Trustees | Trusteeship

Search firms now the norm for universities, but are they the best?

OMAHA WORLD-HERALD   |  February 16, 2014 by Kate Howard Perry

When universities need new leaders, they usually turn to search firms with deep connections and big price tags.

The firms do anything from writing the job advertisement to helping search committees set priorities and recruiting and pre-screening candidates.

If past searches are any indication, the cost for that help when the University of Nebraska launches its search to replace President J.B. Milliken will almost certainly be six figures.

Searching for NU’s leaders, from provosts and directors of institutes to the system president, has cost a total of more than $800,000 in the last 10 years.

Administrators say the outside help has been well worth it because of the quality of candidates they have been able to attract. But some experts say headhunters in higher education have driven up salaries nationwide and have shifted the power toward the candidates instead of the universities that seek to hire them.

Michael Poliakoff, vice president of policy at the American Council of Trustees and Alumni, says search firms are the most common method, but his organization recommends that leaders consider consultants to help structure, but not run, a search.

If professionals come in and present a short list, often a board will become more detached from the search, Poliakoff said.

“Their most important job is to select, evaluate and, if necessary, terminate a president,” he said. “They need to be very hands-on in the process.”

Poliakoff also sees a connection between the jump in average salaries for college presidents and the use of corporate-style headhunters. Between 2006 and 2010, the median salary for college presidents in the United States rose almost 10 percent, while faculty pay at doctoral institutions remained flat, according to the Chronicle of Higher Education.

Sometimes headhunters are shuffling sitting presidents from one job to another and getting them a higher salary with each move, Poliakoff said. Though many firms offer a flat fee, it’s also common for them to charge one-third of the new hire’s first year’s pay.

“Who is the search firm working for?” Poliakoff said. “It’s in their interest for the initial salary to be as high as possible.”

The firms also have advocated for closed searches, which has led to more and more states changing laws to allow confidentiality for applicants.

Staffers and others associated with NU testified before a legislative hearing this month in favor of a bill that would have made future searches closed to the public until a single finalist was named. They often cited the experience of headhunters who told them candidates wouldn’t apply without guarantees of secrecy.

That bill didn’t make it out of committee.

NU spokeswoman Melissa Lee said in an email that the use of search firms is common at leading universities because of the value they add to high-level searches.

Price of a new university hire

The University of Nebraska has spent more than $800,000 on executive searches in the past 10 years.

“Considering the caliber of leaders the University of Nebraska has been able to attract in recent years with assistance from external search firms—including those who are nationally known in their fields and who have advanced the university tremendously—we are certain that the use of firms is a prudent investment that helps us meet our obligation to Nebraskans to attract the very best talent to our state,” Lee said.

Records show that NU has hired search firms for eight searches since 2004, when it spent about $112,000 for the search that led to Milliken’s hiring. The least expensive search was the 2007 hire of the University of Nebraska at Omaha chancellor, which ended with the permanent hire of then-interim chancellor John Christensen. That search cost about $84,000.

The costliest search was the most recent: this year’s hire of new University of Nebraska Medical Center Chancellor Jeffrey Gold, which cost almost $191,000.

James Linder, who led the search committee for the UNMC chancellor, said the search firm kept in touch with the search committee and the university president.

“There is no doubt in my mind that our search firm was fully engaged with the university leadership,” Linder said.

NU also has used search firms for less visible leadership roles.

Search firms are assisting in the current searches for a provost, a position that has been open since 2012, and a newly created position of vice provost for P-16 initiatives.

The contract terms differ with each search: Some charge a flat fee, while others take a percentage of the new hire’s salary. The payout to Boston-based Isaacson, Miller Inc., which helped with the UNMC search, was a flat fee of $150,000 plus expenses. R. William Funk & Associates charged 33¹/3 percent of the new UNO chancellor’s salary in 2007.

All the contracts NU has signed in recent years include a clause that the search firm won’t recruit candidates from that department for at least a year and wouldn’t consider them if they turned up in another search with which they were involved.

The stock of candidates qualified for leading a top university already is small, said Clara Lovett, president emerita of Northern Arizona University and now a higher education consultant. It becomes even smaller when a search firm is involved, Lovett thinks, because the firms often return to the same pool of polished applicants.

“The safer the candidate, the most likely it is that someone will like the candidate, the stakeholders will agree, and the person gets hired,” Lovett said.

But it’s often the expertise and knowledge of the field that leads to that whittled-down pool, said James McCormick, chancellor emeritus of the Minnesota State Colleges and Universities system and a consultant with AGB Search. In his work with AGB, a search firm tied to the Association of Governing Boards of Universities and Colleges, McCormick said he does not make decisions for boards.

When hiring for top jobs is so infrequent, McCormick said, many boards look for help with crafting interview questions as well as making detailed reference checks. He often will spend days on a campus, getting input from faculty and students, and he shares all applicants with search committees.

“I think the consultant at every point can really help the committee and assist them in any way they want, short of telling them what to do,” McCormick said.

Still, not every search calls for professional help. When the new president of Missouri State University stepped down unexpectedly in 2011, the search committee had just completed a pricey search a year prior. They decided to do it alone.

Jim Anderson, who was involved in both search committees, said he has had positive and negative experiences with firms. Search firms often are unwilling to do the sort of deep reference checks he likes: namely, making calls to people who know the applicant but don’t appear on a list of self-provided references. He sees inherent biases with recruiting.

“I think they have a stable of candidates they continue to recommend that they’re close to,” Anderson said.

But overall, Anderson said search firms work well if the committee and governing board remember that they still must commit to hard work.

“The ultimate decision is the governing board’s,” Anderson said.


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