Which one is better: contingency recruitment or retained executive search?

Have you heard about contingency recruitment and retained executive search? What are they? Which one should you use to fill an open position? Let’s read the article below to find out the answers.

What are they?

1. Contingency recruitment

Contingency recruitment (also known as hiring agency, recruitment agency, contingency firm) is a type of recruitment service in which the agency is paid only when the candidate they present is employed. You may work with multiple contingency recruiters at the same time. And any angency which recruits the right person is paid. This is often called ‘No win, No fee recruiter’. A contingency recruiter often has to compete with your human resource department, direct applicants and advertising.

2. Retained executive search

Retained executive search (also known as executive search, search and selection, retained headhunter) is a type of recruitment service in which the agency is paid to conduct a search to find talents. With larger search firms, you may have to spend an amount of money per year to retain their services. Retained executive search is high-end recruitment. You can only work with only one retained recruiter at a certain time due to the agreement.

See also >>> 5 things to know about retained recruitment

How they work?

1. Contingency recruitment

Contingency search firms find candidates and send you their CVs. Then, you have to evaluate the candidates yourself to choose the most suitable one. Contingency search firms tend to work in specific industries and skills.

Contingency search consultants are motivated by presenting the most attractive candidates to potential employers at once and expect to get paid when one or more of them are hired.  

Contingency search firms usually do not care about this case until it becomes open again.

2. Retained executive search

Retained search firms search exclusively for candidates, conduct multiple interviews and tests to assess if these candidates fit your company’s culture. Then they will send you the best three to five CVs and detailed outline of each candidate. All you have to do is carry out the final interview and choose the one you like the most. Retained search firms are able to work across industries and skills.

Retained search consultants are motivated by implementing the best process of searching for candidates which is not always result in employment.

Retained search firms provide post-employment reviews with the clients and support to the hired candidates to improve their service.

See also >>> Executive search and Recruitment in Vietnam

See also >>> Pros and cons of using an executive search firm

The fee

1. Contingency recruitment

The hiring company has to pay the fee only when one of the candidates a contingency recruiter presented is employed. This means, a search conducted by a contingency recruiter is free until they get you the right person. No up-front fee, no other expenses. The only fee is the fee for employment. This is typically 20% to 30% of first year’s salary awarded to the hired candidate.

Contingency recruiters are paid for the result.

2. Retained executive search

Retained recruiters charge their clients a percentage of the final fee before they really get into the recruitment process. The fee is estimated based on the salary and benefit package offered the hired candidate. In addition, you may have to pay some other out-of-pocket fees such as travel expenses (transportation, residence) for candidates screening. These fees often add 10% to 15% to the final fee. Some retained recruiters also accept a fixed fee based on the expected salary level of the position.

Retained recruiters are paid for the process.

Neither contingency nor retained recruiters work for job seekers. They only work for hiring companies and charge money from them.

The time

1. Contingency recruitment

Contingency recruiters try to find best candidates as quickly as they can and faster than other recruiters. They probably send their clients more CVs in order to increase the chance of employment. The company’s human resource department still has to spend a significant amount of time screening, interviewing and negociating with the candidates.

2. Retained executive search

Retained recruiters conduct a search to find well-qualified candiates, set up multiple interviews to screen and assess if the candidates fit the job opening. They are expected to evaluate all the potential candidates. And all you have to do is pick the individual they like the most. However, to maintain high-end recruitment services, they need to spend more time researching. Thus, it takes longer to use service of a retained recruiter.

When to use which process

Retained executive search seems to result in the best candidates. However, it is said that there are times when contingency recruitment makes more sense than retained executive search and vice versa. Let’s see.

1. Contingency recruitment

Contingency recruitment is used where speed is valued over perfection:

    -     When the open position is low or midlevel

    -     When there are many qualified people for the position

    -     When you want to take more control of assessing, interviewing the candidates

    -     When you want to fill the position quickly

    -     When you do not want to spend too much money on a search firm

2. Retained executive search

Retained executive search is used where perfection is valued over speed:

    -     When the open position is high or executive level

    -     When you want to reach the top end of the recruitment market

    -     When you want to hire the most qualified person available

    -     When the recruitment process requires a high degree of privacy

    -     When you want a thirdparty recruitment agency to evaluate the candidates before carrying out the final assessment

    -     Each type of search is used in specific situation. It depends on you to determine which one is more suitable.

See also >>> Executive Search & Selection Services of HRchannels Group

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