Navigating the complex world of executive search can be a daunting task, especially when it comes to choosing between retained search and contingent search methods. Both approaches have their merits, but which one is best suited for your company’s specific needs? In this blog post, we’ll explore the key differences between retained search and contingent search, weigh the pros and cons of each method, and provide valuable insights to help you make the right decision for your organization’s talent acquisition strategy, with a focus on the benefits of retained search.
- Retained search is a comprehensive and consultative approach to finding passive candidates for senior-level positions, with an emphasis on tailored service and long-term success.
- Contingency search provides a cost effective recruitment method used to quickly fill mid tier positions in industries with high demand.
- Companies should prioritize quality talent acquisition while taking budget into consideration when selecting the best recruitment process for their organization’s needs.
Understanding Retained Search
The retained search model is an exclusive partnership between a company and a search firm, typically used for senior-level positions. This method targets passive candidates – those who are content in their current roles and not actively seeking new opportunities. While retained search may have a higher upfront cost, it offers a more comprehensive and consultative approach compared to contingent search. Retained search firms often specialize in the field in which you are recruiting as well.
Companies that choose to work with an executive search firm, particularly retained executive search firms, benefit from:
- A tailored and dedicated service
- Focused on finding the best possible candidates for their unique needs
- This level of personalization helps to establish a strong relationship with candidates
- Ensuring long-term success for both parties
- Subject matter experts on staff to expedite understanding of skillsets and the ability to “speak the language” of the search.
Key Characteristics of Retained Search
One of the hallmarks of retained search is its focus on quality over quantity. Retained search firms take the time to calibrate, screen, and conduct in-depth interviews with candidates, ultimately presenting a shortlist of 3-to-5 top finalists for the hiring company to consider. This ensures that the candidates presented are not only well-qualified but also a good fit for the company’s culture and objectives.
Retained search firms also emphasize a custom approach, working closely with their clients to comprehend their specific needs and goals. This facilitates a search process that is adapted to the company’s distinct requirements, leading to a more effective outcome.
The pricing model for retained search firms typically involves an upfront retainer fee, with additional payments made incrementally throughout the process. This structure can be more expensive than contingency search fees, but it also ensures a higher level of commitment from the search firm to locate the best candidate. You’re also paying for firms with a lot more bandwidth to dedicate to your search that includes more transparency, accountability, and a more indepth understanding of your field.
These firms typically request a third of their total fee at the start of the engagement, with subsequent payments made as the process unfolds. This pricing structure reinforces a financial commitment from both parties, guaranteeing the search firm’s dedication to locating the most suitable candidate for the client.
Supply chain employers should use specialized supply chain recruiters to fill their leadership roles. Why? Because the field is so highly nuanced and ever-changing that it requires a high level of understanding to remain current and knowledgeable enough to how who to recruit and more importantly who not to.
Contingency Search Demystified
Contingency search, on the other hand, is a non-exclusive recruitment method typically used for mid-tier positions. This approach focuses on active candidates, who are currently seeking new opportunities and may be found through job postings or resume searches. Contingency search firms charge fees only upon successful placement of a candidate, making it a more cost-effective option for some companies.
While contingency search may not offer the same level of depth and personalization as retained search, it can be a valuable tool for companies looking to fill specialized roles quickly and cost-effectively. Contingency search is often used for roles beneath the Director or VP level and can be particularly effective in industries with high demand for niche skills.
Contingency Search Pricing Model
In contrast to retained search, contingency search firms levy a percentage of the candidate’s yearly compensation only when a successful placement is made. Therefore, if a candidate isn’t hired, the client incurs no fee, significantly reducing financial risk in comparison to retained search.
The fees associated with contingent search services typically range from 20-30% of the candidate’s total annual compensation. This payment model offers a level of flexibility and cost-efficiency that may be appealing to companies with limited resources or tight budgets, as they only pay for results.
Advantages of Retained Executive Search
Retained executive search offers several key advantages over contingency search, including a more comprehensive screening process, long-term partnerships, and a focus on quality candidates. Hiring managers who work with retained executive search firms can expect a higher level of support and commitment throughout the hiring process, ensuring that the best possible candidates are identified and presented through retained executive search services.
Furthermore, the exclusivity and dedication of these firms can help to build trust and confidentiality between the client and the recruitment firm, ensuring a secure and discreet process for both parties.
Quality over Quantity
The emphasis on quality over quantity is a significant benefit of retained search. Retained search firms exert great effort to locate the finest talent for their clients, assuring the delivery of exceptional candidates for their senior positions. This strategy not only bolsters the chances of a successful hire but also aids in reducing the risk of an expensive mis-hire.
Retained search firms also prioritize a consultative approach, offering personalized service and a deeper understanding of their clients’ unique needs and objectives. This focus on quality ensures that the candidates presented to the hiring company are not only well-qualified but also a good fit for the company’s culture and objectives.
Confidentiality and Trust
Retained search offers a secure and discreet hiring process, ensuring that sensitive information related to the hiring company and candidates is well-protected. This level of confidentiality fosters trust between the client and the search firm, ultimately leading to more successful hiring outcomes.
Trust is a cornerstone of the retained search process, with a strong partnership between the firm and the client being essential for success. Clients entrust the search firm with:
- Identifying, screening, and presenting highly qualified candidates;
- Candidates who are currently employed and successful in their respective roles;
- Ensuring that only the best candidates are presented for consideration.
When to Choose Contingent Search
Contingent search is the best fit for lower-tier positions when time and cost are paramount. Its non-exclusive characteristic allows several recruiters to work simultaneously on the same role, thereby enhancing the odds of promptly and economically identifying a fitting candidate. Nonetheless, this method may not provide the depth and customization characteristic of retained search.
Companies with tight deadlines or budget constraints may find contingent search to be an attractive option, as it offers a more standardized talent search process without the need for an upfront investment or long-term commitment.
Ideal Positions for Contingent Search
Contingent search is ideally suited for individual contributor to Director or VP roles, with total annual compensation up to $150,000. These types of positions typically require a more streamlined recruitment process, ensuring that suitable candidates can be found and hired quickly and efficiently.
The success rate for filling VP roles through contingent search is typically around 20%, although this may vary depending on the search firm and their approach.
Because supply chain is so nuanced and highly specialized, typical pricing models don’t apply. It requires a depth of relationships and a broad network to draw upon in order to place even director-level supply chain talent of high enough caliber to suit an employer’s needs.
Time and Cost Considerations
When comparing contingent vs retained search, contingent search offers a faster recruitment process, making it suitable for companies with tight deadlines or limited resources. Clients only pay for successful placements, reducing the risk of incurring costs for unsuccessful searches.
The placement fee for a contingency search is usually lower than a retained search fee, further reducing expenses for the client. Companies with tight budgets should carefully consider the potential costs and weigh them against the advantages of using a contingency search firm.
Deciding which search option best suits these criteria will help to determine the best path forward for any organization.
Refunds are very rare. Retained search firms are performing a service, similar to an attorney or an accountant. The work is getting done. If a candidate doesn’t fill the required placement period, a backfill will likely take place.