The executive search industry experienced a meteoric rise in 2021, with an 18 million dollar increase from 2012, reaching a valuation of 1.4 USD. With the increased demand for such firms, service providers now offer specialized services, such as retained and contingent facilities.
Retained executive search firms differ from their contingent counterparts as they offer a higher caliber of services, strategies, and resources for managing a successful recruitment project.
In this guide, it is explored precisely how these two models distinguish themselves from each other. Consequently, businesses can make an informed decision as they consider bringing outside help with their next hire.
Table of Contents
Approach
Executive search firms offer invaluable services to those in need of a qualified individual to fill a role within their organization. They take on the responsibility of actively seeking and assessing the best possible candidates for any given job, saving organizations time and money during their recruitment process.
Contingent recruiting agencies, however, take on a different approach. Rather than doing the assessment themselves, they leave it up to their clients and allow them to decide who should fill the job opening. Conversely, retained executive search work with the client to build solid criteria for the profile.
Fees
Retained executive search firms require an upfront cost, as fees will typically be paid in three cycles – when the contract is signed, milestones are met, and upon successful completion. The scope of work included in a retained search agreement means that costs are usually higher than those associated with contingent search firms.
Conversely, contingent search allows flexibility through its limited upfront costs: no fees are paid until a successful hire has been made.
Business Model
Retained executive search firms provide a comprehensive approach to the recruitment process, opting to take on a limited number of assignments to give each client the full range of services and attention.
Their process is extremely thorough, as they seek the best candidate for the role. Such firms look beyond job boards and advertising. Instead, they contact qualified professionals who may not actively be looking for a new role. As a result, they can find the best candidate for the position. There is typically an initial consulting fee or retainer charged at the start of the relationship.
However, contingent recruiting agencies work efficiently and quickly to fill an open role. Since they usually handle many assignments simultaneously, they are paid based on the number of candidates provided. The focus is on completing many desirable searches in a shorter time, thus keeping waiting periods short and clients happy.
Target Positions
Target positions can be filled through either contingent recruiters or executive search firms. Contingent search firms are usually best suited for entry- and mid-level positions, ensuring that employees with the right qualifications can be quickly brought onto teams.
Alternatively, the top retained executive search firms are best for senior-level positions and managerial roles, such as director, CEO, and COO, who require much more extensive vetting than ordinary hires.
Timeframe
The timing of a retained search process for an executive in finance can vary, but it typically takes 8-12 weeks to find, vet, and hire the right candidate. Contingent searches move faster as the level of involvement is lesser. Once the promising candidates are discovered and references checked, the recruiter’s job is done. The information provided to the candidates is delivered to the clients, who schedule interviews with the candidates.
On the contrary, the best retained executive search firms take the time to manage each step of the search process. These agencies also provide clients with industry insights, along with other information, to ensure the best decisions are made for the company.
Relationship
Retained search firms are interested in building deep relationships with clients and candidates. These agencies network with qualified professionals within the industry, allowing them to build contacts for future references. Moreover, retained agencies work to establish a reputation within the industry, focusing on finding the most qualified individuals for the organization.
On the other hand, contingent recruitment firms operate on a transactional basis. They quickly find the right candidate as efficiently as possible.
Wrapping Up
With a more in-depth understanding of the difference between retained and contingent executive search firms, organizations can make a more informed decision on which type of firm is right for them and their needs.
It is crucial to keep in mind that there are pros and cons to each option, so it’s vital for companies to carefully consider all factors before making a decision.
Ultimately, the goal is to choose the firm that will help find the best possible candidates for the open positions.
