Retained Search vs. Contingency Recruiting: What's the best?

March 4, 2022 ROARK

In today's highly competitive environment. It's more important than ever to find great professionals, but what's the right way to do it. Let’s talk about retained search versus contingency recruiting, and what's the best way to go.

Differences between Retained Search and Contingency Recruiting

Retained Search

If we look at the Retained model, the first thing we’ll focus on is going to be the client relationship. They're going to ask for an exclusive relationship to be able to work with the company and have that position to fill.

The client experience is going to be very consultative. As far as the position, the department what's out there and what's going on in the industry.

And the firm focus is going to be on quality. They're going to be focused on getting the job done right. They're going to present fewer better qualified professionals.

And the commitment level is going to be very high because they signed a contract to fill this position for you.

Pricing is going to be anywhere from 35 to 50% of total compensation is what we see in the market.

And the fees are typically earned like a third whenever you sign the agreement. A third when they do their first presentations. And a third when the person starts or signs an offer letter.

As far as a guarantee with a retained search firm is typically going to be a year. That's going to be more appropriate for the executive and high-level management positions.

A good example of using a retained search firm is if you're Coca-Cola and looking to hire your CFO or a Fortune 500 CFO, or if you're looking for a VP of finance or marketing. They tend to focus more across different functions within an organization.

Comparing Retained Search vs Contingency Recruiting

Contingency Recruiting or Placement

Those relationships are typically non-exclusive so you can hire more than one firm, even though we don't recommend it.

The client experience is going to be more focused on the job description, as opposed to being consultative. Think about it as “What do you want?” as opposed to looking at different aspects of it.

The presentation of candidates - you're going to typically find more candidates but typically they're going to be less qualified, but they will be quicker.

Your commitment level in a contingency-based arrangement: there is no commitment level. It's contingency. They could walk away at any time. If the search gets hard or if they're looking for a placement, it's getting hard. They can say, “Hey, okay, I'm not going to really work on this anymore.”

Their pricing is typically 20 to 25 percent of salary or base compensation. Their fees are usually not earned until the start date whenever they place the person.

Guarantees are very different in the fact that that's a 90-day guarantee. And that might not be long enough. I mean, that works great for clerical roles. But if you're looking at management or executive-level positions, 90 days, typically isn't long enough of an evaluation period.

To give an example of when to use contingency firms is going to be like, if you're looking for your Accounts Receivable or Accounts Payable or Payroll specialists, maybe a staff accountant. These positions are more homogenous and there isn't really specialized skills or experiences. Also when you just need someone fast.

ROARK Executive Search Model: Best of Both

But what if you could have the best of both worlds? That's really what we look at for the ROARK executive search model.

From a client relationship, we do ask for exclusivity that way we can take the time to do the job right.

Your experience will be very consultative about compensation and what's going on in the market, how you should structure your department for current and for the future.

And we're going to focus on quality. We want to get the job done the first time right. You'll start seeing fewer better qualified professionals.

Our commitment level is very high. We are not going to stop until the job is done.

Our pricing is in between your retained and your contingency. And then the fees are due at start date.

Our guarantees are six months to a year just depending on the program that you go with.

A great example of when to use the ROARK executive search model is when you don't need that fortune 500 CFO VP of Finance, but maybe like a good Private Equity CFO, or maybe potentially a Controller for a privately held company.

That's a management and very important position for that organization. Another great example would be a Senior Cost Accountant when it has specialized skills that are hard to find, and you need that advice to be able to get that great position.

 ROARK Executive Search Model - Best of Retained Search and Contingeny Recruiting

At ROARK, we wish you the best in winning the war for talent and the greatest for your organization.

If you need help finding great finance and accounting professionals for your organization, schedule a consultation.


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