by Jim Gibson

(This article originally appeared in Healthcare Musings in November 2011)

February 2019 – Last month’s article discussed how finding and attracting good people is Job #1 of the successful CEO. There are many ways to do this, and the methods vary according to circumstances. A common approach – and one that is often misunderstood – is to engage a search firm.

As mentioned, search firms and recruiters seem a dime a dozen. Most everyone has received a recruiter call as a potential candidate. However, as hiring managers, about half the CEO’s I’ve observed have used search firms extensively and the other half range from having never engaged a firm to having used a few contingency recruiters.

Most know the two most common models are contingency recruiting and retained search. These are very different and should not be used interchangeably. Generally, contingency recruiting is used for lower level, lower compensation positions. Retained search is reserved for higher level positions that are considered key hires. In most healthcare companies, this equates to Director / VP and higher. Sales can go either way, depending on the compensation level and tenure of the ideal candidate.

Regardless of the model, the selection process should focus on the one criterion that most ensures success.

In the past, the search firm selection process focused on the prospective firm’s candidate database – who they know. This is still important, and our database is still the first place we look for candidates. But it’s not as important as it used to be.

Although we remain intimately involved from the beginning of a search through its completion, the bulk of a search consultant’s work and value takes place during the recruitment phase, leading up to the presentation of the candidates.

From the time a search begins until candidates are presented, a recruiter performs three functions: finding the candidates; selling them on the opportunity; and qualifying them.

Before considering these functions, it’s important to realize that, over the past few years, the healthcare recruiting game has changed a lot. For one thing, experienced talent is in great demand due to ARRA, ICD-10, health reform, and other systemic drivers of demand. It has become a candidate’s market and will likely stay that way for the foreseeable future.

The other phenomenon is the widespread use of LinkedIn. With persistence, patience, and some readily available know-how, anybody can find candidates. Anybody – experienced recruiter, neophyte, anybody. So if a candidate database was a competitive edge, it no longer is.

The single most important thing a search firm does for a client is sell the opportunity. That’s what recruiting is. It’s convincing someone, usually gainfully employed, to consider changing employers. To forfeit the known for the unknown, with nothing less important than one’s livelihood. The word “recruiting” takes on its true meaning when viewed in this context, especially in a tight labor market like healthcare.

This requires painting a captivating picture for the candidate. It’s quickly and succinctly conveying the business problem or need in a way that brings the client’s solution to life. During the initial contact, when we may be granted only five or ten minutes to grab the candidate’s attention, we must leave him wanting more. I remember a COO search I was doing for a payor software company. The CEO was open to someone with either payor or provider experience. I spoke with a number of provider candidates who really had no idea of the issues inside the walls of a health plan. As I was explaining the issues and their implications – drawing the candidate in – I remember thinking that the task would have been much more difficult if I hadn’t worked for a health plan for nine years.

In subsequent interactions, considerably longer and more in-depth, and after the candidate has had a chance to research the organization, we will often be grilled. Candidates will test the recruiter for credibility. The stronger the candidate, the tougher the questions. Savvy candidates will want to go deep with a search consultant, exploring nuanced issues and sometimes playing Devil’s Advocate with the client’s value proposition, competitive positioning, etc. They can tell whether a recruiter truly understands the business or whether she is parroting back what the client said. In contrast to my previous example, suppose I tried to recruit for a technical position, like a programmer. It wouldn’t take too many questions before a candidate realized I was trying to fake it.

If we do understand the client’s business well enough to sell the opportunity, we should be able to effectively qualify candidates. Of course, it helps to have a rigorous pre-search discovery process to help the hiring team arrive at a consensus ideal candidate profile.

So, when interviewing search firms, focus on their ability to sell the opportunity. Think of how well you can sell your company, your vision, and your solution. Insist that the recruiter be able to paint the picture nearly as well. You might even want to role-play, with the search consultant calling you, the candidate. If you’re not sold, move on. The best candidates won’t be sold either.

About Jim Gibson

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