Minnesota colleges hunting for talent lean more heavily on search firms

In the hunt for Minnesota campus leaders, executive search firms have come to wield increasing clout.

The University of Minnesota and the Minnesota State system together have paid more than $10 million in the past five years for outside help in recruiting administrators. St. Cloud State University alone spent more than $850,000 on roughly 20 searches since 2012, sometimes paying separately to select interim and permanent leaders.

Once sought out primarily to recruit top leaders, search firms now routinely help with filling lower-level positions, including community college deans, according to contracts and spending data obtained by the Star Tribune. During the U's recent presidential search, regents decried the "perverse incentive" created by search fees based on the hire's starting pay. Yet the firms chosen by the U often do just that: charge fees determined by the recruit's salary.

Higher education officials say that in a competitive market for talent, the consultants help draw seasoned candidates to key roles, including at rural campuses — leaders who will steward institutions with budgets worth billions.

"We think it's a wise investment," said Minnesota State Vice Chancellor Eric Davis. "Search firms help us secure a diverse and deep talent pool."

Some on campus have voiced concerns about cost, transparency and a sense that reliance on firms has spurred more turnover. At a southern Minnesota community college, the faculty union cried foul over six recent searches — and news that the campus president became a finalist in an Illinois search handled by the same consultants.

The Star Tribune requested search firm data from the U, Minnesota State and its 37 member institutions last fall. The U, which took nine months to provide most of its contracts, explained its many departments manage their own searches. Now, the university is setting out to fill key positions in new President Joan Gabel's cabinet — at a time when a string of high-profile search failures nationally has trained a spotlight on how schools look for top talent.

The firms, which often work closely with internal search committees, can place ads for the position, interview applicants to help narrow down a slate of front-runners and check references, among other services. Many promote their ability to recruit coveted "passive candidates" — successful professionals who are not on the lookout for new jobs.

The U does the bulk of its search firm business with large national firms such as WittKieffer and Isaacson Miller, using master agreements negotiated through a Big Ten consortium that grants it discounts. Minnesota State picks firms out of a list of 14 vendors approved through a 2017 request for proposals rather than bidding out individual searches.

At St. Cloud State, a recent hiring spree followed a spate of retirements and former President Earl Potter III's 2016 death, which caused a domino effect as the provost became interim president.

In 2014, the university tapped the Registry for College and University Presidents to help it place an interim provost and business school dean. The registry charges a monthly fee while the administrators it finds stay on the job. By the time the positions were filled permanently — at a combined cost of $193,800 — St. Cloud State had separately paid $123,000 for the interims. The university, among the most troubled financially in the system, says the arrangement allowed it to avoid disruption after abrupt vacancies.

At the U, the medical school, which has faced pressure to boost flagging national rankings, conducted roughly 25 searches. Those accounted for almost 45% of the five-campus system's spending, including many of the costliest hunts, such as a $322,976 search for a neurosurgery chair in 2015. Kathy Brown, the U's vice president for human resources, noted academic medicine is "a unique, competitive field that requires outside help."

Minnesota State largely signed search firm contracts that include a fixed fee. At the U, whose board touted negotiating a fixed fee in the presidential search, most contracts have involved a fee based on the hire's salary and bonuses, usually about 30%. Brown says the university has avoided conflicts of interest, keeping firms out of contract negotiations with new hires.

But U Regent Darrin Rosha, who assisted with a recent general counsel search, says the firms play a key part in setting expectations about the salary needed to recruit strong candidates and in zeroing in on front-runners.

"That's akin to paying your defense attorney based on what the other side gets out of you," said Rosha, who believes the firms have played a part in the rise of public higher education compensation.

In at least a few recent searches — such as the one for law school dean — the U paid more than $20,000 above the expected fee spelled out in the contracts because the hires negotiated higher pay.

Higher education officials say they value the firms' national networks of potential hires and knack for attracting reluctant job seekers. They can be indispensable in tracking down employees with specialized skills, such as a federal grant compliance officer, Brown said.

At a time when white men continue to dominate campus presidencies, the Minnesota State system credits the firms with a major influx of female and minority leaders at its institutions. Kevin Lindstrom, who until recently led the system's college faculty union, says as a member of a recent search committee, he was impressed by how prepared the firm was to field tough questions about candidate backgrounds.

Still, says Brent Jeffers at the Minnesota State University faculty union, "When campuses are struggling financially, to put that kind of money into a search firm is a gamble."

At Minnesota State, Matt Williams, who now heads the college faculty union, says searches that fail to produce a successful candidate have become a growing concern. In some cases — including recent searches for a Century College president, vice chancellor for HR and most notably the system chancellor — another firm is hired to repeat the search, adding to the expense.

Faculty leaders say the dominance of headhunters has led to more churn, as firms sometimes both help fill vacancies and spirit administrators away to their next job. Many local contracts spell out a yearlong commitment to hold off on recruiting campus employees the consultants meet during searches.

At South Central College in southern Minnesota, a string of six searches led by firm RH Perry in 2018 and 2019 "raised many eyebrows," Williams said. Professors questioned the cost of the searches for two vice presidents, an associate vice president and three deans: $233,500 in total. Then, in January, the college's president, Annette Parker, became a finalist in an RH Perry-led search for president of an Illinois college.

Shelly Megaw, a college spokeswoman, stressed Parker was nominated for the Illinois position by a colleague after contracts with the firm had been signed or at least negotiated. The money on the firm's services was well-spent to "get top-notch individuals capable of leading the college into the future," she said.

RH Perry said it works hard to recruit strong candidate pools and vet applicants, but search committees drive the selection, with the firm's loyalty to its client, not any candidates.

Both the Minnesota State system and the U in some ways double up on the firms' candidate vetting. The system moved background checks in-house two years ago, and the U has a vendor who specializes in them. In 2016, the U, which had parted ways with former Athletic Director Norwood Teague amid sexual harassment complaints, started routinely enlisting firms to give finalists for key posts executive assessments — in-depth interviews and workplace scenario simulations — a staple in corporate hiring that the university had used on occasion previously. The university has spent more than $400,000 on the assessments in recent years.

Officials say they have made changes to improve the process. The U has taken steps to shift to flat fee searches, said Brown. Minnesota State plans to conduct more "airport interviews" with front-runners via video technology rather than flying them in. The system did its recent search for a vice chancellor of finance in-house. Even before that search failed, Davis said the approach will remain the exception.

"The search firms allow us to have a broad reach and a rigorous process," he said. "I am glad they are out there."

Staff writer and data editor MaryJo Webster contributed to this report.