As a retained marketing recruiter, I develop relationships with both my clients and my candidates. Those relationships often turn into friendships, even if a candidate ends up not being the candidate who is offered the job. That relationship is developed because of a trust the client or candidate puts into the retained recruiting relationship.
The retained recruiter functions as a partner with the client, helping them identify and hire the very best candidates available for the open position. We also have to partner with the client by talking about the position and making judgments about the viability of the "match". The way to know that a candidate can succeed in the long term with one of our clients, is to get to know that candidate very well. It sounds simple, but the reality is getting to know the candidate is essential . . . and time consuming.
I'm not knocking contingency recruiters, they certainly have their place and can succeed for their clients. There are differences in the approach. Many of those differences are based simply on the amount of time a recruiter can spend talking with and understanding a candidate. A powerfully great hire is all about more than the resume . . . in fact the resume and finding the proper skill set is the easiest part of the recruiting process . . . it's everything else that's difficult, and it's that "everything else" that's essential for long term success for the candidate in the client environment.
The business models for retained and contingency recruiters are substantially different. The fact that contingency recruiters have to be spending half their time finding their next "job order" (as we call it), obviously diminishes the amount of time they can spend on existing searches. In turn, they can't spend the time with each individual candidate that a retained recruiter can. Their incentive is to get as many candidates in front of the client as possible . . . and quickly . . . before another contingency firm beats them to the punch!
Here's a list of some of the fundamental differences between the retained and contingency models:
Retained: Represent employer clients only.
Contingency: Can and do represent individuals seeking placement.
Retained: Conducts assignments on an exclusive basis only.
Contingency: Are usually in competition with other similar firms or agencies for the placement.
Retained: Professional recruiting staff tends to be compensated on a salary, bonus, profit-sharing basis with incentives for client business development.
Contingency: Professional staff tends to be compensated on commissions for placements made.
Retained: Usually work at higher organizational levels.
Contingency: Usually work at lower organizational levels.
Retained: Must know client organization and position responsibility/requirements thoroughly before implementing work.
Contingency: Tend to spend less time on initial research and specification; may not even meet company management and deal solely on telephone.
Retained: Focus recruiting and evaluation efforts on broad targeted range of potential candidates, most of who are not in active job market; process- and result-oriented.
Contingency: Focus primarily on applicants/candidates actively seeking new employment; placement-oriented.
Retained: Search consultant personally handles only about three to five assignments, on average, at any given time.
Contingency: Work with multitude of job orders simultaneously.
Retained: Search consultant may invest 40 to 50 hours per month per client assignment.
Contingency: Without a guarantee of payment for services performed, cannot afford to invest much time.
Retained: Usually recommends two to four qualified candidates to client
Contingency: Known to submit substantially more paperwork to increase probability of placement.
Retained: Requires minimal client HR and general management time investment.
Contingency: Requires considerably more HR time in screening, interviewing and evaluating.
Retained: Reputable firms offer a professional guarantee and commitment to thorough and ethical practices and results.
Contingency: Reputable firms under no obligation to guarantee or produce results due to contingency fee arrangement (paid only on placement).
Retained: Fees based on percentage of salary, time or flat quote plus expenses; average 30 to 35% of individual’s first year's compensation.
Contingency: Similar fees in 25 to 35% range.
Retained: Decision to utilize usually made by executive management.
Contingency: Decision to utilize usually made by HR.
