Did you know that not every recruiter is the same? So are the recruitment processes—they differ. When you work with a recruiter, there can be two basic ways to go about the hiring process. Clients may not know it, but there are what recruiters call the retained search and contingency search.
Knowing how these strategies differ is essential to choosing the best suits your hiring requirements.
To help you decide which kind of search to use, let us examine how retained search and contingency search differ from one another.
Retained Search vs Contingency Search: Structure
There are stark differences between the two, but probably the most evident is their respective structures.
You will have an exclusive deal with an executive search agency offering a retained search model to oversee the full hiring process from beginning to end. The costs associated with retained search are covered by locating, assessing, and hiring candidates. These costs are paid in advance, or at the very least partially in advance.
Finding the best candidate for your position is also more important than finding good prospects. As a result of the more involved process, the retained search method is frequently more time-consuming than the contingency search method.
When they recommend a candidate you hire, contingency recruiters receive payment. It is also referred to as a "no-fee" search strategy because you are not required to pay for the service if a contingent search does not find a match for the position. The fee usually does not include hiring the chosen candidate; it merely covers the costs of discovering and evaluating candidates. With a modest initial commitment, the recruiting process often moves faster than retained search engagement.
Retained Search vs Contingency Search: Fees
Due to the scope of work specified in the agreement, retained search fees are more expensive than contingency search fees. Therefore, although the type and timing of retained search fees might vary, they frequently use an installment approach.
Fees are often paid progressively: at the beginning of the engagement, when the contract is signed, at the conduct of the search, during the process as milestones are reached, and after the process, when the firm hires a candidate. These costs may be fixed or represent a proportion of the role's total first-year pay, salary, plus targeted bonus.
With contingent search recruiting, there are no up-front costs. Only after a candidate is hired is the recruiting fee paid. Once more, there are many price structures, including fixed fee and salary-based models.
The unfortunate part, though, is that no matter the type of search, there's a possibility that the recruiter is working with a delinquent client. When it becomes evident that the hiring company has no intention of paying the fees, tapping a reputable collection agency specializing in the staffing industry is wise.
Retained Search vs Contingency Search: The Relationship
Retained recruitment is on an exclusive basis since they cultivate sincere relationships to match the appropriate individuals with the right roles. The foundation of retained search success is deep connection building.
Contingency hiring has a more transactional vibe. Employers with open positions will work with contingent search firms to quickly fill and place employees in crucial roles earlier than in-house recruitment usually can accomplish. Of course, this process does not imply that contingency recruitment will not result in valuable business partnerships or good customer service. Still, this strategy aims to locate a suitable applicant as quickly as possible. As a result, the engagement's shorter length naturally favors a more transactional relationship.
Retained Search: When to Use
Selecting a retained executive search firm may result in the most return on investment if your company is searching for a committed recruiting partner but is constrained by timetable requirements when filling candidates, including a crucial senior leadership post.
Retained executive search process includes using their databases of highly qualified, passive applicants rather than relying on pools of actively seeking employment candidates. Furthermore, these companies are masters at identifying and interacting with top-performing leadership talent hired by significant rivals, thanks to their extensive industry expertise.
Contingency Search: When to Use
Utilizing one or more contingency executive search firms in competition to give you suitable candidates fast may benefit you if your organization is driven by financial restrictions or a pressing deadline.
Generally speaking, a contingent recruitment agency should be used while looking for an individual contributor or first-level management up to the Director or VP level who typically makes up to $150,000 in total annual remuneration.
To Wrap It Up
Whether you choose a retained search firm or a contingency search firm, the caliber of the candidate will depend on the firm's track record and reputation. Regardless of the requirements and preferences of their client, experienced recruiters can locate the ideal, qualified candidate for a position.