McKinney Consulting’s Steve McKinney Highlights the Disadvantages and Hidden Costs of Not Hiring Executive Search Firms

Finding the right candidate to fill a vacancy in the executive ranks can be a complicated and time-consuming process. While some businesses may prefer to promote from within the organization, this is not always feasible for several reasons. There may be a lack of qualified or willing internal candidates, a strong need for specialized skills, or a conscious effort from leadership to introduce external viewpoints to shake up the organization and improve diversity, among others.

Many businesses hire executive search firms to find the right candidates to fill these roles, utilizing their expertise and extensive network in professional circles. Executive search companies also get to know their clients closely to gain an understanding of the vacant position, clearly define the competencies needed to do the job successfully, and create a profile that candidates must fit as closely as possible. However, some companies are hesitant to work with an executive search firm, believing it’s not worth the cost and effort.

According to Steve McKinney, Founder and President of Seoul-based executive search and coaching firm McKinney Consulting, companies who do not work with an executive search firm when recruiting senior management externally face several disadvantages.

One such pain point is that hiring from outside presents a higher degree of risk and uncertainty, and many companies are not fully equipped to navigate this intricate landscape. While they have human resources or talent acquisition departments, these are often focused on hiring for sub-executive to middle management roles instead of presidents/vice presidents, directors, or C-suite executives. Candidate evaluation for these roles is much more advanced, and thoroughly examining and assessing the candidate’s skills, experience, and cultural fit can be time-consuming and resource-intensive. Additionally, negotiating compensation packages, managing counter offers, and finalizing offer deals can be complex and require specialized expertise.

With the huge impact senior management roles have in a company, McKinney says hiring the wrong candidate could incur huge costs, some of which aren’t apparent to businesses and their stakeholders. This mistake can be detrimental to both the financial and non-financial aspects of the organization. The more obvious losses include recruitment and onboarding costs, as well as salaries and severance pay. There is also lost productivity, and it might take several months to find a replacement. This could also leave a department or division without a qualified leader, resulting in a loss of direction or coordination.

Getting the wrong person for the job can also impact the organization’s reputation with clients and the general public, as well as contribute to low morale among the workforce, leading to decreased job satisfaction and increased turnover in a negative work environment, especially since one of the most common reasons for leaving a job is the boss. McKinney says that all of these contribute to the worsened performance of a business, likely leading to lost revenue and stunted growth potential.

“Some companies are hesitant about engaging an executive search firm because they’re afraid the wrong candidate will be hired,” McKinney adds. “But that’s counterintuitive because executive search professionals are experts in their field – just like accountants, lawyers, or doctors – so they’re more likely going to make a better hiring decision. We represent our clients and work for their interests. If we suspect that the candidate is not being fully truthful during the background and reference checks, we dig deeper, as it’s our reputation on the line. Furthermore, most reputable executive search firms have a guarantee period. If a placement doesn’t work out for certain reasons within that period, the executive search firm will conduct another search, free of charge.”

Since 2001, McKinney Consulting has been placing C-suite and other senior executives for global companies across various industries. It is part of Kestria, the world’s largest executive search alliance, representing South Korea. Having served as head of footwear product development at one of the largest global athletic apparel and footwear brands, Steve McKinney is an expert in working with multinational teams. His extensive global experience gives him unique insight into cross-cultural dynamics, helping ensure a cultural fit between candidates and businesses.

“On both the client side and the candidate side, cultural fit is extremely important. Both parties also need to be honest with each other,” McKinney says. “In my more than 20 years in this industry, I’ve seen people fail because they are not aligned with their company’s culture, but once they join an organization with a culture they fit, they begin thriving and become superstars.”

This inspired McKinney to develop the Success Factors coaching program, which analyzes participants’ skills, backgrounds, and experiences. The program helps them identify the various unique qualities and factors that can help them succeed, similar to a fingerprint. By learning these factors and creating a ‘success thread,’ participants – whether hiring business leaders or candidates – will know what they need to succeed and what characteristics they need to look for in a potential employee or employer.

“Having the right match between company and candidate is extremely important, as the wrong hire can do a lot of damage, while the right person can bring the organization to new heights,” McKinney concludes. “Having placed candidates in companies of all sizes, from small & medium enterprises to Fortune 500 organizations, our expertise helps ensure the right person gets hired, bringing the right mix of experience, skills, and cultural fit.”