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<p>Role of Executive Search Firms in Corporate Hiring</p> <p>Summer Internship</p> <p>Role of Executive Search Firms in Corporate Hiring</p> <p>Prepared by</p> <p>Ms. Iyer Radhika Murthy</p> <p>Masters in Management Studies (Semester II)Roll Number 11(In Partial fulfillment of the course curriculum of MMS, Mumbai University)Guided by</p> <p> Mr. Srinivas Nanduri (Director, India and Middle East Operations, Maxima Global Executive Search) Mrs. Gowri V Joshi (Core Faculty, Human Resources, SIESCOMS)</p> <p>DECLARATIONI hereby declare that this report titled Role of Executive Search Firms in Corporate Hiring is a record of independent research work carried out by me as part of project training during the period May 2005 June 2005 under the Supervision and Guidance of:</p> <p>Name of Guide: Mr. Srinivas Nanduri</p> <p>Designation: Director, India and Middle East Operations</p> <p>Organization: Maxima Global Executive Search, Bangalore.Name of Guide: Mrs. Gowri V Joshi</p> <p>Designation: Core Faculty, Human Resources</p> <p>Organization: SIESCOMS, Nerul, Navi Mumbai. All the inferences quoted are completely based on this study.</p> <p>Date ___________</p> <p>Signature ______________ </p> <p>CERTIFICATEThis is to certify that the project titled Role of Executive Search Firms in Corporate Hiring is a bonafide work done by Miss. Iyer Radhika Murthy of SIES College of Management Studies, Nerul (East), Navi Mumbai of First Year MMS, Semester II (Summer Internship) under guidance and supervision during the period May 2005 June 2005.Signature of Internal Guide (Maxima) &amp; Date - __________Signature of Faculty Guide&amp; Date -</p> <p> __________</p> <p>Signature of the Director of SIESCOMS &amp; Date -__________ </p> <p>PrefaceBusiness has become a roller coaster ride due to intense competition, both domestic and foreign, induced by rapid internationalization and globalization. Hence, there is a growing need for the development of an efficient managerial pool to meet the challenges of this extremely competitive industrial scenario at all levels in the organizations, right from the Junior Level to Senior Management Level. Also, there is no dearth of talent world over for companies to source for their requirements. However, it is very difficult for organizations to engage in all the sourcing activities by themselves because it is a time consuming process, while every moment is precious for them to compete and survive on their core activity or business in such a scenario.Hence, this activity of finding the right fit for the organizational requirements at least till the pre screening and screening rounds of the selection are being handed over to the specialists who perform these activities for companies for some consideration. These specialized agencies are Executive Search Firms or as they are known in common parlance, Placement / Recruitment Agencies. </p> <p>A Wise Man once said, Most resources are available to all companies. The great variable is the quality of theirmanagement as it determines why some companies fail and others succeed. This great person was Mr. Sydney Boyden, who later in the year 1946 founded Boyden Associates, and a Retained Executive Search Industry in New York. The Global Executive Search Firm Industry of about US$ 40 Billion comprises of Recruitment Agencies (60%), Job Boards and Websites, Contingency and Retained Executive Search Firms, etc. It is a highly fragmented industry with over 5000 firms in each of the categories stated before. Also, there is tremendous growth potential for this industry especially in the Banking &amp; Finance, Technology, and Pharmaceutical Industries due to continuous technological improvements and advancements as well as changing Patents regime in the years to come. </p> <p>This project is an attempt to understand The Role of such firms in Corporate Hiring, The Challenges in store for them and The Way Forward keeping in view the business of executive search firms with respect to who they are? How do they function? Are they same as consultants? When to use them? What proportion of corporate placement at the top level is done through these firms? How does the same vary across the different sectors and why? What are the value addition Search firms provide?</p> <p>AcknowledgementsThe author wishes to express her sincere gratitude to the following people, without the support of whom, this project would not have been possible:1. Mr. V. S. Kumar of Greenstar Consultants, for bringing the author, the prospect of performing this very extensive and interesting project. </p> <p>2. Mr. Srinivas Nanduri, Director Operations for Middle East and India, Maxima Global Executive Search Limited, and Industry Guide, for giving the author the opportunity to do this project and supported the author in any possible manner for all her information requirements with respect to the company and its operations.</p> <p>3. Ms. Vindhya from Maxima Global Executive Search Limited, for her timely correspondence and help with respect to the companys expectation from the project and the methodology to be followed.4. Professor Gowri Joshi, Internal / Faculty Guide from SIES College of Management Studies, Nerul, for her timely guidance, active support and assistance for completing this project successfully.</p> <p>5. Ms. Shirin Ara, Executive Abyss and Horizon Consultants, for providing an industry insight and practical procedures for corporate hiring.</p> <p>And Last but not the Least, all the people who prefer anonymity but without the cooperation of whom, this project would not have taken shape.Thank You Very Much!!Project Methodology</p> <p>The research was carried out in a two fold manner; i.e. Secondary research and Primary research. In course of Secondary Research, details were collected regarding Recruitment as a process, Recruitment Industry as on the year 2004 and expected growth areas, Models used by various agencies, Role of Executive Search firms in corporate Hiring, etc.Following the Secondary Research, Primary research was undertaken in some leading executive search firms and corporates about recruitment intermediaries they do business with, the proportion of recruitment conducted through these firms annually across different levels of management, their selection methods, etc. and perceived role of recruitment intermediaries. </p> <p>The details of Primary Research are as follows:Sample Size: a) 15 clients of Executive Search and Placement Firms in Mumbai</p> <p> b) 15 employees from five Executive Search Firms in Mumbai.</p> <p>Sampling Method: Convenience Sampling</p> <p>The study is an attempt to understand the role played by executive search firms in securing the best talent for the Top and Middle management positions for their clients in Mumbai. The study also attempts to understand the highly specialized tools Executive Search firms deploy in the process of Search, assessment on Personality, Emotional Intelligence, Integrity and Behavioral traits of professionals prior to the final selection.</p> <p>Executive Summary Introduction: </p> <p>The project as the title suggests deals with Executive Search Firms a specialised branch or type of Recruitment Consultancies. But, before looking into this topic in detail, the author wishes to elicit some background information about recruitment, the need for recruitment in corporates, the various sources of recruitment, the process of recruitment, and explain the present scenario as an introduction.</p> <p> Recruitment Consultancies An Insight:This topic provides us with an insight into what exactly are recruitment consultancies and the need for such firms, what are the various types of such consultancies globally, what are the various services they offer to their clientele, what is their margins in providing their services and a few successful firms in Mumbai as examples. Industry Watch:</p> <p>The author puts forth the industry statistics as on the year ending 2004, and states the major industries that could provide a boost to this industry in the coming years. Also, the author provides information about the nature of the industry and way it functions in this topic.</p> <p> Executive Search Firms An Insight:In this topic, the author explains Executive Search Firms in terms of the meaning, the need for these, the objectives of their existence, the functions that they perform, the services that they offer and the major players in and around Mumbai. </p> <p> Challenges posed in the Future:In this topic, the author elaborates on the various challenges that stare in the face of executive search firms in the current scenario and aims to find tangible and viable solutions for these institutions. Changing Role of Executive Search Firms:Taking cue from the previous topic, the author tries to identify the way ahead and states the changing role of executive search firms in the current industrial scenario. Live Example: Maxima Global Executive Search, Bangalore: </p> <p>In this topic, the author studies Maxima Global Executive Search Bangalore as her live example, in detail. The information about the company, the policies they have adopted and methodology they follow has been mentioned and analyzed to understand if there is any room for improvement.</p> <p> Research Findings, Analysis &amp; Way Ahead:In this topic, the author analyzes her research findings and provides a few recommendations to Executive Search Firms on a whole (with reference to Maxima Global Executive Search).</p> <p> Conclusion: </p> <p>In this topic,the author concludes the report with an ending note as Conclusion. </p> <p>ContentsSr. No.TopicPage No.</p> <p>01Introduction11</p> <p>02Recruitment Consultants An Insight </p> <p>22</p> <p>03Industry Watch28</p> <p>04Executive Search Firms An Insight </p> <p>32</p> <p>05Challenges posed in Future.39</p> <p>06Changing Role of Executive Search Firms41</p> <p>07Live Example: Maxima Global Executive Search 43</p> <p>08Research Findings, Analysis &amp; Way Ahead53</p> <p>09Conclusion59</p> <p>10Bibliography &amp; References.60</p> <p>Annexures </p> <p> 63 - 77</p> <p>IntroductionOrganizations carry out various business activities and have certain core and certain other support functions. Often, among the support functions are IT and HR. IT or Information Technology provides the organization with the necessary technology upgrades and most important Information which these days is vital for business success, while HR or Human Resources deals with the Human Aspect of Business right from identifying jobs in the organization, choosing the right people for the right job, ensuring the right salary package for the job, creating a conducive work environment, providing the training, monitor and review the performance of employees, etc. In this project, the author deals with Recruitment as a specific function of HR and the Role of Executive Search Firms a Specialised branch of Third Party Recruitment Consultants (a Source of recruitment to the organizations) in Corporate Hiring. Before coming to the actual topic under consideration, it is important that we know what is recruitment, what are the various available sources of recruitment to organizations, why is recruitment important, and how is it carried on i.e. the process of recruitment.</p> <p> Recruitment: Yoder defines Recruitment as It is a process to discover the sources of manpower to meet the requirements of the staffing schedule and to employ effective staffing measures for attracting that manpower in adequate numbers to facilitate effective selection of efficient workforce. It refers to the discovering of potential applicants for the actual or anticipated organizational vacanciesand is often regarded as that vital link that brings together those with jobs and those seeking jobs.Put very simply, Recruitment is the process of identifying that the organization needs to employ someone up to the point at which application forms for the post have arrived at the organization. </p> <p> Recruiting Yield Pyramid:The importance of recruitment by an organization and the reason why it is increasingly being outsourced can be illustrated by analyzing the Recruiting Yield Pyramid, which is the historical arithmetic relationships between recruitment leads and invitees, between invitees and interviews, between interviews and offers made and between offers made and offers accepted. </p> <p>The pyramid is shown below that illustrates the complex manner in which screening is done, the ratio of eliminations from the first pool and therefore the time and effort that needs to be invested in this process. The general ratios are as shown below:</p> <p> Sources of Recruitment:Recruiting individuals to fill particular posts within a business can be done either internally by recruitment within the firm, or externally by recruiting people from outside. Internal Sources of Recruitment is usually people from the existing staff members of the organization or their personal references. External Sources of Recruitment refers to the pool of candidates eligible for a given post from outside the organization through various ways such as assistance from recruitment consultants, by way of walk in candidates, etc.</p> <p>The Various Sources of Recruitment, both internal as well as external can be understood by the chart shown below:The advantages of internal recruitment are that:</p> <p>1. Considerable savings can be made. Individuals with inside knowledge of how a business operates will need shorter periods of training and time for 'fitting in'.</p> <p>2. The organization is unlikely to be greatly 'disrupted' by someone who is used to working with others in the organization.</p> <p>3. Internal promotion acts as an incentive to all staff to work harder within the organization.</p> <p>4. The risk attached to employing an outsider who may only be a success 'on paper' is minimized.</p> <p>The disadvantages of recruiting from within are that:</p> <p>1. Replacing a person promoted or transferred would entail considerable time, cost and effort if succession planning is not effectively carried out.</p> <p>2. An insider may be less likely to make the essential criticisms required to get the company working more effectively than an impartial third party or a new recruit. 3. Inflow of fresh ideas could be stifled.</p> <p>4. Promotion of one person in a company may upset someone else.</p> <p>The advantages of External recruitment are that:</p> <p>1. It makes it possible to draw upon a wider range of talent, and 2. Provides the opportunity to bring new experience and ideas in to the business. The disadvantages of recruiting from external sources are that:</p> <p>2. It is more costly, and 3. The company may end up with someone who proves to be less effective in practice than they did on paper and in the interview situation. </p> <p>Normally, companies prefer to follow the method shown in the next page for choosing their sources of recruitment:</p> <p>This is known as the Hunting Pyramid used mostly by Japanese Organizations for selecting their Sources of Recruitment. The process of selection of source steadily rises along the pyramid starting at the base due to various cost and other considerations such as the post f...</p>