Your Guide to Recruiting Search Types
Retained vs. Contingency
All client centered recruiting firms understand that needs vary and, therefore, no two searches are identical. What type of search is the right choice for your company? Understanding the differences between search types will help you to make the right decision for your company.
The Contingency Search
A contingent search is exactly as it sounds. A company's payment is contingent upon whether they choose to hire a candidate presented by the recruiter. There is no upfront ("retainer") fee involved. Instead, the entire fee for the recruiter's efforts is due once the hired candidate actually begins his or her employment. All of the financial risk lies with the recruiter, and clients can continue using their own resources while the recruiter searches for ideal candidates.
Fees for contingent searches are generally a percentage of the hired candidate's salary, and are only payable upon the hire of the candidate. Companies of all sizes appreciate contingent searches, as they open up the pool of available talent for busy hiring managers who do not have the time to actively recruit.
Contingency searches are commonly used when a company is hiring for a position ranging from entry-level to mid-management (say $100K or so). Very often, the company will contact several recruiters to broaden the number of potential candidates. There is nothing to lose in doing this because the contingent fee is only paid to the recruiter who successfully places the candidate. When there is a large pool of candidates, a contingency search makes a great deal of sense. It is a good way, if you are using a top-notch recruiter, to narrow the field quickly and find a handful of qualified candidates.
The Retained Search
A retained search is an agreement in which the client contracts exclusively the services of a particular recruiter to conduct a single or multiple position search. Because they want a specific and focused search, they are given individualized attention by the recruiter who will accept the long hours, weekend work, and possible travel necessary to recruit an executive. The "retainer" usually consists of a percentage of the estimated total placement fee(s).
Retained searches are most commonly used when a company is hiring executive-level positions because the pool of candidates is generally much smaller than it is for mid-level management positions. This means that it would be highly likely for two or three recruiters to "discover" the same candidate.
A retained recruiter is most effective when his or her experience is primarily in industry and not as a career-long recruiter. This prior industry experience speaks volumes when discussing a job opportunity with an executive candidate. Clients who are willing to use recruiters exclusively fit this search best, because they understand the value of a committed recruiter.
The Exclusive Contingency Search
The exclusive contingency search combines elements of both a contingency search and a retained search, resulting in a focused effort with no financial commitment. This strategy is based on the client authorizing a particular recruiter as their "exclusive" search agent to fill a specific position within a pre-determined time period. The exclusive contingency search is used most often for clearly defined searches for established positions, with time-specific hiring deadlines.
The exclusive contingency fee is based on a percentage of a candidate's estimated first year salary. This fee is paid only if and when the position is filled.
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