Finding & securing top talent is no easy task. It requires a deep understanding of the company culture and an expertise in assessing the skills, leadership style, and cultural fit of candidates. At the executive level, this is even more important as the new hire will have an impact on the culture and the strategic decisions of the company. In order to find the right talent and greatly improve the success rate of the search, many companies engage an executive recruitment firm.
A contract between a search firm and a client falls into one of two categories: a retained search agreement or a contingent search agreement. There are pros and cons to both models depending on the company’s stage of growth and the position that needs to be filled. The article below describes both models and is a good guideline in deciding what works best for your company.
Retained Search is the higher-end service in the range of recruitment models, and with that comes dedicated time and superior expertise in your industry. Typically, retained firms will create an off-limits agreement, meaning they will not source candidates from a current client. With larger search firms, there is often a dollar amount you must spend on recruitment per year to qualify for an off-limits agreement. As a precondition to these amenities, the search is given exclusively to the retained recruitment firm.
Clients who are looking to fill senior-level roles generally use this model. In the retained search model, depending on the search firm you choose, the fee for placement is usually in the 30% range of the total annual compensation for the position.
The payments are traditionally made in three parts: One as a retainer to initiate the search, one at a timed or milestone date during the search, and one upon the placement of the candidate. Firms generally provide a guarantee to replace a candidate should a candidate leave before a specified time or milestone. They can also offer onboarding and coaching programs to ensure that the transition of the hire into his or her new role goes smoothly.
Clients that need to fill mid-level to lower-level positions often choose to hire one or multiple contingency search firms to fill the role. As the name suggests, a contingency firm only gets compensated once a candidate is placed. The fee for a contingent search is typically a lower percentage of the total annual compensation than for a retained search and can vary greatly by industry and difficulty.
Contingent searches are not exclusive in their nature, so it is not unusual to have multiple firms working on the same search. Companies often contract multiple recruitment firms in order to maximize the number of resumes received. Additionally, companies often conduct their own search or recruit from within during this effort.
Benefits of Retained Recruitment and Contingent Recruitment Model
If you are looking to hire a lower-level employee, there are benefits to choosing a contingent recruitment firm, such as cost savings in the short term. If you want to hire a manager, an executive-level leader, or a board member, a retained recruitment firm is your best option.
Retained search firms have access to a large database of highly qualified candidates and a network of industry leaders that is most likely unavailable to a contingent firm. This access greatly increases your chances of finding the best possible leader for your company.
Retained search firms are also more invested in the client relationship and the success of the search, so they are committed to finding the candidate who is the perfect fit for your organizational culture and for the specific position. At Slone Partners, this means candidates undergo an extensive vetting process involving screening, video interviews, front-runner interviews with the client, a final interview, and an onboarding service with leadership coaching.
Every organization has a unique mission, culture, and hiring needs, so it’s important to find a retained search firm that is strategically positioned in your industry to access the right people. Executive-level employees are key decision-makers who directly influence the culture and bottom line of the organization.
There are advantages to choosing one recruitment model over the other in various situations. Engaging a retained search firm that fully comprehends its clients’ unique organizational culture and hiring needs will ensure the long-term success of higher-level placements.
About Slone Partners
Founded in 2000, Slone Partners is a premier executive search firm that specializes in recruitment for diagnostics, life science tools, clinical trials, contract research, healthcare information technology, and laboratory testing industries, with offices in Boston, Washington, D.C., and San Francisco.
For more information on Slone Partners services, please visit our home page.
Related content: The Importance of Assessing Culture When Making a New Hire