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Maybe you don't know there are different types of recruiting services. But, learning the difference and when each works better can make the difference in your hiring results.

Some recruiting firms only offer one type of service. So, when you are looking for a hiring partner, you'll benefit from doing some shopping around. Find not only the best headhunter for your needs but one that offers services that fit your desires.

I originally started with just Contingency services. Eventually, I realized that Retained and Engaged offered both my clients and me some pretty awesome benefits. I did all 3 for a bit before realizing that Contingency just wasn't what I wanted to offer any longer.

Why?

For various reasons, but at this point, it just doesn't fit with the business or life I want to have. I am not knocking Contingency search at all – it has its place and need for sure!

Today I just want to talk plainly about the 3 different services and when each works best.

Recruiting Services – Contingency vs. Retained vs. Engaged

Contingency

Contingency recruiters are paid only after the recruiter finds a candidate the client hires. It is basically a No Win – No Pay situation. The fee is typically paid on the first day of employment. The fees are based on salary or expected total compensation. Some contingency firms will base their fees on other factors, so it pays to do some research and ask.

In the residential building materials industry, contingency searches are ideal for low to mid-level roles. Think inside and outside sales, low-level managers, etc. Usually, I see contingency as working well for roles that pay under $75,000.

Contingency works well if you have a lot of time & patience and are also doing your own sourcing methods.

Contingency recruiters get paid only when you hire their candidate. So your search will move down a peg if a sure deal comes their way. If the recruiter isn't having success or your relationship isn't strong, they will likely tap out. If you absolutely need to find an A-player immediately, contingency might not be the route for you.

Retained

In retained searches, the recruiting fees are set in advance and paid in stages. There is typically a retainer fee – either paid monthly or yearly – that retains the services of the recruiter. Typically a portion of a search fee is paid at 30-45 days into the search and the rest is paid at 90 days or sooner if the candidate is found. The roles recruited for will generally pay between $150K-$300K+.

Retained recruiting is usually a long-term relationship between the client and the headhunter. Retained search usually works well for mid to upper management, executives and C-Suite level roles or if you routinely hire many people year after year. If you have national search needs, retained works because you can fill lower level roles but keep the attention of the recruiter since they know they won't be working for free.

Some retained recruiters also work almost as an external HR team. They will conduct all or most interviews, take care of scheduling, handle your drug testing and background checks, etc. It really depends on the firm and the client's needs/requests.

Retained searches are normally deep, systematic and stringent – the recruiter will pull out all the stops to find your best candidates. If you must get big hires right or have a lot of searches you want to be handled by the same team, retained is a great option.

Engaged

Engaged search is really a hybrid of the other two.

These services work well in the residential building products industry for low to mid level managers, territory, and national sales managers, branch managers, etc. The roles will typically pay between $80K-$250K. Engaged may also be used when you have a large amount of searches annually.

In engaged recruiting, a percentage of the fee is paid when the search starts, but the rest of the fee is paid only if a candidate the recruiter has found is placed. So, you get the benefits of retained search – a pay-for-performance search but one that ensures you have the recruiter's attention because you pay some up front.

Engaged services work well for all of the searches listed above – but generally also ensure a longer relationship with a recruiter. If you want the middle ground between contingency and retained, engaged is the route to go.

All 3 recruiting services have their place, figure out which most closely matches your needs and desires to form the best relationship with your hiring partner.

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