How AI will impact the executive search industry
I remember in the late 90s when Korn Ferry unveiled Futurestep and Heidrick & Struggles developed Leaders Online. Both of these opened new doors for job seekers; everyone could simply fill in their profiles through the online form submission.
At the time, I thought these online services would revolutionize the executive search industry – or, perhaps, even kill it. Computers could match profiles instantly, and human interaction would diminish. Needless to say, I couldn´t have been more wrong. Heidrick & Struggles later ended Leaders Online, and Korn Ferry transformed Futurestep into a recruitment process outsourcing service.
I have since viewed all technical changes to our industry with a dismissive smile; from my perspective, as long as the hiring decision is done by a human, the technical revolutions continue to support the old process. This is also my view with Artificial Intelligence; regardless of the great benefits and improvements offered by AI, executive search still requires the human touch.
Let us begin by examining some of the great benefits of AI in executive search, which are already proving to be quite significant:
Data Analysis. The executive search industry has always valued data. We gather it before a mandate, during a search, and after a placement. However, the enrichment of data has not been part of our past, and this is a new offering from AI. For example, AI could look at a candidate’s history, determine their background does not align with the open position, and automatically remove this candidate from the long list. This efficiency would dramatically expedite the shortlisting process.
Process Improvement. AI supports and improves processes by linking data points from various sources and proposing conclusions. Humans do this now, but it takes an inordinate amount of time, energy, and skill. AI accomplishes this task much more quickly and efficiently.
Targeting. When we set out to find a new executive, we determine the necessary skill set for the position and industries likely to yield the best candidates. We then move forward to identify target companies. These phases will benefit immensely from Artificial Intelligence, which can proceed through these steps more quickly and efficiently. AI will help search executives by identifying the right executives who are at the right point in their careers.
Predicting the Future. Predicting the future has always been the toughest trade, and this is what our search industry does. We are finding and recommending the selection of a future executive, and AI is getting better and better at predicting the success of executives in new positions.
While benefits abound, I also see two obstacles to the effective use of AI in the executive search industry:
Connecting Data. The biggest obstacle is a familiar one for humans: The data is in silos; databases on candidates, companies and success factors are not linked. This prohibits our industry from playing with AI and experimenting with what works. As data becomes more interconnected, executive search teams will reap greater benefits by applying AI in their processes.
It’s Personal. The third obstacle of AI in executive search is that executive search is and always will be personal; in spite of AI, the search and recruitment industry revolves around personal experience. There are different levels and angles to success. One simple example is the time spent in one executive position: too short and you can’t initiate the change, too long and you will yourself become a barrier of change. The optimal duration depends on the business, task, situation, market, etc. These are points AI will never be able to solve, and only humans can process effectively.
In terms of how AI will exceed human capabilities, I predict AI will first revolutionize research. It is becoming more difficult for an executive search firm to defend taking several weeks to conduct initial desk research; this is not only true for executive search, but also for many other consulting industries.
At the other end of the search process, there is one thing that AI will never replace: salary negotiations. The final decision regarding the level of compensation will probably always have an element of Bruce Springsteen´s Human Touch song: “I got a deal for you right here”. Salary negotiations are always best left to the hiring executive and candidate in a personal and face-to-face setting; it is unlikely that AI will become an active participant in this final stage.
Between initial research and salary negotiations are many complex and variable steps in executive search, some of which may be satisfied with new algorithms and technologies, others that may be complemented by a combination of AI and human processes. While obstacles remain, the benefits of AI in executive search offer great potential for executive search professionals, clients, and candidates alike. Stanton Chase is heavily invested in exploring AI more in depth, and we will keep you updated while we proceed.
About the Author: Mikael Stelander is a Partner in the Helsinki office.