In the realm of executive recruitment, headhunters work on a retained or contingency basis. Generally, retained executive search offers several benefits over contingent search. Here’s why and what you need to know about contingent versus retained executive search.
Retained refers to the “retainer” paid upfront by the client to start the search for qualified executive candidates. Typically, the retainer is half or 1/3rd of the total fee. The rest is paid when the work is finished, which is similar to other professional services, including services from lawyers, accountants, and consultants. Contingent means the fee is paid only if the search firm finds someone.
Now, if you compare that to any other professional service, you know any reputable firm won’t work for free until the work is done. Would you want your CPA firm or lawyer working on your behalf, hoping they get paid in the end? No, of course not, because that brings up quality assurance concerns. Search firms are no different. Make sure you do your due diligence when selecting a search partner, verify whether they have expertise in your field and always check references. The search firm you choose is your company’s brand ambassador.
Retained executive search consulting firms operate on an exclusive, client-centered basis and work on a limited number of assignments at one time. Executive search firms often find candidates with diverse backgrounds and have access to candidates who are not actively seeking a new position. They are engaged in all aspects of the process, from defining the search through candidate integration. They charge a consulting fee (retainer) for the assignment, consistent with their in-depth advisory work. Executive search consultants deliver high-quality service, a slate of highly qualified candidates, and develop long-term relationships built on trust.
Contingent recruiters seek to place as many candidates as possible in the shortest possible time. They tend to work with many assignments concurrently. If a particular assignment is not getting traction, contingency recruiters have little incentive to continue. Contingent recruiters offer their service with no money upfront, and they get paid for candidates who are hired from resumes they present. Fees are generally lower, reflecting their limited scope of work. Contingent recruiters deliver broad access to “ready to move candidates” and a quick presentation of a large number of resumes.
While some human resource managers believe that both models are the same, they clearly are not. Some clients try to negotiate the lower fees of the contingent recruiters but desire the full complete and thorough search service of the executive search (retained) firms. At the same time, they show no loyalty by trying to do these same types of deals with multiple search firms all at the same time. This is a recipe for disaster and clients like this are avoided like the plague.
It is important to understand that investing in human capital is important thus organizations should employ best practices. An executive search consultant (retained search consultant) invests time and resources in understanding their client’s industry and individual needs. In comparison, contingency recruiters focus on pulling as many resumes out of their databases as they can as fast as they can.
Executive search consultants use competency-based interviewing practices and advanced assessment tools in the identification of talent which best matches the business culture and needs of the client’s position. Multiple interviews with candidates over time and various technologies such as telephone, video conference, and face-to-face whenever possible are standard operational procedures. Also, pure search methods seeking the best talent, even those who are not in anyone’s database is routine and required to find the best talent. This is in direct contrast to the contingent recruiters who rely more on supplying resumes from their database as quickly as possible. Too often it is a matter of quality versus speed.
In contrast, contingent recruiters do not have the time to—and rarely do they—interview candidates multiple times to assess their capabilities or do any type of formal assessments. They are all about database searches and getting resumes into the hands of the hiring manager ASAP.
In conclusion, for best practices and the most effective executive search service, the retained search model for middle to senior-level positions is the choice of champions.
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Reaching out to a retained executive search firm often plays a key role in answering this question. Executive search firms are talent acquisition specialists who invest their entire careers focused on helping their clients identify, attract, and hire the most qualified individuals for their unique organizational needs.
At Cowen Partners, our HR executive recruiters are exceptionally skilled at delivering in-demand candidates, no matter the need and across all industries. Backed by a proven executive recruiting process, we have been the partner of choice for startups, corporations, small businesses, non-profits, and more, meeting unique and critical recruitment needs across the entire C-suite, including CEOs, CFOs, COOs, CMOs, CIOs, CTOs, CHROs, VPs of sales, other VPs, directors, and several other leadership roles.
With our executive recruiters, you get senior partner-led searches, due diligence-run networking, meticulous candidate vetting, and so much more, all geared towards one goal — placing the very best talent as soon as possible, all while ensuring a seamless fit with your company culture, your big-picture objectives, and other factors. Plus, we have one of the highest candidate retention rates in the industry while consistently delivering world-class talent faster than the competition.
That’s how Cowen Partners has become a leading executive search firm nationwide, and it’s why our executive recruiters have a reputation for excellence and success.
We also invite you to continue exploring more executive recruiting insights from our team: