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Retained Search vs Contingency Plan?  

How retained search benefits our clients 

The recruitment industry is broad and competitive enough that companies have developed varying approaches to their work, including the way we’re compensated for the services we provide. In this respect, recruitment companies generally work on either a retained basis or on contingency. We’d like to share with you the approach we take, and more importantly, how it benefits our clients. 

 

First, some definitions. Under a contingency fee agreement, a recruitment company is paid only when a client company hires a candidate presented by that company. A retainer agreement, on the other hand, means that installments of the fee are paid to the 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 installment when the candidate is successfully hired. 

 

From a client’s perspective, 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 have to pay if you hire, you can have several companies all 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 very good reasons for this kind of commitment. 

 

First, let’s look at the question of exclusivity. While it might seem to be a good thing to have multiple recruitment companies competing to ‘win’ the same search, the reverse is actually 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 we work with a company on a retained basis, it gives us the ability to fully map the marketplace, identifying and vetting all prospective candidates to ensure we leave no stone unturned. In short, our clients benefit from a more thorough search when working exclusively with us, than companies who work with multiple companies. 

 

A retained search supports our clients’ employer brand in other ways, too. When we approach candidates on behalf of our client and tell them we’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 the hiring company is taking seriously. In contrast, when candidates are contacted numerous times by different recruiters for the same position, it frustrates them, and harms the hiring company’s employer brand. They risk appearing desperate, working with anyone and everyone who might help fill the position. 

 

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. Our clients understand that we 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 we’re able to present candidates who wouldn’t have been interested if approached in a different manner. 

 

As candidates move through the interview process, we devote a great deal of time to keeping the lines of communication open. When our clients select a finalist that they want to hire, they trust us to ensure that we’ve covered all the bases – checking and rechecking for interest, speaking openly with the candidate about potential counter-offers, and more – so that when an offer is made, our client’s chosen candidate is ready to accept. When recruitment becomes a race to the finish line, these things don’t always happen. Companies working on a contingency basis simply don’t have time to devote to a search when it’s possible – even likely – that it won’t result in compensation. 

 

We don’t want our clients to be caught up in that race when they are looking for the best talent. Recruitment – done right and done well – takes commitment. Our clients commit to us because they know we commit fully to them. Want to know more? Get in touch and let’s talk. 

 

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