Recently, Business Standard reported publications by IMF and World Bank to point out that both these institutions have raised the FY25 GDP estimates for India to 7%, up from an earlier 6.6% growth projection. That’s great now, because, as the economy grows, industrial growth will continue and corporates will have a chance to boost their own growth rates.

One of the key fuels for such a growth is human resources talent, especially CEOs, CFOs and the broader CXO team. While India has more than 3.3 million registered firms, our own research using CMIE ProwessIQ shows that there are only ~1700 firms with Rs 1000c (approx $125M) or more turnover. So, where are the corporates to find new leaders to fuel the growth?

 That’s where firms like us come into the picture. We and our fellow competitors, making up the Executive Search space, help clients find their next CEO, CFO or a CXO.

 But how is this executive search market structured? Which are the best search firms for hiring CXOs? How to go about engaging an executive search firm?

 You will find below some guidelines to help with the next steps. That said, if you still have doubts as you are likely to, do not hesitate to contact us at enquiry@resource-bridge.com to speak to us – we help anyone seeking information without expecting any commercial engagement.

1. The Structure of the Executive Search Industry

Knowing what options exist in the market will help you make optimal decisions, in terms of the service and support you can get vs the costs you are likely to incur.

Broadly, if you are looking to hire, there are two types of firms that are available – one, the traditional recruitment or placement firm and two, the executive search firm. So, how are these two different? Like chalk and cheese. 

Placement or Recruitment Consultants/Firms

Placement firms or recruitment firms typically support in hiring at the junior (e.g., Purchase Executive, Territory Managers) and middle management levels (e.g., Plant Head, RSM).

Their revenue model is typically tied only to successful placement, which means that you get billed only if the placement happens. And, they also charge you lesser, typically 8.33% to 16.67% of the CTC. They also don’t mind working alongside another placement firm on the same mandate, at the same time, which means you have multiple firms pulling weight. All good, so far.

The flip side to the above is that the moment the agency senses that the placement is not likely to happen, they will simply stop servicing your need and move on to another client, another mandate. Placement firms make money only when the mandate is quickly closed – so if the search is likely to take more time or the probability of selection comes down, they will lose money and almost all the firms will quietly stop servicing. And, because of the nature of the industry, the people executing the search are also not that senior and hence, are not in position to engage with a CEO or CFO or any CXO, on a peer-to-peer basis, which is essential to get the best candidates out there.

So, placement firms are good for junior to middle management levels, in roles that are standard (e.g., RSM, Plant Head) and do not require nuanced understanding of the role.

However, if you are looking for a CEO, CFO or CXO, or if the role is critical or if the role needs a nuanced understanding, you will need to onboard a search firm. 

Executive Search firms

Executive search firms, or simply search firms, are the ‘performance cars’ equivalent when it comes to hiring. The search firms work on exclusive basis (meaning, they work with you only if they are the only agency working on the specific mandate) and charge 2-5x more than placement firms. Besides these, executive search firms also have minimum billing expectation and charge an upfront retainer to take up the work. 

For this higher fees, you get sustained and high quality search, casting the net wider and deeper; candidate conversations that are led by senior people – meaning, the conversations with potential candidates are on a peer-to-peer level and candidate evaluation is sharper; the search firms filter the candidates and bring you just 3-5 candidates who will most likely make the final cut, thus saving you loads of time and energy; support you with insights and advice on structuring the offer and generally stay more invested in the entire process. Search firms support their clients all through the process and make it seamless and effortless for you. In addition, because of their ability to keep things under wrap even while reaching out to a wider set of candidates, search firms are almost always relied upon for senior management hiring. If you are hiring a CEO, CFO or a CXO, or if you are trying to convey to the market your seriousness and criticality of the hire, then executive search firm should be your only option. 

2. Notable firms in the Executive Search space

Even within the Executive Search space, you have further options – you can consider a broader, ‘do-all‘ firm or a specialized and focused executive search firm, like ours. 

Do-all firms cater to every single CXO role – if you need a CEO, or a CFO, or a Chief Legal Officer or any other role in between, they will take up and service that need. On the other hand, specialists like us, focus on 1-2 industries or focus on 1-2 roles – for instance, as a specialized executive search firm, we focus only on CEO and CFO hiring, where we have completed 100+ mandates in the last 4-5 years, in just these two roles.

Specialist firms like us bring immense depth, candidate reach and specialized skill sets to the table and even though smaller to the larger, MNC, do-all firms, when it comes to the CEO or CFO roles that we specialize in, we give a run to these larger firms. It is not too uncommon for the clients to first try with do-all firms and then come to us!

Some of the best known do-all executive search firms

HuntScanlon regularly publishes the top 50 executive search firms in the US. The top 10 in the recent list include the following:

1. Korn Ferry  has 3 offices in India
2. Spencer Stuart has 3 offices in India
3. Russell Reynolds  has 2 offices in India
4. Heidrick & Struggles  has 3 offices in India
5. Egon Zehnder has 3 offices in India
6. DHR Global  has 3 offices in India

It is worthy to note that 4 of the top 10 firms – True Search, Diversified Search Group, ZRG Partners and WittKiefer – are not present in India! Further, even these larger firms have just 2-3 offices. In general, firms in executive search tend to be small, with 15-30 member teams considered a good size. These international firms, with their global office network, become the natural choice for most MNCs and in turn, their mindset is also more tuned to the MNC world. 

Of course, you also have firms like EMA Partners (4 offices) which are not in the HuntScanlon list but is present in India.

That said, the absence or vacuum is met by a large number of small firms and even individuals operating in this space.

Some of the well-known specialist executive search firms

As mentioned elsewhere, the market also has specialist executive search firms that focus on 1-2 markets/roles and bring deep capabilities in the chosen space. Some firms in this category are:

1. Resource Bridge, specializes in just CEO and CFO hiring, across industries. Brings wide reach and connect in these two spaces. Has 1 office in Mumbai, with a team of ~20.
2. Vahura, specializes in just legal roles, across industries.

 If you are looking for large firm capabilities or significantly better, in a smaller, nimbler and responsive manner, then the specialized firms are the way to go. 

3. What to look for when engaging a search firm

Irrespective of which role (CEO, CFO or one of the other CXOs), there are some commonalities to client requirements:

1. Clients demand that the search for candidates is wide and deep – they want the search firm to have considered all the candidates there are, not just the active ones. Naturally, the search firm must have a really good research capability, reflected in the background of the partners who will be running the search, their standing in the CXO community and, the overall systems and processes.

2. Clients also demand that the process be wide and deep but discrete at the same time! This is possible only if the partner really knows the market – for instance, how many CFOs is the partner connected to? If you spoke to a few CFOs, how many of them will instantly recognize the partner?

3. Clients may not fully appreciate or recognize the need up front, but as the mandate progresses, you will need professional support – is the executive search firm capable enough AND invested enough in your mandate, to support you with insights and tips?  For example, we have run workshops with executive council team to make the picks. We have also presented and guided the board in finalizing the pick. We have also run the entire offer development on behalf of our client, under their guidance. Your search partner must be able AND willing to do all this.

4. In our experience of successfully delivering 100+ CEO and CFO mandates in just the last 4-5 years, we know the importance of your search partner believing in you, your business and your cause, and in persevering in the search – the search process may undergo twists and turns, and you do not want your partner to turn around and say that they cannot support you or worse still, start soft pedalling, an accusation that is thrown at the larger, do-all firms mentioned above.

While the cost or professional fee is important, do not let that only guide you in your choice of the search consultant. Almost all the good firms charge in a similar band – hence your choice should be driven by your personal assessment of the soft factors mentioned above!

Good luck.

Article by @Ramadhurai K