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Retained Executive Search vs. Contingency Recruiting: Which One is Better?

Can you hire talented performers yourself?  Aren’t they all on the Internet? When should you a professional recruiter — and which kind?

This series of articles will help you choose.

PART 1 OF 4 – MAKING THE DECISION

When companies seek to hire management and professional talent from outside their organization, they have three options. They can decide to manage the process themselves, using advertising, the Internet, and/or a contracted researcher to identify potential candidates; they can engage contingency recruiters; or they can use a retained executive search consultant.

First Choice:  Internal or External Resource

Doing your own hiring means you or a human-resources executive makes an effort to find qualified applicants, typically by advertising the position in the print media or on the Internet. Then you have to screen responses, interview candidates and select the person to be hired.

 The advantage here is that the company retains full control of the process.

There are several disadvantages:

• many qualified candidates (including some of those most qualified) may not see or respond to an ad or post their resumes on the Internet;
• you will only find those actively looking and not possible candidates currently working who might be interested;
• in order to discover those who are qualified you are going to have to review a great many who are not;
• once qualified candidates have been identified, you face complex, time-consuming and sensitive issues of negotiation and reference-checking—without the benefit of a third-party professional.

As a result, many organizations prefer to use independent recruiters.  But how do they decide whether to use a contingency recruiter or a retained executive search consultant?

Next: Contingency or Retained

On the surface, it appears to be simply an issue of how the recruiter gets paid. A contingency recruiter earns a fee only when the organization hires someone. A retained search consultant, on the other hand, is paid in advance to conduct a search that usually results in a hiring—but not always.

But that difference, when you think about it, dictates two completely different methods of searching for the person you need — and usually ends in two quite different result scenarios

The retained search firm is being paid to conduct the search.  They therefore undertake a much more exhaustive process.  The contingency search firm is paid only when someone gets hired.  Their search process is skewed to producing results rapidly since the more time spent the less profitable the mandate.

Contingency recruiters typically work with a large number of job openings, and, using a

database of known candidates, look for matches on paper and send those candidates’ resumes—as many as possible—to clients for possible interviews.

The retained search recruiter on the other hand maintains exhaustive databases of candidates, cultivates contact in sectors in which they work frequently so they know who might be restless, and pre-selects the candidates carefully using advanced assessments for suitability and job fit.  You only see the finalists.

ABOUT

This four-part series first appeared on the Cornerstone Kansas City website and includes material originated by The Association of Executive Search Consultants.

The AESC is the professional association representing retained executive search consulting firms worldwide bound by a Code of Ethics and Professional Practice Guidelines.

NEXT: WHEN TO USE WHICH SEARCH METHOD