To Retain or Not to Retain?
That is the question … You are a hiring authority and are considering enlisting the help of an Executive Search firm to assist with a key hire. So, what do you do next? Do you work on a retained basis, contingent, or a mix of the two?
We're here to help.
The real answer is that there is a time and a place for each when retaining a headhunter or working on a contingent model. There are benefits and detractors, depending on your situation:
- Many companies that go this route tell me that it’s their preference, so they aren’t “committed to one search firm" and can then use more than one to “hedge their bets”. That can certainly be a plus … BUT be careful. A recruiting firm looks at it the same way. It’s a great way to try each other out to make sure you both see a benefit and a valuable partner. You can each walk away from the situation cleanly if you aren’t seeing results from one another.
- Doing a contingent search is a great way to measure what type of talent you think you are getting from your internal network or internal recruiting team. An experienced headhunter with relationships in your space will always be able to find candidates that you didn’t know about or had a chance to go after. If you are dead set on hiring the best candidate possible, no matter the source, this is a great way to make sure that happens.
- There is literally no risk to the company. On a contingent search, the Executive Search Firm takes on all the risk.
- 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 most types of searches – 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.
- When retaining a firm, the results tend to be quicker! Executive Search Firms that work both contingent and retained searches will give the retained searches higher priority and more mindshare. That’s just how the system is set up, and rightfully so. Any position where speed to delivery is of super-high importance should be retained.
- A firm will put more resources into a retained search. Resources such as multiple recruiters working the project, more research and sourcing staff, and more internal tools.
- I absolutely get more callbacks when I leave a message to an “A” player where I can throw in the line “I’ve been retained by….”. Candidates tend to feel retained searches are more special, unique and have a higher priority. It gives the search more curb appeal and cache. More callbacks mean your job gets more exposure.
- Retained searches tend to save you money on the fee. When a client is willing to put skin in the game, I’m willing to give them a better rate. I’ve always thought that was fair. If I’m taking on all of the risk on a contingent search, the fee will be higher. If you are going to pay a fee anyway, why not make your money work for you and put a portion upfront to get the benefits of a retained search.
- Retained searches won’t dilute the opportunity in the candidate pool. When candidates keep getting calls from recruiters about the same opportunity/company it is a bad look for the company. Candidates tend to shy away from those situations, making it harder to attract talent
- Retained searches are a perfect situation for a Confidential search. Allowing one firm to put together and execute a detailed project, keeping a detailed and closed loop on it is the way to go on a confidential search.
All in all, there is a time and a place for both Contingent and Retained Searches. It really depends on the situation and the type of partnership you want with an Executive Search Firm for the short or long-term.
The worst thing you can do is nothing. Continuing to refresh your inbox, waiting for that great candidate’s resume to appear, are certainly options … or you can contact one of our Executive Recruiters, and we can come up with a true solution!