Retained vs. Contingency

[David Sandusky]

I am asked to explain the difference often, so:
Retained Search Firms
1. Retained on an exclusive basis by companies to fulfill a position. Represents employer clients only
2. Can have an industry focus, but tend to be generalist in nature.
3. Cater to jobs above $100,000, charging the employer either a flat fee or 30% to 35% of the starting salary.
4. Retained recruiters usually contact potential candidates at their current place of employment, tend to be selective of companies and titles.
5. Only have a limited number of career opportunities for a candidate.
6. Retained recruiters may undertake significant screening, assessments, and background checks.
7. Usually narrow down the search for a position to 2 or 4 job candidates.
8. Process tends to take longer.
9. Decision to utilize generally made by General Management.
10. Potential conflict of interest between clients and firms.

Contingency Search Firms
1. One of several possible firms used by a company. Fee is earned by the first search firm that places a suitable candidate. May represent candidates.
2. Often tend to be specialists in an industry or discipline at the low to mid-management career level.
3. Tend to focus on jobs in the $30,000 - $100,000 range and usually charge the hiring company 25% of the position's salary.
4. Contingency recruiters are usually pulling from a database of available talent. Activity is heavy on both candidate and client development for the timely match.
5. Cater to various companies and have ability to share jobs and provide more opportunities.
6. Contingency recruiters tend to not provide these additional details outside of the candidate’s resume.
7. Try to maximize their chances of success by supplying as many possible candidates as possible.
8. Process designed to turn over candidates quickly.
9. Decision to utilize generally made by HR.
10. Independent with much lower chances of conflict.

There are more and more examples of small and mid-sized search firms practicing some combination of the above standard definition of retained and contingency search firms.

I am considering outside recruiting help for the first time as a manager. Is there any reason why I should not use a few contingency firms and award the one who provides the best candidate?

[David Sandusky]

Consider the relationship goals you have as well as the level of position you are recruiting to fill. Also consider your time. You are already delegating recruiting. How many relationships do you want to manage. Get referrals and if you go contingency, speak with a few firms and if you feel good about two, go with them. If you required more touch and exclusivity, you can manage that relationship with retained or contingency.

I hope this helps; feel free to post details if you need more direct support on the best decision for you.

Anyone know whats going on with the job market. Seems like every day I know someone getting laid off. And it looks like its getting worse.

[David Sandusky]

Originally Posted by temengaft

Anyone know whats going on with the job market.

There are cuts in many companies and industries, but many more are hiring. My recruiter friends (contingency and retained) are busy!

Focus on who is growing and if it in different industries or company size than you are used to, consider your transferable skills and where you would have fun.

I have been in both sales and sales management in a specialized field for 20 years. I’m seriously considering starting my own firm, recruiting sales professionals in this field – although I will eventually branch out to other areas of healthcare. I feel fairly confident; primarily due to the amount of contacts established on both the client and candidate side.

My question is … How? Would you recommend DVD training, live seminars, extensive reading/research or all the above? I’m just starting my information gathering, so any advice would be helpful.

Thanks,

[David Sandusky]

Originally Posted by Unregistered

I have been in both sales and sales management in a specialized field for 20 years. I’m seriously considering starting my own firm, recruiting sales professionals in this field – although I will eventually branch out to other areas of healthcare. I feel fairly confident; primarily due to the amount of contacts established on both the client and candidate side.

My question is … How? Would you recommend DVD training, live seminars, extensive reading/research or all the above? I’m just starting my information gathering, so any advice would be helpful.

Thanks,

Having contacts and sales skills is a wonderful start. There are plenty of training opportunities including right here. Help me understand the area(s) of training...is it:

Business model

Recruiting including interview skills

Search process

Other / all the above?

Let me know.

Originally Posted by David Sandusky

Having contacts and sales skills is a wonderful start. There are plenty of training opportunities including right here. Help me understand the area(s) of training...is it:

Business model

Recruiting including interview skills

Search process

Other / all the above?

Let me know.

All the above. However, I recruited for two years as one of my 1st sales positions. Just recently, I interviewed some managing partners of a firm specializing in my area, and one that has contacted me several times for openings. I was negotiating to be another managing partner in this firm and this process was part of my due diligence. Subsequently, I learned that the basics of recruiting haven’t changed much in 20 years – technology aside.

So, I’m looking for training primarily in the nuts and bolts of setting up my own executive search business. I have seen some DVDs for several hundred dollars, several books and training seminars, but not sure where the best resources are. I prefer DVD or remote training. I would also like to know how to best evaluate Applicant Tracking Software (although I would be looking at an ASP … I think). Finally, I’ve Googled this, but still a little fuzzy about the ability to share data-bases with other recruiters in order to match up candidates and job orders (splits).

Thanks again in advance,

[David Sandusky]

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