A Greenville search firm will get a cut of the salary of the next Department of Health and Environmental Control director under a deal that is raising concerns among some S.C. lawmakers.
Find Great People, retained to locate candidates for the vacant post, stands to earn as much as $42,000 from the arrangement, according to information released by DHEC.
If one of the candidates that the firm finds is hired, the company will receive 20 percent of the director’s first-year pay, DHEC said. The pay range for the job is $168,043 to $213,520, meaning Find Great People could earn from about $33,000 to about $42,000.
That is not a lot of money when compared to the state’s more than $8 billion general fund budget. But some lawmakers said they are uncomfortable with the deal.
Paying a private search firm a contingency fee could lead other state agencies to rely more heavily on such contracts, which eventually could cost the state much more, they said. Several legislators said they would have preferred DHEC pay the search firm a flat fee if the agency’s board thought it was worth hiring.
“I’d have a concern about this as a precedent,’’ said longtime state Sen. Nikki Setzler, D-Lexington. “You don’t know what you are getting into.’’
Republican state Reps. Murrell Smith and Mike Pitts, who are on the state’s Agency Head Salary Commission, said such agreements provide an incentive for search firms to recommend candidates at the highest salaries, which is not always in the state’s best interest.
Smith said he may bring the matter up when the Agency Head Salary Commission meets to sign off on the new DHEC director’s salary.
“Are they going to recommend that we pay more than $200,000 so they can fully compensate the search firm?’’ asked Smith, R-Sumter, who also is on a legislative committee that oversees DHEC’s budget. “That’s going to draw some concern from me when we are requesting to set the next DHEC commissioner’s salary.’’
Efforts to reach DHEC board chairman Mark Elam have been unsuccessful since last week. The agreement with Find Great People was struck a year ago, while Allen Amsler was board chairman. Efforts to reach Amsler and Find Great People also were not successful.
DHEC has not had a full-time director since Catherine Heigel quit the $196,000-a-year post 15 months ago to go into private business.
It was not known how many state agencies, if any, have struck contingency agreements with search firms to hire new directors.
But in 2016, the Fiscal Accountability Authority’s procurement division issued a contract allowing agencies to hire companies to conduct executive searches, according to the S.C. Department of Administration. The contract says search firms are to be paid a percentage of the candidate’s first-year base salary.
Find Great People is one of three search firms listed as providing executive search services for the state. Its standard fee is 20 percent, according to the contract.
State Sen. Greg Gregory, R-Lancaster, said such arrangements are not unusual in private business. Gregory, also on the Agency Head Salary Commission, said he has no problem with the deal if DHEC hires a quality person to run the agency, one of the state’s largest.
State Sen. Katrina Shealy, R-Lexington, said the state is considering hiring a search firm to help find the next director of the Department of Social Services. But she said the final say-on who to hire — and what the financial arrangements would be — is up to Gov. Henry McMaster. Shealy is on a committee that is providing advice to McMaster on what qualities to look for in the next director.
Unlike DHEC, Social Services is a cabinet agency that reports directly to the governor. The DHEC board, appointed by the governor, is in charge of hiring a new director for that agency.
DHEC’s board has used a search firm before. In 2001, the board hired long-time DHEC employee Earl Hunter as director after spending $33,000 for a company to conduct a national search.
Find GreatPeople, the company hired by DHEC in October 2017, is a S.C.-headquartered firm with offices in Greenville and Columbia. Its chief executive, John Uprichard, is a past chairman of the state Chamber of Commerce. Uprichard’s biography on the company’s website says he is a member of the state Workforce Development Board.
It is unlikely that DHEC’s board will name a new agency chief until after the elections next month, said a source familiar with the process. Most of the DHEC board, which has six members and two vacancies, was appointed by McMaster, who faces an election challenge from Democratic state Rep. James Smith. If Smith upsets McMaster, he could name two members to DHEC’s board immediately and another three next summer, when current members’ terms expire..
The department is one of the state’s largest agencies, with about 3,500 employees, and touches the lives of most state residents. DHEC regulates a variety of environmental and health activities — from tattoo parlors to water and air pollution and hospital expansions.
The department said it has received 108 applications for the director’s post.