The mining recruitment industry is broad and competitive which offers a wide array of services and pricing models for customers. But it can be a challenge to work out which option is best for your needs. In this article, we work through the ins and outs of retained versus contingency recruitment, so you can better understand your options.
First, some definitions. Under a contingency fee agreement, a recruitment company is paid only when you hire a candidate presented by them.
A retainer agreement, on the other hand, means that you pay the fee in instalments to the recruitment company while the search is underway. Typically, a portion of it to begin the search, another when a predetermined milestone is reached, and the final instalment when the candidate is successfully hired.
Does competition get the results you need?
From your perspective as a client, a contingency agreement may seem more appealing on the surface, since there’s no commitment unless the recruiter delivers the hire. It may seem as if you’re casting a wider net: since you only pay if you hire, you can have several companies working for you at the same time.
Competition would make them try harder, you may think. And you can even keep sourcing directly as well. If you find a hireable candidate before the companies do, you don’t have to pay anyone.
Why, then, would you commit to using one company, and agree to pay towards a hire you haven’t yet made?
We’re biased, since most of our work is conducted on a retained basis, but there are four very good reasons for this kind of commitment.
1. Exclusivity is more thorough
First, let’s look at the question of exclusivity. While it might feel right to have multiple recruitment companies competing to ‘win’ the same search, the reverse is true—particularly in the relatively small and well-networked energy and mining sector.
For any given search, the supply of real candidates—candidates that are truly qualified, a good fit for our client, and at a point where they may consider the change —is finite.
When you choose a recruitment firm on a retained basis, it gives them the ability to fully map the marketplace, and identify and vet all prospective candidates to ensure they leave no stone unturned.
In short, you benefit from a more thorough search when you work exclusively with one company.
2. Partnerships are more productive
A retained search supports your employer brand in other ways, too. In this arrangement, when a recruiter approaches candidates on behalf of you and tells them they’re working on a retained basis, it starts a different kind of conversation.
The candidate understands that the relationship is a partnership, and the position is one that your company is taking seriously.
In contrast, when candidates are contacted numerous times by different recruiters for the same position, it frustrates them, and harms your company’s employer brand. They risk appearing desperate, working with anyone and everyone who might help fill the position.
3. Access to passive talent
For prospective candidates who are employed—candidates who would make the move for matters of choice, rather than necessity—the decision to consider a change is a significant one.
In a retained search arrangement, recruiters can take the time required to nurture these candidates’ interest, instead of pressuring them to make a hasty decision. Because of this, in many cases you receive candidates who wouldn’t have been interested if they had approached in a different manner.
It’s the ideal choice for jobs that are:
- In a remote location
- Require a specialised skill set
- Time sensitive
- Senior management roles
4. Open lines of communication
As candidates move through the interview process in a retained process, recruiters can devote more time to keeping the lines of communication open. When you select a finalist that you want to hire, you trust the recruiter to ensure that they’ve covered all the bases—checking and rechecking for interest, speaking openly with the candidate about potential counteroffers, and more—so that when an offer is made, your chosen candidate is ready to accept.
When recruitment becomes a race to the finish line with a contingent process, these things don’t always happen. If your recruiter is working on a contingent basis, they simply don’t have time to devote to a search when it’s possible—even likely—that it won’t result in compensation.
Do it right, do it well
In our experience it’s better not to be caught up in a contingency arrangement when you’re looking for the best talent. Recruitment—done right and done well—takes commitment. Your candidates will commit to you because they know you’re committed fully to them.