All recruiters are not alike. Nor are all recruitment processes. What many clients don’t realise is that there are two ways of working with a recruiter: retained search and contingency.
The difference between the two is simple.
In retained recruitment, the recruiter is paid an upfront or scheduled fee and works on an exclusive basis, meaning they, and only they, will be looking for a candidate. In contrast, contingency recruitment works on what would be best described as a ‘no win, no fee basis’. Multiple recruiters are invited to look for the right talent. If one finds and places a candidate, they get paid. If they don’t, they don’t.
The pros and cons of retained search versus contingency recruitment
Both types of recruitment have their benefits and drawbacks. Retained recruitment is more expensive from the outset. In essence, a client employs a recruitment agency to source the best talent and they work in close partnership through to the placement. Working on a contingency basis is cheaper so if you are on a tight budget then you only pay once a recruiter is successful.
Working with several recruiters on a contingency recruitment basis can also allow you to tap into a wider talent pool and bring a number of different perspectives to a brief. However, this “many hands make light work” approach can have unintended consequences. For example, it leads to a diffusion of responsibility. No one person is responsible for finding the right candidate and recruiters are free to walk away if the brief becomes too tricky, or if they have something more lucrative on their books.
In recruitment, confidentiality and discretion are critical. Your recruiter is the ambassador of your brand, so it's advisable to use one agency as you can control what image they portray of you.
When working with multiple agencies, they may not focus so much on selling your brand because they are not working exclusively.
Contingency can also get messy as a candidate could be approached by several recruiters for the same role, thus making the employer look desperate and not focused.
Retained search is more exclusive in every sense of the word. It shows candidates that the company is serious about the hire.
Retained search = stress-free recruitment
Lastly, in contingency recruitment, the client may find themselves briefing and managing several recruiters, often over a long time-period. This is not ideal when the whole point of working with a recruitment expert is to take the stress out of a time-consuming process.
On retained search projects, we put a dedicated team on the brief and they can work rapidly – often turning a role round in as little as a week. And it’s not only senior roles, retained can work well on a project basis and we have a 100% fill ratio, so success with us is guaranteed.
In contingency recruitment, you’ll probably find a good candidate. With retained search, you definitely will.
Choosing retained or contingency
Whether it is right for your business to use retained or contingency recruitment depends on many factors. For more junior roles, contingency can work well,but for senior hires or hard-to-find skill sets, retained search will almost certainly garner the best results.
It is also worth considering how much time your team has to dedicate to the recruitment process, company budgets and the type of candidate you would like to attract. While you may opt for contingency to keep your costs low, it could end up taking you a whole lot longer to find that perfect candidate.
Source: Hanson Search 2017.