So You've Decided to Build Internal Executive Search - Now What?

So You've Decided to Build Internal Executive Search - Now What?

The response to one of our recent articles on choosing your executive search approach (Should You Build An In-House Executive Search Function?) has been overwhelming. CEOs and CHROs from companies across industries have reached out with detailed questions about implementation - particularly around building internal capabilities.

The most common questions were "If we decide to go internal, how do we actually build something world-class?" and "What should we realistically expect from an internal function?"

"If we decide to go internal, how do we actually build something world-class?"

"What should we realistically expect from an internal function?"

Based on twenty years of executive search experience and of building up exec search organizations, here are some practical thoughts for companies that have decided internal executive search capabilities might align with their strategic needs.

When Internal Teams Deliver Real Value

First, let's be clear about when internal capabilities make the most sense. The sweet spot typically includes:

• Predictable search volume. Companies conducting eight or more senior searches annually often see compelling returns. Below that threshold, external partnerships usually make more economic sense when you factor in fully loaded costs.

• Cultural complexity. Organizations where cultural fit makes or breaks senior appointments - think transformation situations, unique cultures, or complex stakeholder environments - benefit significantly from internal expertise.

• Long-term talent intelligence needs. Companies wanting to build ongoing competitive intelligence about talent markets, compensation trends, and succession planning often find internal teams invaluable.

• Integration with broader talent strategy. Organizations with sophisticated succession planning, leadership development programs, and talent management functions see the greatest synergies.

The Unique Advantages: What Internal Teams Can Actually Deliver

Internal teams offer several advantages that external partners simply can't replicate:

Authentic Company Advocacy

When candidates talk to your internal search professional, they're getting the real story from someone who lives your culture daily. This authenticity often proves decisive when competing for top talent who have multiple opportunities. External recruiters can be polished, but they can't match the genuine enthusiasm and deep insights of someone who actually works there.

Competitive Intelligence That Compounds

Internal search professionals recruiting regularly from the same talent pools develop sophisticated understanding of competitor compensation structures, talent flows, and market dynamics. This intelligence improves with every search and feeds directly into broader business strategy.

An internal search team might identify a competitor's talent retention problems six months before it becomes public knowledge - intelligence that might prove valuable for both recruiting and business development.

Seamless Process Integration

Internal teams can customize search processes to fit your organization perfectly. They know which stakeholders really matter for different types of hires, how to navigate internal politics, and which decision-making quirks to accommodate. This insider knowledge often accelerates timelines and improves outcomes.

Long-term Relationship Building

External firms struggle to maintain cost-effective relationships with passive candidates over extended periods. Internal teams can build talent pipelines that activate when the right opportunities arise, often yielding higher-quality matches.

Building It Right: Key Success Factors

If you've decided internal capabilities make strategic sense, here's how to build something excellent rather than mediocre:

Start with the Right People

Everything depends on recruiting experienced search professionals who combine external search firm expertise with business sense. Look for people with proven track records from reputable search firms - they need to import the methodology, discipline, and standards that define excellent search practice.

Only in exceptional cases do we recommend to train internal HR people to do executive search. The skill sets are fundamentally different, and the credibility gap with external candidates might often be insurmountable.

Position Them as Strategic Partners

Internal search professionals need sufficient organizational authority to influence search specifications, challenge assumptions, and manage stakeholder expectations. If they're positioned as order-takers, you'll get mediocre results.

The best internal functions report directly to the CHRO or CEO and have a clear mandate to act as a strategic advisor and push back on unrealistic requirements or poorly defined searches.

Invest in Professional Infrastructure

World-class internal teams need research databases, candidate management systems, and market intelligence tools comparable to leading external firms. This isn't optional - professional tools enable professional results.

Budget for ongoing development, external benchmarking, and exposure to best practices from the broader search community. The landscape evolves rapidly.

Define Clear Scope and Boundaries

Without clear boundaries, internal functions get overwhelmed with non-executive searches that dilute their strategic impact. Define what they will and won't handle, and resist organizational pressure for scope creep.

What to Expect: Realistic Outcomes and Limitations

Be realistic about what internal teams can and can't deliver:

The Economics

A single experienced internal search professional can typically handle around 10-15 executive searches annually at total cost significantly below external search fees for equivalent mandates. However, this only works with sufficient volume - don't build internal capabilities just to save money on occasional searches.

The Limitations

Even exceptional internal search professionals can't develop deep expertise across all functional areas and industries. You'll still need external specialist expertise for certain searches.

Internal teams may face limitations providing completely objective counsel when organizational politics or internal relationships influence their recommendations. Sometimes you need external perspective to challenge internal assumptions.

Certain searches require external management for confidentiality - organizational restructuring, competitive dynamics, or sensitive succession planning often need market discretion that internal teams can't provide.

The Smart Approach: Strategic Hybrid Models

Most sophisticated organizations don't choose between internal and external - they develop clear criteria for when each approach serves them best.

• Internal teams handle: Succession-related searches, roles where cultural fit is paramount, quick turnarounds, and positions where deep company knowledge creates significant advantage.

• External partners tackle: CEO and board searches, major transformation hires, expansion into new markets, confidential situations, and searches requiring specialized networks or assessment expertise.

In a hybrid best-case scenario, internal teams can also enhance external partnerships by providing superior briefing, stakeholder management, and candidate experience.

Getting Started: A Practical Approach

If you're ready to explore internal capabilities:

• Start small. Hire one experienced search professional and a research team and equip them well to test the approach with appropriate searches. Learn what works in your environment before scaling.

• Define success clearly. Establish metrics beyond cost savings - quality of hire, time to fill, stakeholder satisfaction, and strategic impact matter more than immediate cost reduction.

• Plan for integration. Think through how internal search capabilities will connect with succession planning, leadership development, and broader talent strategy from day one.

• Maintain external relationships. Even with strong internal capabilities, you'll need external partners for certain searches. Don't burn bridges while building internal expertise.

An additional thought for external relationships: If you are deliberating between choosing a large global executive search firm or an executive search boutique, you might find some ideas on what might serve you better in When You Need A Shrek: Recognizing When Global Search Giants Make Sense and When Puss in Boots Outperforms the Ogre: When You Might Be Better Off With A Boutique.

The Bottom Line

Building internal executive search capabilities can deliver exceptional value when implemented strategically. The key is approaching it as a strategic capability investment rather than a cost-cutting exercise.

The organizations that succeed treat internal search professionals as strategic partners, invest in professional infrastructure, and maintain realistic expectations about what internal capabilities can and can't deliver.

Most importantly, they view internal capabilities as one element of a broader talent acquisition strategy rather than a replacement for all external partnerships.

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ABOUT THE AUTHOR

• Marion Heil is the founder and managing director of Board+CEO Advisors. She is based in Vienna.

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Building world-class internal executive search capabilities requires both strategic thinking and operational expertise. Whether you're exploring the feasibility of internal functions or optimizing existing capabilities, success typically benefits from guidance by professionals who understand both the strategic and operational dimensions of this investment.