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Contingency vs. Retained Recruiters: What is the Difference?

• Post author By Jörgen Sundberg

What most people don’t realize is that there are two different types of recruiters/headhunters out there. Recruiters work on either a Retained or a Contingency basis. What are the differences and how does it all affect you as a job seeker? This is my attempt at explaining how it works.

Working on a retained basis means the recruiter will charge an upfront fee to the client to conduct a search. They will operate on an exclusive basis meaning the job will only be filled through this recruitment company. These recruiters work very closely with their clients and will take their time and use an agreed methodology to find the best person for the job. The process is usually rigorous with a shortlist of anything from three to ten names being presented before interviews commence. In a perfect world, the retained recruiter will be able to present five candidates with the ideal skills, location, salary, etc. and all the client has to do is pick the one they like the most.

A retained recruitment assignment doesn’t come cheap; the client will expect to pay up to 50% of the projected first annual salary of the successful candidate. Companies will request a retained search when they are looking to fill a senior position and sometimes when all other cheaper search options have been exhausted.

Contingency:

Contingency search, on the other hand, is when the candidate is the bargaining chip. Contingency is sometimes described as No Win, No Fee (or even No Cure, No Pay). It is what it says on the tin, a service performed by a recruitment company for free until the day a candidate represented by them takes a position with their client. Recruiters working on this basis often have to compete with the client’s internal HR department, advertising, direct applicants, and typically one or more other recruitment companies.

The trick here is to represent the best candidate or candidates and to do this faster than the other channels. If for instance, the vacancy is hard to fill, chances are there will only be a few candidates out there qualified for the position. Getting to these before everyone else is vital for the successful no-win, no-fee recruiter.

Difference in methodology:

The retained recruiter takes their time to get things right using processes and agreed methodology, knowing they will eventually fill the position thanks to their exclusivity terms. The contingency recruiter will be a lot quicker and most probably deliver more candidates to increase the odds of making a placement.

Another difference is that the retained recruiter has signed up to a service level, sometimes a retained search can be challenging and these projects can be rather lengthy. The contingency recruiter will simply move on to another vacancy or client where they believe they can get a more straightforward win.

Implications for you the candidate:

So what does this mean to you? If you are approached about a vacancy, ask the recruiter how they got the assignment and what the competition is. If you are dealing with a retained recruiter, you are more likely to get full briefings on the role, the interviews, a potential offer and so forth. Having said that, contingency recruiters tend to be more proactive and have better sales skills – something that can certainly help you get the perfect job.

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• Tags Contingency , Contingency Recruitment , difference , methodology , Recruiter , Recruiters , Recruitment , retained

By Jörgen Sundberg

Founder of Undercover Recruiter & CEO of Link Humans , home of The Employer Brand Index .

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Retained Search: What To Know Before Engaging With An Executive Recruiter

Finding the right talent is not easy, especially when recruiting for executive roles requiring exceptional expertise. While hiring a recruitment service can be most helpful, there are different models available, some of which may not work for your company.

If you are a hiring manager looking to fill out an executive role with an unusual skill set or a niche vacancy requiring specific qualifications and a unique perspective, a retained search is your best option. But what is a retained executive search firm? How do executive search firms find candidates?

What Is A Retained Search?

Retained search, also called executive search or retained recruiting, is a highly personalized, high-touch recruitment process often used by companies and organizations looking to source and hire for executive-level or niche roles. The term originates from “retainer,” which is paid to the executive search firm upfront to retain it for the entire duration of the hiring process.

In a retained search, the firm works closely with its clients to determine what they are looking for in terms of skills, location, and salary in the right candidate. Additionally, recruiting firms also look at the organization’s workplace culture and the goals it is aiming to achieve to find the most qualified candidates for the position.

How Is Retained Search Different From Contingent Search?

Contingency recruitment—also called the contingent search model—is a hiring process where the recruiting firm will only receive the agreed-upon search fees after the company hires a candidate.

Unlike retained search firms, contingent firms often juggle multiple clients at a time. Because their pay is dependent on their performance, contingent search firms often try to work quickly to produce potential candidates for their clients, even if they aren’t necessarily the right talent for the role.

With this type of recruitment process, companies can save costs as there are no upfront expenses. Companies are also not required to work with the firm on an exclusive basis, which means hiring multiple recruiters simultaneously for talent acquisition services is possible.

That being said, contingent search firms often focus on quantity than quality. A contingent recruiter may also present the same set of candidates to a variety of clients.

How Do Retained Search Firms Work?

• In the retained search model, the client will negotiate the fees with the firm firsthand. Once the fees have been agreed upon, the company will pay a portion of it upfront and sign a retained search agreement.
• The portion of the fee that constitutes the initial payment varies depending on the agreement of the firm and the client. Retained firms usually charge about 25% of the starting salary of the position they are recruiting for and might later include bonuses and commissions. Some retained firms also charge 33.33% of the annual compensation of the recruited candidate. [1]
• In some cases, the amount is paid in three separate stages: 25% to 50% upon contract signing, 30% once an offer has been made, and the remaining balance when the candidate joins the organization.
• The recruiter regularly provides clients with information like prospect lists, referral conversion, and more.
• Retained search contracts do not replace any current contingency agreements. Candidates produced by a retained search firm are also covered under separate contracts.
• Retained search firms commonly take a minimum of four (4) weeks before they present a slate of prospects to their client. During this period, top retained executive search firms often delve deep into their networks, researching prospects that fit the client’s unique requirements.
• Retained search firms guarantee to redo a search if the recruited executive leaves before a certain milestone (typically between one to three years). However, this is only possible if there has not been any material change in the position requirements or management team. [2]
• Retained firms are employed to conduct the entire search and recruitment effort from the startup until the executive starts working. [3]

Stages Of Retained Executive Search

The process of finding the right candidate varies little between different executive search firms. In fact, the basic steps in the retained search model are described by the Association of Executive Search Consultants (AESC) .

There are 14 basic stages that most retained executive search firms go through while actively seeking the right candidate to fill an open role.

• Engaging A Retained Executive Search Firm

To start off the process, a hiring manager must contact a retained firm and hire them to search for quality candidates for a certain position. The firm is also paid a part of its retained search fees, which are usually divided into thirds.

In addition to settling the initial payment, the hiring manager must also agree to sign a contract with the executive search firm. The contracts used by most retained recruitment agencies stipulate that the firm will serve as the exclusive representative of the search of both external and internal candidates for the agreed-upon job postings. The contract will also define engagement timing, off-limits agreements, and other issues related to the assignment.

• Meeting With Stakeholders

Once the payment and contract have been settled, retained firms meet with the hiring executives and stakeholders to discuss what is required for a particular role. Relevant stakeholders often include members of the company board, senior executive team members, peers, and subordinates.

The meeting is incredibly important in ensuring that the company is getting the best possible candidates for the position. During the meeting, the retained search firm will gather information about the requirements of the role. It will also witness firsthand the management style and work culture, both of which are essential to understanding what makes someone successful at the particular company.

• Creating Position and Candidate Specification

The retained search firm will draft a description of the open position. The job description should include the reporting relationships and responsibilities of the position. The firm will also create a candidate specification document detailing core competencies, preferred experience, and soft skills.

The documents will serve as the firm’s basis when looking for the top candidates. The documents can also be used as marketing materials on job boards.

• Setting A Research Strategy

The search firm develops a strategy for targeting companies most likely to yield successful candidates for the position. The strategy will consider the level and scope of comparable roles. It will also include other key data points, such as the location of the office and the work culture.

While planning the approach to take, the search firm will also delineate companies that should not be included in the search, possibly due to sensitive client relationships or client blockage.

• Conducting Original Research On Candidates

Using the strategy as the blueprint, the search firm conducts original research with the aim of identifying and profiling ideal candidates.

Traditionally, search firms do most of the research online through candidate databases and proprietary information services to yield potential candidates for the open position. In some cases, search firms also make a query across social platforms.

• Querying Sources

After conducting online research, retained executive recruiters will then turn to their network of sources such as journalists and professional associations for any candidate referrals. Any prospects who meet the requirements of the role are added to the list of potential candidates.

• Contacting Potential Candidates

The search team contacts prospective candidates on the list to determine whether they meet the requirements of the role. If they meet the primary requirements, the search firm would then gather details on the candidate’s motivation, including what it would take for them to move to another company.

Once all listed prospects have been contacted, the search firm will decide whether more time is needed to find candidates or if it is time to begin a more in-depth interview process.

• Interviewing Top Candidates

The search firm schedules an interview with the best candidates with the aim of understanding the prospect’s career history. Interviews are done in varying manners, such as in-depth, in-person, or video conferences.

In most cases, search firms also pre-reference candidates to verify their career history, past work performances, and soft skills. Those who do not fit the requirements for the open role are removed from the list of prospects.

• Writing Candidate Profile

The search firm prepares a written Candidate Profile for each prospect they present to the client. The profile must include a candidate’s education, career history, awards, strengths, and weaknesses.

In addition to the details outlined above, the recruiter can also highlight a candidate’s key motivators and any deal-making information in the profile.

• Presenting Potential Candidates

Once the profiles are done, the executive search firm presents the candidates to its client during regular progress meetings. After presenting all the candidates, the search firm will work with the client to refine the list down to three to six (3 to 6) strong contenders.

• Scheduling Client Interviews

The search firm will schedule client interviews with the candidates to help winnow the selection down to two or three prospects.

• Check Candidate’s References

The search firm will contact the references provided by the candidate and those given by other sources available to the firm. During these checks, the team makes sure to uphold discretion and confidentiality at all times.

The search firm may also employ third-party services to verify a candidate’s employment and academic credentials, though this is not always the case.

• Extending the Offer

The search firm works closely with the client to position an offer and negotiate a package that is agreeable to both the company and the best candidate.

• Closing The Best Talent

The contract with the search firm ends when the chosen candidate accepts the offer and joins the organization. In closing the engagement, the search firm should acknowledge the people involved in the process and thank the team for a successful outcome.

While it is not necessary to stay in touch after the engagement is done, a search firm may choose to check on a candidate once in a while to ensure they have a smooth transition into their new role.

Benefits Of Hiring A Retained Search Firm

There may be hesitations on paying an initial retainer to kick off an executive search, but there are plenty of key advantages to hiring a retained search firm to help the company find top-level talent to fill out executive positions and senior roles.

Personalized Experience

All staffing firms, even contingency search firms, offer clients some level of personalization. Retained search companies, however, offer the ultimate tailored experience.

Retained searches are more rigorous than other searching methods. As such, the firm takes on a more limited number of clients, allowing them to assign a dedicated team to focus on finding the perfect candidate for the job position and keeping the client informed of their progress.

Furthermore, the upfront fee acts as a high level of investment in the search, allowing both the firm and the client to operate in good faith that each side is putting their highest efforts into finding a good candidate for the role.

Close Collaboration

The most effective staffing processes are those in which the hiring firm acts as an extension of the company and put the organization’s interests and motivations first. Retained search firms do just that.

Over the course of their engagement with the client, recruiters from the search firm get a clearer picture of the company’s needs, objectives, culture, and values. Having a deep understanding of these factors can be leveraged during the search process and can be used in future staffing engagements where such context is relevant and valuable.

Operates Discreetly

In many cases, casting a broad net and announcing an open position is the best way to go. However, it isn’t always the case for high-stakes roles like executives, board members, and vice presidents.

For starters, many candidates at this level do not feel comfortable letting others know they are looking for new job opportunities. They also might not be willing to talk directly with other companies, especially if they are a competitor.

In such situations, search firms act as intermediaries and introduce the prospect to the client while subtly gauging their interest in the position.

Retained search firms ensure the company’s search remains private and minimizes the risk of sensitive company information leaking.

Make A Good First Impression

Candidates, especially top talents, are likely inundated with inquiries from recruiters, so much so that they tend to ignore cold emails and messages on LinkedIn. Retained search firms use more nuanced sourcing techniques to connect with potential candidates.

Hiring a firm to conduct a more personal search process demonstrates that the company is serious about hiring the best talent for a role and that their resume won’t just add to a pile of CVs for reviewing. This can make a good impression and earn the company top candidates they might not have been able to reach through traditional sourcing methods.

Get Access To Hard-To-Reach Talent

According to a LinkedIn Hiring Solutions report , at least 70% of the global workforce are passive candidates who aren’t actively looking for jobs. That being said, 80% of passive workers are open to new job opportunities with other firms and companies.

Working with an executive search firm helps companies connect with passive candidates who have yet to openly advertise they are looking for a job or who may not even have considered switching companies yet but are open to hearing it.

Exclusivity

When companies hire contingency firms, they are asked to pay only after one of their candidates gets hired for the job. In many cases, this type of agreement works well for entry-level and high-volume positions that need to be filled immediately.

However, contingent searches are likely not the best option for filling out executive positions. A contingency recruiter typically passes along as many resumes as possible, hoping one of their candidates gets picked.

Contingency recruitment does not come with an exclusivity contract. This allows some companies to contact and hire multiple contingency firms to search for candidates. That being said, it also means multiple contingency search firms may contact the same candidate for the same role. This can make your company look unprofessional in the eyes of top talent.

Unlike contingent search firms, retained firms come with exclusivity. This means the firm will be the only one working on the search. With retained searches, the client will not be presented duplicate contacts. Retained firms also ensure the candidate sees the company presented in the best possible light.

Specialized Expertise

When companies work with an executive-retained search firm, they are not only gaining access to their executive headhunting skills but also their recruiting expertise. The right recruiter will function almost as a company’s consultant, providing insights and feedback gained through years of experience.

Additionally, a good retained search firm will ask questions that prompt discussion about what the company is looking for in the perfect candidate in terms of necessary skills and characteristics. The search firm can also point out things the client may not have considered that will help them identify who might be the perfect fit.

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What is a Retained Search and is it Right for My Company?

April 28, 2023 | Recruiting Insights

As a company seeking to employ the best talent, you may find yourself weighing various recruiting models and agreements. Among these, you’ve likely encountered the term “retained search.” But what exactly does retained search mean, and how does it measure up against other recruitment solutions?

Here, we’ll explore the benefits of retained search agreements and help you decide whether it’s the right fit to secure the ideal hire.

What is a Retained Search?

A retained search agreement, also called an executive search agreement or retained recruitment, is a personalized, high-touch recruitment model predominately used to source and hire for executive-level and specialized roles. The term “retained” arises from the initial retainer fee that ensures the dedicated engagement of the recruitment firm for the entire search duration.

In a retained search, professional recruiters, or headhunters, partner with your company’s leadership team, HR department, and other stakeholders, like the board of directors, to understand the qualities needed in the right candidate. 

The recruiting team evaluates more than just skills; they consider the organization’s culture, its strategic goals, and the team dynamics the ideal candidate would need to integrate with. They use advanced assessment tools to narrow down a select pool of candidates, presenting only the very best prospects for client consideration. 

While retained recruitment comes with an up-front cost to the client, it’s easily offset by the financial gains the right candidate can bring to the organization over the long term. An effective new hire can drive innovation, increase revenue, and lead the company into the next phase of success. Conversely, making a poor hiring decision for a pivotal role can negatively impact the organization and, in extreme cases, lead to its failure.

How are Retained Search Firms Compensated?

Under a retained search agreement, a fee is paid upfront to initiate the search process. The fee, covered by the hiring company, is usually calculated as a percentage of the prospective hire’s total annual compensation during their first year of employment.

For instance, if a company offers a starting salary of $100,000 for a role, the search firm may charge a fee of 25%, or $25,000. In some industries, bonuses, and commissions are also included when determining the annual salary.

The client pays a portion of the fee upfront, with the balance invoiced at the end of the contract. This structure accommodates possible adjustments, like if the advertised salary is $100,000, but the candidate negotiates it up to $110,000. In such cases, the remaining payment due would be revised accordingly.

Benefits of Working with a Retained Search Firm

Personalized experience.

All recruiting relationships should come with some degree of personalization, but retained search agreements offer the ultimate tailored experience. Since the search is more rigorous, the firm typically takes on a more limited number of job openings, allowing them to focus more intimately on your search and keep you closely informed of its progress. 

Furthermore, your up-front retainer demonstrates a high level of commitment to the search, which allows all parties to confidently put forth their efforts into the successful placement of the right candidate. 

Long-term partnership

Effective staffing partnerships resemble an extension of your company, aligning seamlessly with its interests and motivations. Retained recruitment is the perfect environment for developing such a relationship. 

Through their close collaboration with your company, recruiters gain a comprehensive understanding of your needs, objectives, and values – the driving forces behind the search. This invaluable insight can be used for the current search and future staffing requirements across different levels where a similar context is crucial.

Discreet search process

For most open positions, it pays to cast a broad net and spread the word that you’re looking to hire far and wide. But this isn’t always the case for high-stakes roles like executive-level positions. 

Many candidates at this level often prefer not to let others know they’re looking for new opportunities. They might be unwilling to speak directly with a competitor of their current organization or may even have a contract that prevents it. In such a situation, the search firm serves as a neutral intermediary, making the introduction with the candidate and subtly gauging their interest in the position in a delicate manner. 

The need for discretion goes the other way, too. Often as a company, you don’t want to make it widely known that you’re looking to fill such a high-level position or that a vacancy on your leadership team is imminent. Working with a recruiting firm on a retainer ensures your search remains private and minimizes the risk of sensitive company information falling into the wrong hands. 

Conveys serious intent

Top talent is inundated with inquiries from recruiters hoping to connect, so much so that many ignore cold emails and connection requests on LinkedIn. A retained search, however, utilizes more nuanced sourcing techniques that differ from those in a run-of-the-mill job search. 

The more personal, one-on-one process demonstrates to candidates that you’re serious and that their resume isn’t just one in a stack of hundreds you’re reviewing. This can put you in a better position to engage top candidates you might not be able to reach through standard sourcing methods. 

Access to passive talent

According to a LinkedIn Hiring Solutions report, 70% of the global workforce consists of passive candidates—candidates who aren’t actively looking for a new job. And yet, these workers are often high performers who would make excellent candidates for the executive position you’re looking to fill. 

Working with an executive search firm helps you connect with these and other hard-to-reach candidates who aren’t openly advertising that they’re job searching or may not have even considered it yet, but would be open to hearing about a new opportunity.  

Retained search firms spend years making inroads in their respective industries, earning candidates’ trust, and building professional rapport. These relationships give them the standing to bring forth your opportunity and make a recommendation about working for your company that candidates will give thoughtful consideration to.

Related: Attracting Passive Candidates: Ways to Secure Top Talent

Exlusvie representation

Retained search, unlike contingent search, where payment is based on successful placement, ensures that your chosen firm is the only one conducting the search. This prevents the potential embarrassment of multiple recruiters contacting the same candidate and ensures your company is presented in the best light.

Specialized expertise

When you work with a retained search team, you’re not only gaining access to their executive headhunting skills but their recruiting expertise. In your close working relationship, the right retained recruiting partner will function almost as a consultant, providing you with helpful insights and feedback honed through years of experience that will sharpen your hiring strategy.

A good retained search firm will ask you the right questions, prompting discussions that get to the heart of what you’re looking for in the perfect candidate. They’ll help guide your thinking around the necessary skills and characteristics and potentially point out things you may not have considered that will aid you in identifying the perfect fit. 

Related: The Benefits of Working with a Staffing Agency

Entrust Your Search to the Retained Recruitment Experts

Your leadership team is one of your company’s greatest assets. The roles on this team are too important to leave to chance or guesswork. To fill your next executive-level or niche role, turn to the retained search professionals at 4 Corner Resources. 

Our focus is always on quality over quantity, so we accept fewer requisitions to give greater attention to every placement. We pride ourselves on being the most responsive and accurate in the industry, with a history of success to prove it. We’ve placed more than 15,000 candidates since 2006, and our reputation for results has earned us a 92% client retention rate.

Start your retained search with 4CR today by scheduling your complimentary consultation now.

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About Pete Newsome

Pete Newsome is the President of 4 Corner Resources, the staffing and recruiting firm he founded in 2005. 4 Corner is a member of the American Staffing Association and TechServe Alliance, and the top-rated staffing company in Central Florida. Recent awards and recognition include being named to Forbes’ Best Recruiting Firms in America, The Seminole 100, and The Golden 100. Pete also founded ze ngig , to offer comprehensive career advice, tools, and resources for students and professionals. He hosts two podcasts, Hire Calling and Finding Career Zen, and is blazing new trails in recruitment marketing with the latest artificial intelligence (AI) technology. C onnect with Pete on LinkedIn

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Contingency vs. Retained Recruitment: Which is Better?

If you’re  looking for a recruitment agency  to help you hire new talent, then there’s a question that may well be on your mind. what is the difference between contingency recruitment and retained recruitment, and which is better for you.

The answer is surprisingly simple – so let us explain …

To someone who isn’t from a recruitment background, the terms  ‘contingency’ and ‘ retained’  probably mean very little. Today, we’re going to cut through the jargon and explain not only what they mean, but also the pros and cons that would make you choose one over the other.

First, let’s have a look at why you would want to use an agency over other methods of recruitment:

Why use a recruitment agency in the first place?

Recently, we published an article that looked at the  methods used by candidates to find employment  – with some interesting results. Our survey indicated that over 50% of candidates used a recruitment agency as their preferred method when looking for a job. Agency usage was also shown to be on the rise – up 10% since 2013 – while job board use appeared to drop by 27% in the same period.

It seems that candidates are discovering what a quality recruitment agency can do for them – but what can they do for you, the employer?

Agency Central provides a service that will make this process easy.

Well, as you know, recruitment can be an arduous task – and here the bulk of the heavy lifting will be done for you. Just imagine:

No more  paper avalanches as that stack of CVs you’ve been trying to get chance to read through for the past week slowly slides down the back of your desk …

No more  getting excited over a seemingly great candidate who then goes off the radar for no apparent reason. The list goes on.  It’s just easier  to get someone else to handle all the donkey work for you. When you do decide to take someone to interview, you’ll be briefed by someone who’s probably spoken to the candidate in person already – so there’ll be no nasty surprises.

Recruitment agencies aren’t for everyone, but if you like the idea of  saving time and effort , while improving the quality of the hires you make, then an agency is well worth a go.

What is contingency recruitment?

You’re probably familiar with contingency planning – but that’s not what we’re discussing here. This time the contingency is that  the recruiter doesn’t get paid  by you unless you choose to employ a candidate that they put forward.

The power here is very much in the hands of you – the employer – and you often see multiple recruitment agencies trying to fill a role all at once. This might even involve competing against an employer’s internal HR department, who are also searching for a candidate. As you can imagine, this can all get very competitive, very quickly.

Contingency recruitment is simple. If the recruiter does not supply the ‘winning’ candidate, then they don’t get paid.

Generally speaking, contingency recruitment tends to be the more mass-market of the two approaches. The role you’d be filling could be anything – Cleaner, Manager, Candlestick Maker, the list goes on …

It’s not limited to generic positions either – and you’ll often find that specialised roles in industries like IT and Engineering are filled this way. There are even recruitment agencies that  specialise  in certain industries – with consultants often having professional experience in the roles they recruit for.

Contingency Recruitment: What are the benefits?

The benefits of contingency recruitment for the employer are fairly obvious – because  you’re in charge  of the whole process.

If a recruitment agency operating on contingency sends you candidates that you don’t feel are suitable, you simply don’t have to interview them – or pay a fee. This means that it’s in the agency’s interest to send you the best candidates they can find – and as quickly as possible.

Contingency recruitment therefore makes an excellent choice when a candidate is required quickly – or if you have multiple positions to fill …

The candidates an agency puts forward will fit the bill, and will be capable of doing the job you need them to do. Many recruitment agencies also offer services such as  psychometric testing  – which can help to ensure that a candidate will fit in with the particular culture of your organisation.

The Disadvantages of Contingency Recruitment

As for the potential downsides of contingency recruitment – well just consider the benefits and then put yourself in the recruiter’s shoes …

If you were a recruiter and you got an inkling that there were multiple firms working on a job, or that you were up against an internal HR team, would you bother expending resources on that project? Probably not.

Instead, you’d probably put your efforts into sourcing a top-quality candidate for a job you know you would end up getting paid for. This means that it pays to  limit the number of recruiters   working on a contingency contract – and to make the fact that you have done this clear to them. This way, you get less people working on the job, but they will all have a fair chance of success.

Pricing structure of contingency recruitment

As we mention above, contingency recruitment is  simple . If the recruiter does not supply the ‘winning’ candidate, then they don’t get paid. Aside from a few exceptions, in the UK, it is illegal for a recruitment agency to charge a fee to a candidate because of two pieces of legislation:

• The  Employment Agencies Act 1973
• The  Conduct of Employment Agencies and Employment Businesses Regulations 2003 .

This means that the agency won’t make any money if they are unsuccessful in filling your vacancy. The fee you pay to a contingency recruiter will be a percentage of the candidate’s starting annual salary, and varies by agency. This fee is typically anything between  15-30% of salary  (although this varies) – and will reflect factors including the recruiter’s experience level and reputation.

What is retained recruitment?

Retained recruitment is the  opposite  of contingency recruitment. Here, you’re paying to ‘retain’ a recruiter to your cause – guaranteeing them exclusivity and an income from the job once they find a suitable candidate. While you will be giving up some control over the process here, that’s not necessarily a bad thing …

In this business, a recruiter’s reputation is everything.

Retained recruitment jobs tend to take place almost exclusively at the top-end of the market – where salaries are high, and suitable candidates are scarce. Often known by other names like ‘headhunting’, ‘search and selection’, or ‘ executive search ’, retained recruitment is associated with  hard to fill  job roles like Art Director, Head Chef, Chief Engineer, and Chief Executive.

Benefits of retained recruitment

As we saw above, exclusivity will get a recruiter to work much harder for your cause. They are motivated to do this because they stand a fair chance of making money from it – and who could blame them? Because retained recruitment  guarantees exclusivity , you know that the consultant doing it is going to exercise consideration and due diligence in sourcing you candidates. This is a boutique approach, and suits the top-end of the recruitment market, where potential candidates aren’t always looking for a new job.

In the rarefied atmosphere of big salaries, bigger benefits, and massive levels of responsibility, discretion is essential – and headhunters will go out of their way to ensure that confidentiality is maintained. This type of recruiter maintains a large, informal network – and this is what could make a headhunter to your business.

A headhunter will generally provide you with dossiers on four or five candidates who have been thoroughly researched and approached on your behalf. All that’s left for you to do is carry out the final interviews.

Downsides of retained recruitment

The main downside of retained recruitment when compared to a contingency approach, is that you are placing much more trust and investing more resources in the recruiter. As you will see below, the cost structure of a retained assignment is different to the contingency method – and it means that a recruiter will be paid a percentage of the final fee  before  a candidate has been presented to you.

While retained recruitment is a much  slower  process than contingency recruitment, the reason for this should be obvious. With a retained approach, the candidates you meet should be perfectly suited to the complex job role in question – and this takes time for a recruiter to set up.

Pricing Structure of Retained Recruitment

Headhunting has a very different pricing structure to contingency recruitment. The high-end nature of this business means that recruiters need to be sure they will be paid a fee for their efforts.

When the fee is paid will vary between different agencies – but there will often be an  ‘up-front’  charge to set the ball rolling. Sometimes a firm will request a  second  installment upon your receipt of their shortlist of candidates – and then there will be a  final  fee paid once your chosen candidate has been employed.

The final cost of using a recruitment agency on a retained basis is a percentage of the starting annual salary the candidate will be paid – and this percentage is variable –  up to around 50% . The percentage price tends to be slightly higher in retained recruitment – and this can vary dramatically depending on the role and agency concerned. Do remember that in this business, a recruiter’s  reputation  should precede them.

Infographic: Contingency vs Retained Recruitment Agencies 

Which recruitment method should you choose – contingency or retained?

Given that contingency and retained recruitment are two very different beasts, how do you decide which one is right for your vacancy? At the top and bottom of the salary spectrum, the answer is simple. For lower-paid job roles, contingency recruitment will usually be best – whereas for the highest paid jobs, a retained headhunter will often deliver superior results.

This has more to do with supply and demand than anything else. Contingency recruitment works well for finding good candidates in the crowded labour market at the  bottom of the salary spectrum . It works so well in fact, that a retained approach would be overkill.

Agency Central exists to help employers find the recruitment agency that’s perfect for their needs.

But, try using contingency recruitment at the  top end of the market , where qualified candidates are scarce, and you may begin to run into problems – especially if you are assigning the task to more than one firm.

When you are recruiting towards the  middle of the salary spectrum  however, this difference is not so clear-cut. While some roles at this level are relatively easy to fill – requiring skills that are widespread, others are not, and require a candidate with specialist experience.

At this point, there are a number of options available to you as an employer:

• You could choose the  contingency  approach – which is likely to fill the role quickly and with a good candidate, but where speed is valued over perfection.
• You could go with a  retained  / headhunting approach – which takes longer and is potentially more expensive, but should return a great candidate.
• Or, you could choose to go with a  specialist  recruiter for that particular sector or job role through either the contingency or retained route.

Specialist recruiters come in many forms – with some firms dedicating themselves to a single market sector like education or engineering. Often you will find that a large recruitment agency has an arm which deals solely with a certain specialism – which can be beneficial if you need the reach that a bigger operation can provide.

Finally, there are smaller firms with multiple specialisms – who often excel in the breadth of local knowledge they can provide to your cause. The type of firm you select for this task is up to you, but Agency Central is a  free and easy  directory of recruitment agencies. We can save you a lot of time and effort finding the right people to work with.

How to find recruitment agencies using Agency Central’s free online directory

Because the market for retained recruitment is high-end (and therefore small), you’ll find that the majority of the market is made up of contingency recruitment services. When you’re looking for a specific type of recruitment agency, it can be difficult – especially if you’re trying to fill a niche role. This is exactly the problem that Agency Central was set up to solve.

Agency Central exists to help employers  find the agency that’s perfect  for their needs – whether that’s due to their location, specialism, or other expertise.

How to find a contingency recruitment agency

So, say that you were looking for recruitment agencies in London – you’d go to our homepage, fill in the details of what you’re looking for, and get taken to the  London recruitment agencies  page. This page gives you a list of agencies that recruit in the area and industry you selected.

Likewise, if you wanted to  recruit a marketing manager , you’d make your search on the homepage, and be taken to a customised list of results based on that specialism in your location. Alternatively, you could click on the link to browse recruitment agencies based on the industries they work in.

How to find a retained recruiter or headhunter

If you were looking to fill a senior vacancy, and wanted to deal with a recruiter in a retained capacity, then the process would be very similar.

This time however, when you went to our homepage, you’d need to select ‘ Headhunting ‘ under the ‘Industry’ category. Next, you would select the industry sub-sector you were interested in recruiting in.  Pharmaceuticals industry headhunters  for instance, have their own page.

Once you had filled in these details, you would simply fill out the other fields, and our system would take you to a page listing all companies offering headhunting in your industry and area.

Choosing the right recruitment agency to work with can make the difference when you’re looking for the perfect candidate, so it pays to make a good decision. Agency Central provides a service that will make this process easy. Whether you’re looking for a  bricklayer , a  chef , or a  finance director , we know a recruitment agency who can find them for you.

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Retained, Retingency and Contingency Searches

In the recruiting industry searches are typically conducted using retained , retingency (“container”), and contingency search models.  Understanding the differences between these models is critical in determining which level of service is needed for a particular search.

Retained Search

A retained search is preferable in cases where a company has a pressing executive level need that requires a candidate who will hold key leadership responsibilities and whose services are integral to overall organizational success.  Given the strategic importance of these positions, there is often a degree of urgency and/or confidentiality that accompanies this type of search.  Retained searches are given priority status in terms of the level of consulting talent assigned to conduct the search and the time and resources that are dedicated to the project.

CSI takes great care in working with a client company to formulate a clear and objective outcome-driven job description. Furthermore, using collaboratively derived criteria, CSI carefully identifies and screens potential candidates based on their interpersonal styles, attributes, and work histories in order to insure the greatest potential for “culture fit” and positive organizational impact.  CSI also offers additional profiling resources using industry specific and validated objective testing instruments should this be a desired service by a client company.

The fees for a retained search are typically higher than in contingency assignments, usually 30-33% of the candidate’s first year’s annual compensation, given the level of energy and resources that a search firm invests in sourcing quality candidates.  These fees are usually paid out over three set time periods (usually at the beginning, at 45, and then again at 90 days) as previously established “deliverables” occur.

The advantages of a retained search are significant. First, retained searches take precedence over contingency assignments due to the mutual commitments that are involved in the search process.  A client company is essentially securing a commitment from the search firm to prioritize the search.  Search firms prioritize searches by dedicating a team of sourcing professionals to the project, setting target dates for specified deliverables, use direct deep-channel sourcing, and giving the client company the right of first refusal of sourced candidates.  Second, initiating a retained search allows potential candidates to see how serious the hiring company is about filling the position, therefore giving credibility and legitimacy to the search firm’s consultants when discussing this position with potential applicants.

Retingency / Container Search

A retingency search offers several benefits to both the client company and the search firm in that many of the strengths of the retained search model can be captured while at the same time reducing the financial risks for both parties.  In a retingency search, the fee is typically divided into two parts.  The first part (“container”) is paid at the beginning of the search and is typically one third of the anticipated search fee.  The last part (remaining two thirds of the search fee) is paid when the search has been successfully completed.  While a client company will not get all the benefits of a retained search using this model, the results are usually more satisfactory than a straight contingency search.  CSI offers customized services for specialized search assignments tailored to the needs of individual companies.  Please contact us for further information.

Contingency Search

A contingency search by definition means that the search firm will only collect a fee if they find and place a suitable candidate for the position in question.  This type of search may or may not be structured contractually with the client company and it is 100% “back end” loaded.  Therefore, regardless of the number of qualified candidates presented, if none are ultimately hired, the search firm in question earns nothing.  A strict contingency search means that there is no exclusivity to the arrangement and therefore the client company is free to use other search firms or source other candidates on their own.  This arrangement begs the question as to whether the search firm actually has such a “client” given the absence of any stated or written commitments for exclusivity.  It also explains why contingency searches are often given less energy by recruiting professionals because of the increased risk of no return on invested energy and resources.

In a contingent search, the search process is usually less structured and less about a precise candidate “fit” and more about getting potentially qualified candidates in front of the client so that the client can make his or her own final assessment.  Often candidates in such searches are drawn from a search firm’s existing database or from public job boards.  While these methods can certainly uncover good candidates, such approaches leave a vast pool of talented passive candidates untapped.  With less time spent on securing a clear job description and the candidate sourcing methods that are often employed in a contingency search, the chance of a candidate/client mismatch is significantly increased.  Many good candidates get hired for the wrong reasons and therefore care should be exercised when embarking on a contingency search to ensure that there is a well-defined job description clearly communicated to and understood by the recruiter conducting the search.  Fees for contingency search usually average around 25%, although this varies widely depending on geographic location being sourced, the industry and specific talent being recruited, and the number of positions being filled.

Client Request for Services: Let CSI Executive Search know of an opening or openings of strategic importance to your organization by submitting a CLIENT REQUEST FOR SERVICES . Or, give us a call at 877.329.1825 .

The Benefits of Using Retained Search

Finding the right talent isn’t easy, especially when recruiting for very specific, niche roles that require unique skill sets. Here, you’ll learn how to best utilize your time with retained search and turn your challenges into opportunities. Onward to finding the best candidate!

Help with the hiring process

As the hiring manager responsible for filling a niche position, you’re probably wondering which recruitment service will be the most helpful. If you have a niche role for an unusual skill set or a vacancy that requires very specific qualifications, retained search is your best option. Retained search (a type of executive search) allows a recruitment specialist to focus on and prioritize your role in a more proactive way. 

What is a retained search?

Recruitment agencies use the term “retained search” to refer to “headhunting,” a proactive recruiting method. This type of recruitment search is a partnership between the client and the recruiter, shortlisting the best and most qualified candidates. Other terms include “engaged search” or “executive hire” but all have the same meaning.

Contingent vs. Retained search: What's the difference?

In a contingent search, a fixed price per placement is agreed upon at the start, payable on successful candidate’s start date — in other words, a contingent recruiter is only paid if they succeed at finding someone. In a retained search, however, a percentage of the agreed price is paid up-front with the remainder payable upon successful completion of the assignment. If the assignment is not completed, the payment is refunded in full. With fill rates at 85-95%, this option offers a measure of certainty and a full commitment to fill the vacancy.  Without a guaranteed commission, a contingent recruiter is assuming a higher risk — and as such, they may be motivated to place candidates faster than their retained search counterparts. Since a retained recruiter receives a flat fee upfront, their income is not dependent on the outcome. Many companies prefer this method for its convenience and higher level of certainty and stability. 

Retained search fees

As mentioned above, the difference between Contingent and Retained Search is with retained search the hiring manager pays an up-front fee in order to have the search conducted. A contingent search typically works under a “No Win, No Fee” method. The contingency is the recruitment firm is not paid until the candidate accepts the position with the client.  

Retained search agreement

Often, there is competition with other recruitment firms. Contingent search may engage multiple recruitment firms, usually with strict submission deadlines. The hiring manager only pays the recruitment firm that places the candidate. 

Benefits of using Retained Search

There are many benefits to retained search over contingent. Here are 10 reasons to utilize retained search for your next big hire: 

1. Higher priority level

The upfront structure of retained search ensures that the placement takes higher priority than commission-based placements. 

2. Lower risk of bad hires

The focus of a retained search is quality. You’ll often be working with the best of the best recruiters with a high success rate. When it’s crucial to get the right candidate for a high-stakes role, retained search offers a lower risk of a bad hire, and thus a higher certainty and comfort level.

3. The best, not the fastest

When there’s not a race to complete the search, more time can be taken to ensure the very best and most qualified candidate is found — greatly benefiting the company in the long-run. 

4. Finding rare skill sets

A retained search opens up potential candidates who are already employed, meaning they’re able to expand their search to a wider range of individuals — increasing the chances of finding the person with the exact, unique skill sets needed for the niche role. 

5. More proactivity 

As mentioned above, retained search takes a more proactive approach, considering those who aren’t actively seeking a new role. This enables a much wider selection than just those who are in a database, answered ads or shown interest themselves. 

6. Access to resources you don’t have otherwise

Simply put, most companies don’t have the time and resources needed to find the best high-level candidate themselves. Utilizing a retained search firm can actually save them time and money because the process will probably take less time than trying to do it internally.

7. More customized 

Retained search enables a more customized search for roles that are often very unique. It’s not a one-size-fits-all approach, but rather the recruiter takes more time to gain a thorough understanding of what the ideal candidate possesses. 

8. Most vetted candidates

With retained search, you can have confidence knowing your candidates have been fully vetted — from more strenuous background checks, reference checks and so on, you can know only the most genuinely-qualified candidates, both skill-wise and culturally, will be presented. 

9. More feedback and real-time updates

Retained search recruiters will provide you with more helpful information throughout the process, including market intelligence, competition, timelines and so on. 

10. Multiple options so the best can be chosen

Versus providing only one potential candidate to fill the role, most retained search agencies will present a handful of highly-qualified candidates who fit skill, culture and salary requirements, so that truly the best fit can be chosen. 

With retained search, priority trumps speed 

When an agency is given a new role to fill, it must be prioritized. There is not enough time to treat every new role as the number one priority. Further, for a contingent search, you might have given your role to multiple recruiting agencies. Those agencies want to fill that role as fast as they possibly can, creating a race to the finish line to be paid. Sometimes, speed can take priority over candidate quality. Retained or executive search gives you access to a team committed to giving your role priority. 

Quality over quantity

Looking for candidates for multiple roles? Using multiple recruitment firms can mean juggling many candidates and having to keep up with which candidate comes from which firm. A retained search offers a single point of contact for the entire recruitment process. You are kept informed at every phase so you can keep track of the activity, enabling complete control of the process. Instead of being overwhelmed by multiple candidates from multiple sources, you now have a streamlined and time-effective process. With an upfront financial investment, retained search enables you to focus on other tasks while the recruitment process is handled for you.   The best part? The myth that retained search is more costly than contingent search doesn't apply at Brunel. The initial payment is deducted from your invoice. With Brunel, you get higher quality candidates and, in our experience, more satisfied hiring managers. Contact us today for information on how Brunel’s retained search will help you find the talent you need to grow your company.

Brunel offers Retained Search in:

• Infrastructure
• Oil and Gas
• Renewable Energy

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Retainer vs contingency recruiting: how much of a difference is there.

The hidden risks of using contingency recruiting as a resource for hiring.

At first blush, when presented with the various options available when looking to engage a recruiter or search firm, the benefits of using a contingency recruiter over a retained search firm seem boldly obvious—with a contingency recruiter, you don’t have to pay them until the job is done, in this case until the hire is made. For retained firms, as the term indicates, you have to pay money up front before the search even begins, and (gulp) depending upon how long the search takes, you might end up paying the full fee for service before you’ve found a candidate you like enough to extend an offer, get them to accept it, and spin up the new hire to start adding value in their new position.

So, why does retained search exist as a service offering and business model? What do some know about its benefits that others don’t? Said differently, what don’t some know about the risks and pitfalls to using contingency recruiting services when going out to the talent marketplace to find your next team addition?

Here’s a short primer on the 13 biggest differences between the two, and which to use in what circumstances when you’re considering a third party recruiting resource to help you in your next hire or to build out your executive team.

OK, so now that we’ve shone more light on some of the lesser understood but important differences between these two recruiting structures, when does contingency make sense to use as recruiting alternative? Here are 5—

• If a hire into a position has low impact if failure occurs. In other words, very little is lost trying contingency first, even if it fails.
• If it’s a “commodity hire,” where qualified candidates are plentiful with the skills and experience you’re looking for and are readily available and abundant in the marketplace.
• If a junior level hire. If hiring out of college, trade school, or other advanced degree program, you’re likely hiring for non-managerial traits, an individual contributor profile vs. managerial or leadership and contingency is a good potential solution here
• If the position is lower in compensation. Typically retained search firms work on positions with minimum cash compensation of $175,000 on up.
• When unsure a hire is actually going to take place. In other words, If you’re looking to assess the talent market, and benchmark talent to compare against who you currently have in the role doing the job now. Here it makes sense to use contingency because it’s quite possible you’ll end up deciding to stick with the employee you have in a “devil I know is likely better than the new one I don’t.”

And herein ends our primer on contingency recruiting versus retained search. We encourage you with this additional information to weigh which is ultimately the best solution for you and your organization.

Topics: executive hiring , executive team , Retained Executive search , Private Equity , hiring industry trends , metrics of a successful hire , BSG news , video , BSG clients , clark waterfall , boutique search firm , shrek , thought leadership , kirsten

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Why We Love Retained Search (And You Should Too!)

Mark Whitby

February 21, 2014

What percentage of your business is contingency, versus retained search? If you answered “all” or “mostly contingency” then you’re missing out. Because for permanent, mid to senior level positions then there’s no reason you shouldn’t receive part of your fee up front.

It always surprizes me how few recruiters pitch for a retainer. Usually it’s due to either a lack of awareness (“I never thought about it before”), a limiting belief (“I don’t think my clients would agree”) and/or lack of training (“I’ve never been taught how to do it”).

That’s a shame because for the recruiters who have the skills and confidence to win retained search assignments, the benefits are substantial:

• A retainer is the highest form of client commitment, and sends a clear signal that they’re serious about filling the position.
• More commitment usually leads to improved communication and co-operation throughout the placement process.  Many of the roadblocks that contingency recruiters come up against are removed.
• Your client works with you exclusively, so you eliminate the competition.
• Your chances of filling the job increase dramatically, so you’ll make more placements.
• More placements equal increased billings, so you make more money for the same (or less) effort.
• You avoid wasting time on dead-end searches, so you experience less frustration.
• Your clients perceive you as a true “consultant” rather than just a salesperson, so you get treated with more respect.
• Your clients are happy to receive and return your calls, so you waste less time chasing them for feedback.
• Your clients are receptive to your advice, so you gain greater influence over the hiring process.  That often translates into faster decisions and fewer deal-breakers.
• You can predict your pipeline with greater accuracy, achieve improved cash-flow, and feel a greater sense of security.
• Because you’re not in a “race” against other agencies, you can do the job properly – and enjoy greater job satisfaction. You have an opportunity to add real value to the recruitment process and feel an increased sense of pride in what you do.
• When you re-position yourself as a retained search consultant / firm, you gain prestige with both clients and candidates. The assumption is that if you’re a retained recruiter, you must be good.
• Once your clients are accustomed to working with you this way, you can win repeat business on a retained basis, again and again.
• The more retained business you win, the more retained opportunities you will attract. Thus begins a “Virtuous Cycle” of success which snowballs and gains momentum.
• Best of all, you are assured of getting paid. Even if the client cancels the order before you complete the assignment — for example due to a merger, acquisition or internal re-structure — then at least you will have received 1/3 (or more) of your fee, which is better than nothing!

Retained business can be extremely rewarding, not just financially but also in terms of achieving self-actualization. If you desire to serve your clients at the highest level, and receive the maximum client commitment in return, then resolve to increase percentage of retained work you win – starting now.

Let Mark train your team! He offers a course called “Secrets of Selling Retained Assignments.” A few of his clients have won their first retainer within 7 days of attending the course! For a free course outline, with no obligation, please contact us .

About the Author

Mark Whitby is one of the world's leading coaches for the recruitment industry. Since 2001, he has trained over 10,000 recruiters in 34 countries. Mark has helped recruiters to double or triple their billings and owners to increase their team's sales by 67% in 90 days.

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The Definitive Guide to Executive Search Firms and Pricing

What are the fees of executive search firms.

Table of Contents

First, Determine the Search Firm Type

Whenever you have an important board or senior-level opening to fill, it’s reasonable to ask about executive search pricing. You may wonder generally, “What do search firms charge in executive search fees?” or more to the point, “How much will my executive search cost?” To find out what an executive search firm will charge for its services, you first must determine what type of executive recruiting firm you want to use.

Executive Search Firm Types

4 kinds of firms that can help you fill executive-level roles. They primarily are based on how you pay for the search and the amount of the fee — the pricing model.

Retained Search Firms

Retained search firms are the gold standard for senior executive-level roles that are important to a company’s success. Retained search firms work by retainer, much like attorneys who are paid retainers. And like attorneys, they are paid regardless of the outcome. In other words, you may decide not to hire any of the candidates that the retained search firm presents to you. (A retained search firm is not in a position to hire for you.)

A retained search firm works on the search on an exclusive basis. No other search firms or recruiters, internal or external, work on the search. They forge a close relationship with the client as trusted advisors and leadership consultants. They offer deep industry, functional, and geographic expertise. They attract top-performing talent because they understand how to engage their interest. They provide access to senior executives because those leaders are “friends of the firm”.

Because retained firms specialize in senior executive search — it is all that they do — they remain the preferred choice for important senior executive searches. As a result, their fees are higher, and they focus on the quality of candidates over quantity.

Contingency Search Firms

Contingency search firms work on a contingency basis, much like contingency attorneys who only get paid if they win lawsuits. Contingency firms are only paid if they make a placement. In other words, if you don’t hire any of the candidates that the contingency firm has presented to you, they don’t get paid. Consequently, the contingency firm may not fill the position for you. In fact, because you’re not paying them to do the work of recruiting, they don’t have to work on the search at all and they don’t have to tell you that they’ve abandoned the search. Their willingness to work on the search depends on how easily and quickly they can fill the search — since their livelihood depends on making placements.

Contingency Firms Are Not “Free”. You Still Pay.

Contingency firms will tell you the reason to choose them is that they’re “free”. You don’t pay them to do the work. Yet, the catch is if they successfully make a placement — which is the goal — you do pay. If they don’t fill the role, you still pay a price because your open position languishes unfilled. You have no idea what, if anything, has been done to fill the position.

Moreover, once a contingency firm discovers a Most Placeable Candidate (MPC), they market that candidate to your competitors. You can’t really blame them — they have to make placements to get paid, but it sets up a weird relationship. Are they really in your corner if they’re presenting the candidate you want to hire to multiple employers? When an MPC receives multiple offers, it drives up the compensation, which in turn increases the contingency placement fee. It doesn’t do a lot for trust.

Contingency Firms Focus on Non-Executive Roles

Contingency firms are often the choice for non-executive roles — especially those that are easier to fill. Additionally, contingency firms charge lower percentage fees than retained search firms. As a result, their fees are lower. Moreover, most contingency firm agreements are not exclusive. When multiple firms work on a search, they race to make placements. So they focus on the quantity of candidates over quality.

Hybrid Retained- Contingency Firms

Hybrid Retained-Contingency Search Firms — so-called Container or Retingency Firms — split the difference between retained and contingency search firms. So you pay part of the fee as a retainer and pay the rest of the fee when the placement is made. So you, the client, have a little skin in the game — and have a vested in their success. Usually, hybrid search firms accept exclusive engagements — meaning they are the only search firm working on the search. Hybrid agreements give Container firms a little more breathing room to find better candidates.

Yet, like Contingency Search Firms, Hybrid Container Firms also known as Retingency Firms still tend to focus on active candidates — people actively looking for work. Rarely do they invest in executive search research to identify top-performing candidates. They lack the deep expertise that retained search firms have. That is why they do not operate at the senior executive level. Yet they help fill a gap in the marketplace — the need to fill Vice President roles that retained search firms refuse to take on.

Executive Search Research Firms

Executive search research firms are the perfect choice for companies seeking the quality of retained search with an opportunity to save. Recruiting research firms offer “unbundled search”, meaning they focus on the part of the search process where internal search firms could use support. Often, recruiting research firms focus on the time-consuming front end of the executive search process. They excel at identifying ideal candidates. They conduct initial outreach to determine if a prospect is interested and qualified. They produce actionable candidates ready to move forward for interviews. The internal executive recruiting team manages the remainder of the search through to hiring and onboarding the executive.

Recruitment research firms are an ideal choice for large corporations that have created a corporate executive search function featuring in-house executive search teams. By conducting executive searches themselves, the teams can save the company millions of dollars in retained search fees.

Executive search research firms regularly collaborate with internal executive recruiting teams. Interestingly, retained search firms regularly turn to executive search research firms for help. They often lack the expertise or ability to find the ideal candidates. Interestingly, retained search firms often turn to recruitment research firms to find the candidates they need for their executive search engagements. So, when companies use recruiting research firms, they are cutting out the middle man — pricier retained search firms — and are going straight to the source of ideal candidates. Due to their research expertise, recruiting research firms hold the power to make searches smarter and more strategic.

Next, Select the Best Search Firm Type for Your Search

What is the level and importance of the role.

If the position is a C-level role such as Chief Executive Officer (CEO) , Chief Financial Officer (CFO) , or Chief Technology Officer (CTO) , the best choice is usually retained executive search. The same goes for Executive Vice Presidents, Senior Vice Presidents, General Managers, Managing Directors, and — usually — Vice Presidents.

Retained search firms focus exclusively on board and senior executive-level positions because those positions are important. They have a direct bearing on the company’s success. When a role is important enough, investing in retained executive search is standard practice. If hiring the right candidate for the position could have a material impact on your company’s ability to succeed, a retained search firm may be the best option — with a few caveats.

Is Your Company Large Enough or Well-Funded Enough?

One of the caveats for selecting a retained search firm is your company must be large enough to afford the fee. Retained search fees often exceed $100 thousand. Consequently, a company usually needs to be large enough to afford retained search. What’s large enough? Usually, they’re companies with revenues of $100 million or companies that have funding to pay for a retained search, such as later-stage venture capital firm startups.

To help cash-conscious later-stage startups, some retained search firms including The Good Search will consider taking part of the fee in options. Or they forge an agreement with a venture capital firm to conduct multiple searches across the VC firm’s portfolio companies for a reduced fee.

Can You Afford Not to Use Retained Search?

Another question to consider is whether you can afford not to use retained search. To risk a double negative, retained search firms deliver candidates you cannot afford not to hire. In other words, you hire them because they will catapult your company lightyears beyond where you are today. So, many companies find ways to make that investment in retained search. So, as you consider whether a retained search is in your budget, one consideration is the opportunity cost of not using a retained search firm to make a game-changing hire. Again, one must consider the importance of the importance of the role. How essential is that position to your company’s overall success?

Can You Risk Paying Less if It Might Cost You More?

Opting for something cheaper than retained executive search — such as Container or Retingency search — to fill a senior executive role risks being penny-wise and pound-foolish. A senior executive can make or break a company. A top-performing candidate — the best of the best — holds the potential to produce corporate breakthroughs with exponential return on investment or ROI. If your company doesn’t hire that game-changing executive, then your competition just might, outflanking your company in the marketplace. That is why recruiting is frequently referred to as the War for Talent.

How to Select the Right Type of Search Firm

The type of search firm you select will help determine what your executive search will cost.

• Retained Executive Search is the most expensive, and usually the option for senior executive search.
• Contingency Search Firms are less expensive when compared to retained search firms, yet they rarely tackle important senior executive searches.
• Hybrid Retained-Contingency Firms split the difference and therefore may be better suited for entry-level executive roles, such as Vice President roles.
• Executive Search Research Firms offer companies the opportunity to save with a focus on quality candidates similar to that of retained search. In fact, their research expertise often makes search smarter and more strategic, which leads to better results.

Retained Search Firm Fees

33-38% of first year cash compensation or flat fee.

Retained executive search fees are usually one-third (33%) of the candidate’s first-year total cash compensation, which includes the base salary and projected bonus. Retained firms also pass on direct search-related expenses at cost, such as travel. Some firms charge an additional 10%-15% of their fee for administrative costs that cannot easily be assigned to a specific search. So instead of paying 33%, the engagement can end up costing 38% with administrative costs.

Large Firm Fees Start at $100 Thousand

The fees of large retained executive search firms ( Korn Ferry , Spencer Stuart , Heidrick & Struggles , Russell Reynolds ) usually start at $100-thousand dollars. That is why they often turn away searches for roles with total cash compensation of less than $300 thousand. They need to make fees in the six figures in order to pay for their global overhead.

Boutique Retained Firms More Popular

Boutique search firms have grown in popularity as search has gotten harder. They often offer concierge client service and produce better results. Their smaller sizes enable them to innovate and tailor services to a client’s needs. Due to their reduced overhead, their fees often are lower than the larger firms. Yet many boutique firms have had to raise their rates to offset the higher costs.

Still, increasingly the advantages of boutique firms make them the go-to choice for retained searches. Their smaller size means their off-limits list is smaller. Retained search contracts contain clauses that forbid retained search firms from recruiting from their clients — the larger the firm and the more they specialize in your industry, the larger their off-limits list. Those off-limits lists can cripple a search firm’s ability to recruit from your ideal target companies.

Contingency Search Firm Fees

20-30% of first year salary.

Most contingency search firms charge roughly 20-30% of the candidate’s first-year salary. Because they work on a contingent basis, they only get paid once the search is completed and the candidate is hired. By then they’ve worked hard for the money.

Contingency search firm agreements are rarely exclusive. As a result, they have to scramble to fill openings because they’re competing with the company’s internal recruiting team, job posting applicants, and other contingency firms. To increase their chances of making a placement, contingency search firms usually work on many open positions at once, using their existing database. They have little time to proactively research and recruit ideal passive candidates.

Hybrid “Container” Search Firm Fees

$8 thousand + 20-25% of first year salary.

Hybrid retained – contingency firms typically charge an initial retainer of about $8 thousand. When their candidate is hired, they then charge 20-25% of the first-year base salary of the candidate they placed. “Container” or “Retingency” firms prefer to work on an exclusive basis. Because they’re a little more up-market than contingency firms, they often work on entry-level executive roles such as Senior Director and Vice President level searches that retained search firms do not accept as engagements.

$90 – $150 per Hour

$30 – $50 per name, $30,000 – $40,000 per month.

Executive search research firms do not charge a percentage of a candidate’s compensation. They charge by the name, by the hour, or by the project. The prices may vary from $5 thousand dollars for a smaller research engagement to tens of thousands of dollars for larger engagements. Their deliverable is often a focused list of ideal candidate profiles research for individual executive searches, yet they often can do much more. Some offer extended Recruitment Process Outsourcing (RPO) services, providing research services as needed over, for example, 6 months or a year. Often, in exchange for a longer engagement, the research firm offers a discount.

Note: Our executive search research division, Intellerati , offers executive search research for a flat fee. Intellerati produces spot-on lists of ideal candidates, actionable lists of qualified candidates, diverse talent pools, talent mapping, and online org charts. Its investigative expertise is unmatched in the executive search industry.

A Word About Percentage Fees

In addition to determining what a search firm costs, it is important to consider how a headhunting firm comes up with the fee for an executive search engagement. With percentage fees, the more a candidate is paid, the more a search firm makes. Some contend that is a conflict of interest.

Percentage-based pricing enables search firms to benefit from negotiating higher salaries for the candidates they place than what those executives would have accepted. Clearly, paying more than necessary for candidates is not in the best interest of the client. In other words, while it is common, it isn’t necessary right. We believe it is disqualifying that apparent ethical lapse is a relection of the values of the company.

The Good Search is a retained search firm that charges a simple flat fee based on the amount of work involved. And we are not alone. One of the leading global retained search firms,  Egon Zehnder, also charges a fixed retained search fee.

Our clients want a search firm they can trust. Percentage fees are not based on the amount of work involved. They also set up an inherent conflict of interest. Percentage fees reward any search firm that inflates the compensation of the candidates they place. The more a candidate makes, the more the search firm makes.

Egon Zehnder explains it thusly:

“ Unlike the traditional model of search consulting, we charge a fixed fee for our assignments. That means our only incentive is to deliver what’s best for you. Our fixed-fee policy frees us to be diligent, thorough, and completely unbiased, able to assess internal and external candidates on an equal basis, and facilitate hiring negotiations with no conflict of interest. “

The Good Search Retained Search Fees

Fees start at $85,000.

Our minimum retainer is $85,000. Our average retained search fees range between $85,000 and $150,000. Most of the executive-level positions we work on have total annual cash compensation in excess of $300,000. The Good Search works by fixed retainers for a reason: you should not have to wonder about your search firm’s loyalty. By decoupling our fees from candidate compensation, we eliminate the conflict of interest of percentage-based fees.

Flat-fee retainers not only take the moral high road, but they are also easier on the budget. For every retained search engagement, we draw up a proposal detailing our fee, based on the search’s requirements and difficulty. Clients know exactly what an executive search will cost from the beginning. There are no surprises.

Our retained search firm fees are based on the amount of actual work involved, not on candidate compensation. For details, check our earlier blog post. If you do not have the budget for retained, we recommend executive search research as that looks and acts a lot like retained, but gives you the opportunity to save.

Got Questions? Let’s talk.

No search firm is the right firm for every search every time. Yet we make it a practice to listen to what you’re trying to accomplish and we try to help, regardless.

Types of Recruitment Agency Fee Structures You Can Use

by Top Echelon | Mar 3, 2021 | Owner Issues , Top Echelon Blog

You want to get big recruitment fees, but how do you best charge clients to get the maximum possible fees? You have multiple options for billing your clients. The recruitment agency fee structure you choose depends on the situation and your goals.

Recruitment agency fee structure types

Below are the ways you can structure your recruitment fees. Make sure you read them all to determine which is right for your situation.

Percentage-based fees

Recruiting agencies typically calculate fees based on a percentage of the new hire’s first-year wages.

The following situations commonly use percentage-based fees.

Retainer placements

When you receive a retained search assignment, you take on a type of exclusive search. The client pays you a retainer fee up front to keep your services. This retainer fee is typically a percentage of what the employee’s first-year salary will be.

The client will pay you two or three more times during the search process. The client should pay you when a hire is made. Sometimes, the client makes a third payment when you provide them with a shortlist, or at another significant point in the recruiting process. Each payment is normally a percentage of the first-year salary.

Let’s say you’re filling a position with a first-year salary of $75,000. Your client agrees to your contract that says 5% of the first-year salary is due up front as a retainer, 10% is due when you present a shortlist, and 10% is due when a hire is made. Your client will owe you $3,750 at the beginning, $7,500 when you give the shortlist, and $7,500 when the candidate is hired. In total, the client would owe you 25% of the first-year salary, or $18,750.

The total fee percentage you receive with a retained search assignment is typically greater than the fee percentage you’d receive with a contingency agreement. This is because retained searches often take longer, increasing the total rates.

Contingency placements

Whether you have an exclusive or non-exclusive contingency search agreement, the client doesn’t pay you until someone is hired. No matter how much work you do, you don’t get paid until a placement is made.

With contingency search assignments, the fee is typically a percentage of the employee’s first-year salary.

For example, you agree to a contingent search agreement for a $40,000 position with an 18% fee. Assuming you fill the position, you would earn $7,200 when the candidate is hired.

As mentioned in the retainer section, contingency search fees are typically lower than retained search fees because the search process is normally shorter.

Contract placements

When you do contract staffing , you handle payroll and all employment tasks on behalf of your client. You bill your client for the employee’s wages, plus extra to cover the cost of your services.

To calculate contract bill rates, multiply the employee’s hourly rate by a markup multiplier. For example, an employee earns $15 per hour and your markup multiplier is 1.6.

$15 X 1.6 = $24

In this example, you would bill your client $24 per hour the employee works.

Temp-to-perm fees

If the client wants to hire the contract employee permanently, then the client will owe you a temp-to-perm conversion fee. There are two common scenarios for the conversion fee.

You can do a prorated temp-to-perm fee. You take the percentage of the first-year wages that you would normally earn and prorate the fee based on how long the temporary employee has already worked. For example, you charge 25% of the employee’s first-year wages. But, the employee has worked for two months. You would invoice the client for 10/12ths of the 25% fee to cover the remaining 10 months of the year.

Your other option is to credit the placement fee based on the hours the contract employee has worked so far. For example, you charge the same 25% fee again. But in this scenario, you credit the fee $5 per hour worked under contract.

Beyond percentages

While it’s common to charge clients based on first-year wages, it’s not your only option. There are other recruitment agency fee structures. In some cases, it might be best to use another pricing option.

Flat fees aren’t as common as percentage fees, but they do exist and they do have a place.

Flat fee recruiting isn’t used often because flat fees are typically lower than percentage-based fees. But, taking a lower flat fee can help you negotiate other parts of your recruiting contract.

A flat rate might help you secure multiple job orders with a client. They might be willing to give you more jobs if you give them a reduced price through a flat rate.

You can use the flat fee to negotiate a recruiter exclusivity agreement . For example, you might agree to use a lower flat fee instead of a higher percentage fee if the client agrees not to offer the job order to anyone else. A smaller, guaranteed flat fee is better than getting no fee if you don’t present the winning candidate.

You might also use a flat fee when there’s easy money sitting at your feet. If you know you can easily make a placement in little time, you can offer a flat fee to outbid other recruiters and secure the job.

Rates for a period

You can also charge an hourly, daily, or weekly rate. This is even less common than charging a flat rate. But, by charging a rate for a certain period, you are compensated for the time you spend on an opening. You can bill for consultations, phones screens, follow-ups, sourcing, pre-qualifying, and more.

If you do charge a rate for a certain period, you may consider charging a large rate to make up for the fact that you won’t receive a big payment when the candidate is placed.

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 What is Retained Recruitment?

In the world of recruitment, there are two types of hiring; contingent, whereby a recruiter is only paid once the role has been filled, and retained, where recruiters are engaged on an exclusive basis to source a key hire.

Positions that are recruited on a contingent basis are typically for entry-level to mid-management roles and are often found on job boards, networks and social media posts. For more senior, strategic or highly skilled hires where the candidate pool is much smaller, we have to adapt the way in which we recruit to find the right talent. This is where retained recruitment comes in.

What is retained recruitment and how does it work?  

Retained recruitment is typically undertaken for senior roles, ie. Director level and above. Advertising on job boards, social media or via candidate referral schemes rarely attract or reach the right people. Therefore recruiters need to find alternative ways to identify talented prospects together with the expertise to manage the process of hiring.

Where temporary and permanent roles are recruited, the hiring company might work with multiple recruiters, however, when recruiting on a retained basis, the recruiter has exclusivity on the role and is ‘typically’ paid upon each key milestone.

Normally, the fee will be agreed as a percentage of the target salary and payment is split into 3 stages:

• 30% Upon engaging the recruitment company
• 30% When a shortlist of candidates is provided 
• 40% When a candidate is placed.

Our solution is different! 

At Mattinson Partnership, we do retained search differently. We recognised that a lot of companies were getting charged significant amounts of money for the first two stages,  but not guaranteed the appointment at the end of the process. Recruiters were taking 60% of the fee without producing the results and this did not seem right to us.   Our Executive Search offering is unique in the marketplace, giving our clients a pricing structure that is focused on delivery and offers complete transparency on our efforts at every stage of the process.

Instead of using the normal payment process for retained recruitment, whereby fees are split, we work in only two phases; engagement and delivery.  Upon engagement, we charge a £1,500 retainer, the balance of the fee is only paid on a successful appointment.  

Throughout the process, we provide regular updates on progress, a list of fully screened and briefed candidates and guide both yourself and the candidate every step of the way.   This mitigates a lot of the financial risks and we are focussed exclusively on hiring the right person.  

Why do retained recruitment?

By working with Mattinson Partnership, you work with experts who specialise in your industry with an extensive network of contacts. With years of experience, we understand the need for confidentiality and work incredibly hard to ensure we get the right people on time and to budget.  

From our initial research, we map the market to identify talented prospects which also provides invaluable competitor insights and salary benchmarking. Working exclusively means we have the opportunity to best represent your business without multiple agencies chasing senior prospects. Our retained solution means you get full visibility of potential prospects, whilst working closely with a team of professional recruiters who understand the need for discretion. We pre-interview all shortlisted candidates and provide feedback before any formal stages which saves you a huge amount of time and effort. Having one recruiter to manage the sourcing and screening process ensures you can get on with your day job without having to go through hundreds of profiles or CVs. 

Contact one of our specialist recruitment consultants today to discuss your hiring requirements and how we can source the right talent for you. Alternatively, email us at [email protected] with your details and we will get back to you. 

If you’re looking to take the next step in your career, visit our jobs page for the latest opportunities across engineering, architecture, town planning and ecology. 

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Table of contents, retained search: the ultimate 6-stage guide for agency recruiters.

Attracting the right form of talent isn’t a piece of cake (though it may sound like one), especially when you’re looking forward to hiring for specific niche roles.

With different models of recruitment services available, you might be wondering, what’s the scoop?

Which model do you trust the most?

Now, recruitment agencies have always been there to help companies find suitable candidates and hire for hard-to-fill roles.

However, as a hiring manager, if you’ve got a bunch of niche roles that demand specific skill sets or exceptional expertise, retained search should be your go-to option.

In our previous article, we had simplified contingency recruitment for you. In this article, we will solely discuss and focus on the retained recruitment model (a type of executive search).

What is Retained Executive Search?

Retained recruiting is often named retained executive search and is given to agencies that have been approached by the company directly.

They also work on a contractual basis rather than a transactional one. They are hired especially to fill up senior or executive positions, which is why they get to work very closely with the senior managers and officers of the company.

Most of the senior positions that retained search firms hire for are highly confidential and discreet.

This is not something that a company’s in-house team can be assigned with. Therefore, the need of retained and executive search firms.

Now take a look at this example– imagine a company wants to hire for the role of a CTO and is looking for a candidate who has graduated from Harvard.

It’s impossible for in-house recruiters and contingency search firms to look out for such niche candidates on LinkedIn, Glassdoor or Monster. This is where executive search firms or retained search firms enter.

Most of these candidates whom they target are passive and are not looking for a new job.

How Do Retained Executive Search Firms Work?

• In this model, your client will negotiate the fees with you firsthand and pay you a portion of it up-front and not after the whole process of recruiting is over.
• Your agency should usually charge about 25% of the starting salary of the position they are recruiting for and might later include more bonuses and commissions that need to be fulfilled by their client if they agree to it. Sometimes the amount is also paid in 3 stages— 30% on signing the contract, 30% when an offer is made, and the remaining 40% when the candidate joins.
• Since this search is mostly conducted in executive firms, the companies that will be outsourcing will ask you to look for candidates to fill up positions for very senior roles, such as CEO, vice presidents, executives or sometimes even board members.

6 Stages You Need to Know About Retained Search

1. the firm works harder to find the best talent.

As a retained recruitment agency, your primary focus should always prioritise quality over quantity.

Don’t rush into the process.

It is crucial to have a pre-determined pace that both you and your client agree upon to scan and shortlist candidates as fast as you can without racing.

The firm works harder towards finding the best possible candidate, regardless if he/she is actively looking for a new job. Since the search is more personalised and consultative, they are paid over the course of engagement and not on placements.

Did you know?

The market size of the executive search industry has increased considerably between 2012 and 2020. Last year alone, the global executive search industry was estimated to be worth 18 billion euros, eight billion euros more than in 2012!

2. More Secure & Discreet

It is a much more secure form of recruitment for the agency because their fees are not dependent on a limited or contingent time period.

Companies also know that if they hire a consultant from a retained recruitment agency, then they can have someone who’s entirely focused and not worry about other competitors in the same business as them.

In these cases, a partnership occurs between the agency and the client before the recruiter begins to scan and shortlist candidates using an Applicant Tracking System (ATS).

Since agencies based on this model don’t engage with multiple clients at once, it also helps them build a sense of mutual trust and a stronger connection for any future business deals or contractual agreements.

Pro Tip: Recruit CRM helps recruiters balance and maintain proper candidate and client relationships, sort candidate databases, helps in sourcing candidates , invoice management, advanced search, innumerable integrations and so on. You can sign up for a free trial to check it out for your retained recruiting agency.

3. The Search Fee is More

When you are a recruitment consultant, it’s a part of your job to shortlist the fittest candidate and give your client the best service possible, which is why thorough screening and scanning must be done.

Thus, the retained search fee is slightly more than the contingency search. Moreover, dedicated engagement with any retained search firm is an investment from the client’s end.

When clients are guaranteed the best candidates and exclusivity, it might result in a long-term partnership.

4. The Concept of ‘Uptick’

Uptick is something that retained searchers should inform their clients about.

It’s an idea that the hired search firms will try to find the most expensive candidates for a bigger payout.

We have already mentioned earlier that any retained search firm accepts payments incrementally. The retainer that you’re typically collecting from your clients initially is a basic fee.

The final payments depend upon several factors, such as the project, the placement, and the first-year cash compensation that the executive will receive.

While this is variable, it’s certainly less than the lump sum that clients pay for contingency recruitment.

In short, clients benefit from executive retained searches because they put their efforts towards finding the best candidates and not expensive ones. If you find a client concerned about ‘uptick’, show them the retainer way.

Read more: What is Retained Search? Check out its three major advantages .

5. A Personalised Approach

Unlike contingent search assignments, where one recruiter deals with many candidates at a given time and is often only focused on filling up the vacancies as soon as possible, the retained recruitment model helps build a stronger and more personal relationship with the candidate.

It results in the recruiter actively conducting meetings and spending time with the candidate while getting to know them through one-on-one interactions.

Although the whole process can be very tiresome and can take a long time to complete, it is essential to point out that great things take time, so either you wait or settle for less.

6. Understand the Hiring Stages

Before all of the above comes to reality, you’ve got to understand the various hiring stages and the first of the lot being— finding work.

First, you have to find clients to work for. No matter how amazing your candidate database is, you’ll run out of business pretty soon if you don’t have a proper outreach strategy in place.

The next stage is winning the work once you find it, research extensively and gauge a candidate’s ability properly.

Finally, once you’ve searched effectively, you enter the decision-making phase, where you’ll have to conduct face-to-face interviews during which the clients will decide whom to hire.

Once the offer has been made, it’s time to close the search, evaluate how the search went and make sure your clients and candidates are happy. Again, validating relationships at this stage is crucial.

No doubt, retained search is expensive. It does not just require higher skills but also great coordination.

Reach out to us to find out more about retained recruiting, its benefits and how you can use Recruit CRM to make the most out of your executive recruiting journey!

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What is Retained Search?

Contingency vs. retained recruitment, which is better.

In nearly every conversation we’ve had recently with executives across industries, we keep hearing that great people are harder to find and it’s increasingly difficult to convince them to make a move.

Many companies realise they would benefit from the knowhow, experience and connections of an Executive Search firm, but often have misconceptions about the way we work.

When talking with a prospective client, we are often asked whether we would consider a contingency search model without exclusivity. Sometimes it is because a client has not experienced retained search before and on the surface the main difference appears to be simply an issue of how the fee is paid.

But that difference drives a completely different approach to assignments and it often necessitates an explanation.

While we believe there are merits of both, a clear understanding of the differences is critical to making the right decision for a specific search.

• Non-Exclusive Success based fee /Contingency Search: the provider is paid only after filling the role and in addition to that, other recruitment companies and internal recruiters may work on the same assignment.
• Exclusive Retained Search: the client engages only one search firm and the fee is paid typically in three instalments. The first, when the search is assigned, the second when a defined milestone is met and the remainder when the chosen candidate accepts the role.

At first consideration, the non-exclusive contingency model may seem better for the client - there is no perceived risk because there is no upfront payment and engaging more firms casts a wider net to elicit faster and better results? This thinking, while common, actually works against the clients’ interests, it will seldom ensure access to the best talent and can create damage in many ways.

It is important to realise that the contingency model makes the provider to work with a large number of positions at the same time and to focus on the roles that are most likely to be filled quickly. Though high speed can be a good thing, quality and service will be compromised and the client will get CVs of the most easy to reach candidates who are currently available, yet not always the best for the role. A contingent search means that when the recruiters get bored, frustrated or tired, they can quit, there is no commitment from any side.

While contingency firms would ideally like to create a positive candidate experience, the focus will be on the transaction - just getting a number of suitable resumes in the door first. But because the best candidates are generally passive, busy, usually just casually looking at online opportunities (if at all), they will seldom respond and apply, except those actively searching for a job and that is only about 5% of all potentials.

To get the attention of passive candidates, a search requires careful engagement strategies and personalised presentation of the company and opportunity, therefore many great candidates will be missed because the contingency search is under pressure to present candidates quickly. These are the experiences that often give the recruitment professionals a poor reputation and the unfortunate negative perception among candidates.

One big recruitment myth is that recruiters will work harder when they have to compete with other search firms. That never guarantees success, it actually creates chaos in communication among all parties, high activity at the beginning of the assignment and a rush to make a referral before anyone else.

There is lack of research, assessment, commitment and guarantees from the non-exclusive contingent search.

If exclusivity for one firm is not agreed, candidates will be approached by several recruiters for the same position. This may completely put off many passive candidates because it is perceived negatively, it diminishes the importance of the position and candidates may be concerned about confidentiality.

What works best for attracting the senior candidates is a committed partnership where there is an accountability to find the right fit – something that definitely benefits the client.

In today’s candidate-driven market, it is extremely important to tune into what candidates are looking for in their next roles. Lockdowns gave people time to reflect, they look for purpose, work-life balance and are extremely careful about confidentiality.

The candidate experience should be a priority for a retained firm.

The assurance of importance, exclusivity and confidentiality will elevate the client brand and can persuade candidates to open up and consider opportunities at times they would not be actively looking. Most experienced leaders recognise that executive search professionals  can be very valuable advisors and are honest and open with them in ways they can not be directly with an employer. This is also helpful in managing future career expectations, negotiating salary and contract terms.

If you want to ensure you get the very best talent, and not just an immediately available hire for the key positions, exclusive retained search is the best choice.

Retained search is better for everyone involved: the client, the candidate, as well as the search firm.

Andrea Chládková Partner, Prague

We support our clients wherever they do business

Want to know more, we talk with our clients, external board assessments.

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Why Choose Advocate Staffing?

Fee Structure

We offer a variety of search options. Should one of these not be suitable for your particular needs, please contact us so we can work with you to achieve a solution that’s right for your organization.

Search Fee Options:

Retained Retained executive search is recommended for your most important, most committed, confidential or difficult recruiting efforts. The retained recruiting relationship brings your organization and our firm into an exclusive partnership in a critical executive recruiting assignment. Retained search, sometimes referred to as “retainer search” is an exclusive working relationship involving a contract and payment of fees at regular intervals during the course of the search project. Retained search is a contract for services and the highest level of mutual commitment to a successful search result.

Fees: Requires 1/3 start-up fee (based on candidate’s first-year compensation) to initiate the recruitment process. Upon presentation of a ‘short list’ of qualified candidates, the client agrees to pay an additional 1/3 fee. When a placement is made, the client pays the final 1/3 fee within 10 days from the candidate’s start date.  The service charge is 25% – 27% of the first year’s compensation.

Engaged Search Engaged Search is a logical and attractive combination of both contingency and retained fee structures. This working relationship is strongly recommended when you prefer a contractually committed and fully engaged search relationship, but you do not want to commit to a fully retained search fee structure.

Fees: The client pays an engagement fee of $5,000 prior to the start of a search. The balance of the fee becomes due after the candidate begins employment. The service charge is 28% – 30% of the candidate’s first year’s compensation.

Contingency No fees are due until you hire our candidate. If you prefer a risk-free search relationship and your search does not involve confidentiality, sensitivity, a high degree of complexity or the exclusive focus of a search firm, the contingency fee structure may be your preference. While there are obvious advantages and disadvantages to the contingency fee approach, it is the best option for you if you do not require or expect a single search firm to land the result on your behalf. Especially suited for filling mid-level positions or roles having a base salary less than $80,000, contingency search provides you with a flexible, low risk/low commitment approach to utilizing us as your recruiting partner. As your contingent search partner, we are certainly committed to providing you with exceptional service and to successfully completing the recruiting assignment.

Fees: Client agrees to pay the total invoice upon placement. The service charge is 30%-33% of the candidate’s first year’s compensation.

Other Expenses

We do pass on “at cost” the following expenses: Candidate’s travel to interview at client, client requested job advertising, background check, degree verification, drug tests, etc.

We do not charge “administrative fees” to cover phone charges, printing, typing, copying, faxing, etc. We view these as normal and customary parts of the service we provide.