For many companies seeking to fill executive positions, using an external recruiter is the most desirable option for finding the best talent.
Generally, recruiters operate using either a contingent or retained business model. Companies must be aware of the differences between these two models and choose the one that best fits their needs.
For more insight into the differences between these two models and the best instances to use them, keep reading this article for a thorough overview.
When using a retained search, the client will pay an upfront fee for the recruitment services. This is usually a third of the total amount that should be paid to the recruiter. In total, the client should expect to pay at least 50% of the annual salary of the position that they are trying to fill.
The recruiter will work exclusively with the client to fill the role. Due to this, both parties work closely together and take their time to really establish the client’s needs and decide the best way to execute the search.
Since such a fine level of detail goes into the search methodology, using a retained search can be a time-consuming process. However, the results are almost always worth the wait.
After finding suitable candidates, the recruiter will produce a shortlist of people to be interviewed. The client should then decide for themselves who they want to recruit for their position.
Instances to Use Retained Search
Retained search is an accurate and effective way to find the best talent. However, it does come at a high price. It’s best to use this method of recruitment when hiring for top-level executive positions or extremely specialist roles.
When a contingency search is used, the client is not expected to pay any fee until the recruiter has found the successful candidate.
The recruiter, therefore, is often rushing against the clock, trying to be the first to fill the role. It’s not unusual for companies to use multiple recruitment agencies, as well as their own in-house HR department so competition between recruiters can be fierce.
Due to this, contingency recruiters have to try and strike a balance between working carefully to find the best candidate but also doing it the fastest, too.
Instances to Use Contingency Search
Since contingency recruitment is a much quicker process, it’s often favoured by companies who need to fill a position quickly.
Although, traditionally, this method is used to fill entry level to junior management positions, there are many specialist recruitment firms using a contingency model. Therefore, it is worth considering using a specialist contingency recruiter to fill roles in specific fields like engineering or IT.
Main Differences between Contingency Search and Retained Search
Implications for the Client
The most obvious implication for clients is the cost involved. Retained search is much more expensive for businesses as they have to pay an upfront fee. If a client is looking to keep costs low, a contingency search would be much more desirable.
However, when hiring at an executive level, the fine level of detail that goes into a retained search makes it a much better choice for such a vital role.
Many businesses, also, enjoy the close relationship that they can have with a retained recruiter. Others enjoy knowing that the contingency recruiter works to deliver results quickly. It really all comes down to the individual needs of the client.
Implications for Candidate
As a candidate, either recruitment model can work in your favour.
Since it’s in a contingency recruiter’s best interest to secure your role, they’re going to work hard to convince the company that you’re the best candidate.
On the other hand, if your working with a recruiter operating a retained search, it’s very probable that they will have a lot more insight into the role. They’ll be able to give you a more detailed briefing on the application process and exactly what your role will involve.
To Sum Up
Hopefully now you’re well aware of the differences between contingency and retained business models in executive search. The right model for you is hugely dependent on the individual needs of your company. Before choosing which style of recruitment to use, think hard about the results that you want and it will, surely, pay dividends in the long run.