6 Trends and Challenges Facing Search Firms


Running a company without challenges — it is an impossible dream.

Service industry has always faced challenges—raking in clients to scaling revenue. Challenges never seem to end. Recruitment firms are no different.

They are always facing challenges. And a few recent ones are just up and showing themselves. Well, some challenges have just persisted for a long time and are likely not going away. So let’s explore these challenges and —

Pricing models
Most clients simply don’t get along with pricing  model. Clients seem to not just work with retainer model, instead they want to work on a contingency basis. Of course, they want to avoid the risk of failure and end up with no filled positions. But here’s the fact—fill ratio (the percentage of filled positions) is 60-80 percent for a retained agency, while 20 percent for a adhoc job.

Retainer pricing model, where clients are obligated to pay even when they haven’t seen a single candidate, is loss situation for them. So clients naturally hate that.

Multiple online platforms have emerged and Linkedin is the top amongst them. There are numerous other startups that have come up with online platforms. It’s common knowledge that start-ups and artificial intelligence with its superior capabilities has replaced some of the human tasks. It has made strides in recruitment as well. However, as long as people are involved in recruitment, search firms will stay.

In-house recruiters
It is a fact that in-house recruiters understand company culture better than external recruiters and they can fill some of the positions much faster. However, external recruiters can come handy if an undercover approach is needed. Times when transactional fee was given is over.

The best scenario, however, will be when internal and external recruiter work together – to meet the best interest of candidate and hiring manager.


Talent is flowing freely throughout the world. Work from home policies, growing need for remote teams have made hiring talent very easy. Companies are ready to hire from across the world as long as they get good talent. As external recruiters we need to understand this trend and build our knowledge of local as well as international market.

Stagnant revenues from core business
As much as may we want, we want to generate our complete revenue from executive search business. Truth is top recruitment companies generate 50 percent of their revenue from leadership consulting.

If we want to scale revenue, it is important that we embrace other roles too. Advisory, assessment, coaching can be a part of the recruitment agency and can further generate revenue.

No bars.

In almost every country, entry as a recruiter is easy. No licenses required. Since the barrier is low, anyone can become a recruiter. Given this, external recruitment has also got a bad name among those who have had a bad experience.

It up to us to keep thriving and do better work to turn the tarnished image of external recruitment into an elegant one.

There you have them – six trends and challenges that top executive search companies are facing. If you want to grow your executive search agency, start catching up on the trends and overcoming the challenges mentioned.

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