An astonishingly rotten way of hiring anyone
Opinion: employing a professional services firm is all about back-covering
When the contest is between the big firms it is especially pointless. Photograph: Getty Images
Some time ago I sat on a committee that had the job of hiring a headhunter. For the best part of a day we shut ourselves into a room in the City of London with quantities of coffee and superior biscuits and listened to one presentation after another from rival firms.
Four teams turned up to pitch. One had just two members, another as many as four. All were easy on the eye. All were smartly tailored, and friendly in that professional way that is slightly chilling. Each team had a PowerPoint presentation, which they ground their way through, assuring us of their “unprecedented global network” and “deep industry expertise”. By the end of the day I had acquired four fat presentation packs with printouts of slides on the heaviest, glossiest paper – all of which went straight into the shredder.
There was no good reason for choosing any one of these headhunters over any other, but a choice had to be made nevertheless. So I found myself disqualifying one firm simply because its lead man said “grow the talent pool”, thus combining three of my least favourite words in a single phrase, and slightly preferring another firm because its presentation was marginally shorter.
This pantomime is an astonishingly rotten way of hiring anyone. But it is how lawyers, consultants, advertising agencies, PR firms, banks, brokers and auditors routinely scramble over each other to get work.
The first thing wrong with it is cost. Three people on my committee each wasted a day. Each firm wasted several days preparing and then travelling to the presentation. The cost itself wouldn’t matter if a good decision resulted. The reason companies go through with this charade is that they pay so much money to their advisers, it seems important to know they are spending it wisely. However, this daft process merely adds to the cost base, and must make fees higher still. A “fair” process had been adhered to with a result that everyone lost out.
From such a system, the decision will always be poor. The winner is inevitably the one that pitches best, but being good at pitching is not necessarily related to being good at headhunting, the law, banking, advertising, or any of the skills you are trying to buy.
When the contest is between the big firms it is especially pointless. There is nothing to choose between EY or KMPG. Nor between JPMorgan and Goldman Sachs, or Linklaters and Freshfields. All hire exactly the same sort of people. They do exactly the same sort of work for the same sorts of clients and charge exactly the same fees for it. If all clients picked the firms they employed with a pin, the world would be a more efficient place.