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2024-04-19

Executive Search for the Family Office Ecosystem

Attracting people for opportunities in the family office sector is not a difficult task. However, what can be particularly challenging is identifying transformational leaders who have the right blend of expertise, emotional intelligence and aligned values to propel the organization forward. Not all recruitment firms have the strategy or resources to properly identify leaders with the expertise and mindset to effectively navigate a family office or business. In our view, it takes a diligent and thoughtful approach to find and assess potential leaders to support family offices and the important entities within their ecosystems. At Stryde Search, we believe that all family offices should proactively build a relationship with an executive search firm for the countless benefits this partnership can offer.

Here are a few of the reasons why executive search is a great fit for family offices and their portfolio companies:

Access to a passive candidate network: our understanding from the hundreds of conversations we have with senior talent, is that the family office space is full of candidates who are passively looking for or open to exploring a better aligned opportunity. Their reasons are varied but often cited are a lack of room for career advancement, absence of a succession plan/unclear path for the future and a desire for more stimulating work. These senior candidates are usually high performers and guard their time and privacy carefully. An executive search firm can take out the legwork of finding leading experts and present a shortlist of appropriate candidates that would not be found otherwise.

Creates a diverse candidate pool: a search firm can research in a broad and in-depth way for the right talent using a range of tools and databases. Most importantly, reaching out to target audiences in a personalized way makes a difference when engaging busy executives. This thorough, high-touch approach makes it possible to attract a diverse group of candidates and allows the organization to calibrate performance benchmarks against the market.

Objective assessment: given the personal nature of working for a family via the family office, foundation or portfolio company, it is essential to obtain an objective, unbiased perspective on candidates who are being evaluated for a role. Having a trusted search partner who can conduct thorough interviews, ask challenging questions about a person’s track record, and provide insight on how they compare to other candidates in the market can be invaluable to decision-making.

A proactive, planned approach: in the family office world, it is beneficial to start planning for a new/replacement hire a year ahead if the hiring need is anticipated rather than sudden. A search firm can guide you through the appropriate steps from role definition, briefing, search, offer negotiation, and onboarding, and put a plan of action together at the start of the process. Taking a planned, considered approach avoids rushing a decision, and helps with any handover and continuity of service for family members.

Mutual commitment: even though there is usually the cost of an initial retainer, the dedicated, expert resource of an executive search firm should mean mutual commitment to results and avoid liaising with multiple firms. This means there is less for a family office to manage internally. A trusted partner should present you with a carefully curated shortlist of candidates to move forward with.

Confidentiality: this is particularly important for family offices that do not want to broadcast that they’re looking for a new executive hire. An executive search firm can work discreetly and confidentially, using NDAs where necessary to ensure all parties feel comfortable moving through a selection process.

Positioning: an executive search firm that knows your family well, can accurately position not just the specifics of the role but also the ethos of the family, bringing to life the history of the organization, the mission and values and how the role fits into the longer-term strategy. This insightful positioning is particularly important when sourcing candidates from outside of family office as many people have a limited or skewed perspective about what it is like working for a family office/business.

Portfolio company hiring: operating/portfolio companies are an extension of a family office’s team. Any hiring should be done through the lens of the family’s mission. Having a trusted search partner who understands the long-term goals of the family is useful when hiring senior executives for a portfolio company. For example, you may want ‘best-in-industry’ talent for a newly invested company, but it is also important to find people who are aligned from a strategy perspective – a buy-and-hold CFO is quite different from a ‘turnaround’ CFO for example. There is also an opportunity for a search partner to think strategically about talent across a group of portfolio companies.

Working in partnership: family offices are typically lean and have low employee turnover, which means they do not have the need for executive recruiting that often. As a result, a search firm can offer guidance on important questions to explore at the interview stage, advise on how to entice candidates, offer insights on compensation and benefits in different geographies, provide advice on employment referencing and how to handle employment contract questions at the offer stage.

A search firm is more closely aligned to a professional services business and will be helpful in generating ideas and solutions to onboard new employees, keep great employees engaged, appropriately compensated and stimulated so that they do not come to us as passive job seekers further down the line.