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.