Contingent vs Retained Search: which one is best for you?
Finding the right talent is crucial for the success and growth of any organization because its success lies within its people. It isn’t just about their products, services, or financial prowess. It’s the individuals who dedicate their skills, passion, and time to drive the company forward.
Recruitment experts play a pivotal role in this process, acting as intermediaries between companies and potential candidates. They offer expertise, resources, and a streamlined approach that can greatly assist companies in their staffing efforts.
In this blog, you will learn about the following:
- The difference between Contingency Recruitment and Executive Search
- Their own pros and cons
- Some guiding factors to help you make the right choice for your organization’s staffing needs
What is Contingent Search?
Contingent search is a recruitment model where a recruiter or search firm is only paid if they successfully place a candidate in the role. This approach is typically used for mid-level to lower-level positions and is often non-exclusive, meaning multiple agencies may compete to fill the same vacancy. Because payment is contingent on success, these searches are usually conducted at a faster pace, with a focus on presenting a high volume of qualified candidates quickly. It’s a good option for companies looking to fill roles rapidly or when the position is relatively straightforward to recruit for.
What is Retained Search?
Retained search, on the other hand, is a more strategic, exclusive recruitment partnership used primarily for senior, executive, or highly specialized roles. In this model, the hiring company pays an upfront fee to engage a recruiter or search firm, who then commits significant time and resources to conduct an in-depth, targeted search. Because of the exclusivity and deeper level of engagement, retained searches typically involve more comprehensive candidate assessments, market mapping, and a consultative relationship between the recruiter and client. This approach is ideal when hiring top-tier talent where discretion, quality, and alignment are critical.
The difference between the two
When it comes to recruitment, the approach can vary significantly. Although these two types share the same goal of putting the right people to your company, they still vary at some point.
It is important to know how they are different from each other before making any decision. Here are three key differences between contingency and retained search:
1. Payment Structure
In contingency recruitment, agencies are paid only when a candidate they’ve referred is hired. Retained search involves an upfront fee regardless of the outcome, ensuring dedicated attention to the search.
2. Level of Exclusivity
Contingency recruitment often involves multiple agencies simultaneously searching for candidates, while retained search typically offers exclusive focus and commitment from a single agency.
3. Engagement Level
Retained executive search fosters a deeper engagement between the agency and the company, leading to a more thorough understanding of the company’s culture and specific needs. Contingency recruitment might have a faster turnaround but with less involvement.
4. Candidate Screening and Quality
Contingency Recruitment conducts less comprehensive candidate screening, aiming to swiftly present candidates who meet basic requirements. The focus is often on quantity over quality – means it aims to hire the best employees. Retained search emphasizes candidate quality, and usually involves recruiters investing considerable time in thorough vetting. This process ensures alignment with required skills, company culture and long-term goals, resulting in a smaller yet highly promising candidate pool.
Contingency and Retained Search: The Pros and Cons
Each method carries its own set of advantages and disadvantages, offering unique solutions for staffing needs. We have listed the pros and cons of both contingency and retained search, providing valuable insights to help you navigate the recruitment landscape effectively.
| Contingency Recruitment | |
|---|---|
| Pros | Cons |
| Quick results due to multiple agencies searching | Limited commitment from agencies |
| Payment only upon successful placement | May attract less experienced recruiters |
| Suited for roles with a larger candidate pool | Focus on quantity over quality might lead to less tailored matches |
| Retained Search | |
|---|---|
| Pros | Cons |
| Exclusive dedication to the search | Longer process due to rigorous screening |
| In-depth understanding of company needs | Potentially higher costs for smaller companies |
| Greater emphasis on candidate quality | Upfront fee, regardless of hire |
Important Factors to Consider When Choosing the right Type of Recruitment
Selecting the most suitable recruitment approach is an important decision that can significantly impact your company’s growth and success.
Managers and business owners need to understand which method aligns best with their organization’s goals and requirements. Below are 5 important factors you should know to guide your choice, ensuring that you make an informed decision tailored to your company’s unique needs.
Urgency
Contingency Recruitment for Urgent Hires: When you need to fill a position quickly, contingency recruitment can be advantageous. Multiple agencies simultaneously searching for candidates can expedite the process.
Retained search for Crucial, Strategic Roles: For roles that hold strategic importance within your company, a retained approach ensures dedicated focus on finding candidates who align perfectly with your long-term goals.
Complexity
Retained search for Specialized Skills: Roles demanding specialized expertise benefit from retained search. Recruiters invest time in understanding the nuances of these positions, resulting in a tailored search for the best-fit candidates.
Contingency Recruitment for Common Roles: For positions with a larger candidate pool and more standardized skill requirements, contingency recruitment can yield suitable candidates more swiftly.
Budget
Evaluate Cost Implications and ROI: While retained search involves an upfront fee, consider the potential long-term benefits of securing top-tier talent. For contingency recruitment, remember that the fee is contingent upon successful placement, which might align with immediate budget constraints.
Company Size
Retained for Larger Companies: Larger companies with more intricate staffing needs and resources to invest often find value in retained recruitment’s tailored approach.
Contingency for Smaller Companies: Smaller companies might opt for contingency recruitment due to its cost-effectiveness and quicker turnaround, especially for roles that don’t require extensive search efforts.
Long-Term vs. Short-Term
Consider Organizational Growth Plans: If you’re hiring for a critical role that’s integral to your long-term vision, retained search can help ensure you secure candidates who will contribute to sustained growth.
Short-Term Projects: For short-term projects or positions that might change based on evolving company needs, contingency recruitment can provide the flexibility to quickly adapt to changing circumstances.
Below is a scoring table to help you see the difference between the two types of Recruitment. Scores range from 1 to 5, with 1 being the lowest and 5 being the highest recommended option.
| Factors | Retained Search | Contingency Recruitment |
|---|---|---|
| Urgency | 4 | 5 |
| Complexity | 5 | 3 |
| Budget | 3 | 4 |
| Company Size | 4 | 3 |
| Long Term vs. Short Term | 5 | 4 |
NOTE: the scores provided are based on De Vore Recruiting’s own knowledge and understanding and may not be universally applicable to all situations. It’s important to consider your specific organizational needs when making recruitment decisions.