executive Searches Fail. What is the Cost and Implications?

For many organizations, when in recruitment/search for a senior leader, "Failure is not an option". According to ESIX (Executive Search Information Exchange), more than 40% of executive searches fail. What is the cost of not filling an important senior hire?

There are various implications depending on size of the organization and period of importance of business. If the failure happens within a large organization, the vacuum of the role will cause key decisions to be delayed causing million dollar plus projects/sales/initiative from moving forward, an interim or someone who is not well versed with the function can possibly make ill advised decisions with short term implications, tension builds with the team/function because a leader is not in place. Within small and mid size organizations, the vacuum of a senior leader will have potentially greater implications with key decisions pending/actions to be taken that would put the organization in a more vulnerable position in the long term. Its difficult to put an precise cost to the vacuum of senior hire which is one of the primary reasons that shields the urgency and importance of not hiring the senior leader in a timely manner.

So, why do executive search processes fail? A recruitment of a senior leader is much more complicated than most stakeholders want to acknowledge. The unfortunate ignorance of an effective search is permeated by the idea that executive recruiting is an effort based task vs an expertise based task. So you have one side that thinks they know recruiting (client) and the other side in general (recruiter) believe that more effort is needed. A bit blind of a leading the blind scenario.

Here is a general summary of a failed cost of a senior/executive recruitment:

• Time

• Loss of business due to delays or poor decisions made by interim

• Opportunity cost

• Negative function/team performance

• Loss of faith in recruiting/Cause desire to lower bar on next search

• Recruiting fees and staff time

• Weakened employer brand

For those clients that seek to salvage a bad search by lowering their bar and hiring who is available/remaining has other damaging implications.  Follow up in another article