Best Practices for Nonprofits When Selecting a Search Firm

Several ingredients go into building strong nonprofit organizations. Given the potential of what the right people in senior leadership roles can accomplish, organizations need to invest both the time and resources necessary to attract and assimilate those leaders.

When attracting senior leaders, organizations have the option to lead their searches internally (i.e., through personal networks, board, and staff) or to engage professional assistance. This guide focuses on the latter option to provide guidance to HR leaders, boards, and executive directors seeking to utilize professional help during a senior management search.

What is the role of an executive search firm?

Executive search firms have professional recruiters with training and expertise in a range of recruiting activities. Expertise can include designing an equitable process; identifying the core responsibilities and qualifications needed for the role; writing job descriptions; developing a deep, diverse candidate pool; assessing how candidates’ skills, experience, and personalities match up against the open position; conducting reference checks; and providing advice on the negotiation process between the organization and the final candidate. 

What are the benefits of working with an executive search firm?

Organizations typically engage the expertise of search firms when they are facing new situations or challenges. Examples might include: an organization is expanding into other locations and must attract candidates with expertise in program replication; or a new leadership role—say, a chief operating officer—is being created for the first time. 

Regardless of the situation, working with search firms can offer the following benefits to the hiring team:

• Identification of qualified and motivated candidates. A search firm can develop an outreach strategy to identify candidates outside of an organization’s networks. This may include a strategy for placing advertisements and/or research and active networking to connect with candidates, including those not actively job hunting.
• Functional or other expertise. Many search firms will have particular areas of expertise. It might be focused on a specific area of service (e.g., higher education or healthcare), specific geography, or a particular function (e.g., executive directors, chief financial officers, chief operating officers, development directors, etc.).
• Third-party objectivity. A search firm is an objective participant in the process. As such, the assigned consultants should be able to flag issues as they arise. This can be particularly helpful in cases where the search committee is divided on the ideal leader profile. Third-party objectivity and neutrality in presenting examples are also useful when conducting references on potential candidates.
• Efficient processes. Working with search firms can free up the valuable time of the board and/or executive director. For example, search firms can create helpful—and—resume screen and interview tools to save time and create a better outcome.
• Confidentiality. Especially for a chief executive officer search, it can be helpful for a small number of employees or board members to know of a candidate’s interest to protect that leader in the event they aren’t chosen. 

How do search firms work?

There are several factors to consider when looking for the right search firm for your organization. Search firms can vary significantly by size, ranging from large firms to independent consultants. They may have an international, national, regional, or local focus. Some firms are generalists, while others may specialize, for example, a nonprofit executive search firms. Firms also vary in the way they offer services and in the way they bill the client for those services. Retained search firms typically provide the whole range of search services as a package, including executing the search process, managing the search committee, and doing reference checks. For this type of search, an organization pays a fee, typically one-third of the position’s salary plus expenses related to the search. Because their reputation as a firm is dependent on their clients’ satisfaction, retained firms have a strong motivation to work on even very complex searches until they are completed. However, the client commits to pay the fee regardless of whether or not the retained firm finds and recruits a successful candidate. In a retained search, the client also commits to work exclusively with that particular firm.

Other search firms work on a contingency basis. Contingency firms do not generally provide consultative services but instead, focus on generating potential candidates to fill a position. The client may use multiple contingency recruiters for the same position and only pays a search firm if the firm finds a successful candidate. While recruiters at a retained firm are salaried, individual recruiters at a contingency firm are compensated when they identify and present a successful candidate to a client. They may be competing with other contingency recruiters to find and place successful candidates, even in their own office. Contingency firms typically rely on their database of job candidates, reaching out to their networks to quickly fill the search. That may result in straightforward, easier-to-close searches receiving higher priority than more complex searches, such as those for senior positions. 

When deciding between a retained and a contingency firm, you should consider what type of relationship you need to have with the search firm. Will you need advice and support throughout the search? Do you need help designing an inclusive process? How hard will it be to find – and attract – a leader with the skills and experience you’re seeking? Is it important for you to have one recruiter consistently representing your organization throughout the search, or is it acceptable for candidates to get multiple calls from multiple recruiters? 

Find out which recruiters at the search firms will be working on your search and exactly what their roles will be in the process. The recruiter you choose will be working on your behalf and representing your organization’s mission, values, and goals. Searches can be a valuable time to cultivate new and existing relationships. It is a good idea to examine the expertise of the recruiters at each firm. Typically, retained firms have more experience with senior-level executive searches, while contingency firms focus more on junior- and mid-level managers. 

Before selecting and working with a search firm, what should you do?

Before an organization selects a search firm, it should undertake the following actions to facilitate the selection process:

• Create the draft outline of the ideal position description and candidate profile. Creating the draft will help facilitate the process of selecting the type of firm best for the organization (e.g., does the candidate profile require a local or a regional/national search?) and guide the initial stages of the search process.
• Organize the stakeholders involved in the recruitment process. For an executive director role, a search committee should be composed of board members and, if appropriate, members of the senior management team and external stakeholders. It’s critical to design a process to: hear input from front-line staff or, where applicable, program participants; and ensure that decision-makers are invested. 

How should an organization select a search firm?

The goal is for the relationship between the organization’s search committee and the search firm’s consultant to be based on trust and communication. The time spent upfront by the search committee to carefully vet and select the right firm can be as critical to achieving the best outcome as interviewing and referencing the candidates. Once the initial job description is created and the committee is formed, there are three major steps to selecting a search firm.

• Step I. Build the short-list of potential search firms. Often a good first step in the process is to talk with colleagues and associates to identify the firms or individual consultants they have worked within the past. While compiling the list, assess their experiences. It’s just as important to talk about the consultant as it is to talk about the firm. Questions for references might include:
• What kind of position were you seeking to fill?
• What impressed you the most about this firm/consultant?
• How did working with this firm compare to other experiences you have had in hiring senior management?
• Describe the process your organization followed when developing the job description.
• If the search committee drafted a job description before the search engagement, how did it differ from the original specification (i.e., what was the contribution of the executive search consultant)?
• Did you get outstanding candidates whom you might not have engaged on your own?
• How well did the search consultant represent your organization to sources and candidates?
• How accessible was the search consultant?
• Is there anything else you would like to share about the experience that you think would be helpful?
• Step II. Request proposals from and interview the short-listed firms. Once an organization has narrowed down the firms it may want to work with; there are two key components to consider before making a final decision:
• How does the firm design for equity and inclusion? 
• How does the firm build its candidate pool? The search committee will want to ask: Is this firm tapped into the networks needed for a successful outcome? What is the firm's commitment to not just reply on known networks but to tap into networks of emerging and BIPOC leaders?
• Who will be working on the search at every step of the process? For example, who will carry out the initial research? Do the outreach to initial candidates (this is especially important because this person is often the first contact with the candidate and plays a significant role in getting great candidates to the table). Who will interview candidates, especially short-listed ones?
  
  
• Step III. Ask the firm for references.
  When asking for references, of course, try to speak with a former client who led a similar search to yours but also consider speaking with a candidate. Questions you might consider:
  • What were your diversity and equity goals on the search and how did X approach meeting those goals?
  • Where did X excel the most: process design? building a robust candidate pool? managing your stakeholders? 
  • What could X have done better or anticipated better in the search?
  • What did candidates say about their work with X?

Once an organization has engaged a search firm, then what?

Once an organization has chosen a search firm, three steps can help the recruiting process go smoothly:

• Identify communication methods. The search committee and the search professional should establish clear lines of communication that allow key points to be brought to bear. For example, as the search professional meets with candidates, s/he may discover that the salary is too low to attract the caliber of candidate the organization desires. It is advisable to have a weekly phone or email update with the executive search consultant to go over ground covered, issues raised, market feedback, and progress.
• Establish clear roles for everyone involved in the recruitment process. The search committee and the search professional should ensure that all participants know their roles. If participants have never worked with a search firm before, provide an overview of the process to set expectations. For example, what will each person’s responsibilities be? Who will be involved in resume reviews, short-list interviews, and final interviews? Establishing these guidelines upfront will ensure a better result.
• Explore who can and cannot be contacted. It is essential to discuss off-limits issues with the search firm, so clear expectations are set immediately around who can or cannot be reached out to (is it okay to contact funders or past employees?). Developing an off-limits list will help protect relationships and networks as the firm builds a candidate pool. Questions to discuss include:

• Where can these firms search, or not, given existing client relationships?
• Where would the organization not like the search firm to look? Which individuals cannot be contacted for this role? 

Concluding thoughts

Recruiting the right people into the right senior leadership roles is not easy; it is a process that requires investments of time and other resources. However, the results can have a significant impact on an organization and the nonprofit sector.

A prior version of this article originally appeared on Bridgespan.org. Impact Opportunity would like to thank Kathleen Yazbak for her work in writing and updating this article. Kathleen is the Founder and President of Viewcrest Advisors an executive search firm that identifies transformative leaders who build organizations that deliver ambitious social outcomes.