4 Reasons to Retain a Recruiter
When it comes to using a recruiter there are two ways in which a recruiter’s fee can be paid. This is on a contingent or a retained basis. A contingent search can be exclusive to one recruiter, but can also be open to several. The recruiter who provides the candidate who is placed usually receives a negotiated percentage of the agreed salary as a fee. A retained search, due to its’ nature, is almost always exclusive as a percentage of the fee is paid upfront to the recruiter in order to commence the search.
On the surface the benefits of a contingent search may well appeal. An employer only needs to pay the fee once a placement has been made and the cost of a contingent search can often be cheaper, but what can often seem like a benefit on the surface may not necessarily be the case. Here are four reasons why it is better to work with recruiter on a retained basis as opposed to on a contingent one.
A thorough process
If an assignment is retained it is going to be a much more through process. You have a partnership with the recruiter and therefore they will take the time to get to know your business, the reasons for the hire and the criteria that the successful candidate requires in great depth.
How much time will be committed to a contingent search will depend on whether or not the assignment is exclusive, but usually it will only involve a search for active candidates within the market place i.e. professionals who are actively seeking a new opportunity. It isn’t always the case, but generally speaking the most talented and suitable candidates will not be actively looking (a passive candidate) as they will be valued by their current employer and will be being looked after appropriately. As part of a much more thorough retained approach suitable passive candidates will also be explored and proactively approached as part of the process.
Imagine if you went for a job interview and you were offered the position but were told that it wasn’t a 100% guaranteed that they would pay you no matter how hard you worked. It is likely is that you would turn down the offer and take on a job that you were definitely going to get paid for on completion. As part of a non-exclusive contingent search this is effectively what you are asking a recruiter to do. An exclusive retained search will motivate a recruiter much more to carry out an in-depth search and explore all possibilities in order to receive the rest of their fee and to prove their abilities in order to establish a more long term, mutual relationship.
Spreading the costs
Although a fee needs to be paid upfront for retained assignments there is the benefit of being able to spread the costs throughout the process. At Newman Stewart a fee is paid to commence the search and then the remainder is split between the acceptance of the short list and an acceptance of the offer by the chosen candidate. As a thorough search and recruitment process for senior level and technical positions can often be lengthy this will often give you several months in which to spread the payments.
For a contingent search it is likely that the only information you will receive on a candidate is their CV as a recruiter will do little more than find a candidate who is actively looking within the marketplace. As a retained assignment is a much more in-depth process you will not only receive the CV, but a report summarising the pros and cons of each candidate and additional information on the outlook of the market as the whole such as salary bench marking, skills shortages and talent migration etc…
Contingent search does have a purpose. It may be more than sufficient for low to medium level positions where there are plenty of suitably skilled candidates actively looking in the market place, but for more senior, technical and hard-to-fill roles working with a recruiter on a retained basis will ultimately pay dividends.