Companies have several options when it comes to selecting the right type of recruitment company. Whether you opt for a retained or contingency-based business. We will give our opinion on both services. So how do you, as an employer, decide what type of company is right for your needs(?)
retained recruitment
Retainer-based firms enter into contractual relationships with their clients for strategic search assignments. Since a contract-based relationship exists, a retention-based firm will work exclusively on one opportunity until a successful candidate has been identified.
As the name implies, retention based companies will require an upfront fee to perform the search. This fee is usually 50% of your total fee for the assignment. The retained companies operate on an exclusive basis, which means that the work will be covered through this recruiting company. They operate with processes and methodologies agreed between the client and the search company. As a customer, you have the peace of mind of a contractual agreement to protect your interests as well.
Retained search firms can establish a higher level of credibility with passive candidates. Because a hold search is given higher priority, most candidates are more likely to accept the recruiter’s call. Withheld signatures will share the company name in advance to establish credibility. When talking to candidates, there’s no need to be evasive when explaining your purpose for calling or sharing information about your client. For high-level assignments, retained searches are more attractive to executive-level candidates. No need to randomly search for the dreaded purple squirrel.
We have found that many high-level executives will only work with retained firms. It is also less likely that your application will be published on national job boards, especially when they want to keep your search confidential. A retained company represents a level of seriousness on the part of the company to fill the position.
contingency recruiting
Contingency-based recruiting firms will work on similar assignments while you work on other projects at your recruiting desk. Recruiters working on a contingency basis will often be competing with the client’s internal recruiting department, job boards, and typically other recruiting firms that have been given the same search assignment. The trick is to present the best candidate before the competition beats you. The result can sometimes mean quantity over quality.
As noted above, companies that use contingency recruiters often open up the assignment to other recruiters as well. This intent is to allow recruiting companies to compete to see who can submit the best candidates for interviews the fastest. This sometimes results in a no win no pay approach on the part of the recruiter. Situations have arisen where various contingency companies have claimed to have fielded the selected candidate. These disputes will escalate to the point where the employer simply decides it’s easier to walk away from the whole situation. Contingency companies will be much quicker to submit candidates, as they know that the more candidates that apply, the better their chances of making a placement. For some easy-to-fill positions, this may be ideal.
The results
When your company has a need to hire a mid-level or lower-level candidate, you should use a contingency-based company. If the job description is generic in terms of the skill set you’re looking for, then you should use a contingency-based recruiter. Companies looking for a unique candidate in terms of skills and leadership qualities will hire a consultant. The consultant will provide true objectivity when recommending the best option for its need. This is the ideal situation to use an experienced retainer based company.