Difference Between Retained and Contingency Recruiting Firms
Businesses have a number of choices when it comes to choosing the best type of recruitment firm. Suppose you decide to go with either a retained or contingent firm. We’ll provide our views about both options. How do you as an employer determine what kind of company best suits your needs (?)
Retainer-based firms establish contracts with their clients to conduct tasks in strategic searches. Because it is a contract basis for the relationship, a retainer firm will only focus on an opportunity until a suitable candidate is discovered.
The name suggests that retainer-based companies will need an upfront payment to run the search. The fee typically is 50% of the total cost for the task. Firms that are retained work on an exclusive basis, meaning that the position is filled by the company for recruitment. They are able to operate using processes and agreed-upon methods for the client and the search company. As a customer, you can enjoy the security of knowing that you have an agreement that protects your interests.
Companies that retain search can create more credibility with candidates who are not actively seeking employment. Since retained searches are given the highest priority, most people are more likely to respond to the recruiter. The owned firms will announce the name of the business upfront to build credibility. If you are speaking to candidates, there is do not be shy when explaining why you are making contact or sharing information with your client. For higher-level positions, retained searches appeal to candidates at the executive level. There is no need to search for the purple squirrel that is a dreaded ogre.
We’ve observed that many top executives prefer to collaborate with retained firms. They are also less likely to post their resumes on national job boards, especially in cases where they would like their search to remain private. A retained company demonstrates an amount of commitment from the firm to fill the job.
The firms that are contingent are able to work on similar projects as well as working on other projects for their recruitment desk. Employers who work on contingency will often be competing with the client’s internal recruitment department as well as job boards and often other staffing companies that have received the same job. The challenge is to present the best candidate to your competitors beat them to the post. Sometimes, the result could result in quality over quantity.
In addition, companies that employ contingency recruiters usually let their assignments out to other recruiters, too. This is intended to allow the firms to be competitive to determine who can identify the top candidates to interview the most quickly. It can result in the use of a no-win, no-pay approach from the recruiter. There have been instances where several companies that offer contingency services claim that they had presented the successful candidate. These disputes can get to the point that an employer will decide that it’s more convenient to withdraw from the whole issue. Contingency firms are more efficient in bringing applicants to you as they are aware that the more applicants sent in, the more likely they are to secure a job. For certain positions that are easy to fill, this could be a good option.
If your business is in need of hiring a mid-management or lower person, you should consider an agency that is based on contingency. When the description of the position is general regarding the qualifications you’re looking for, then you need to use the services of a contingent recruiter. Employers looking for a distinct candidate with the right abilities and leadership skills are likely to hire consultants. The consultant will offer impartiality when selecting the right candidate for your requirements. It is a great time to choose a trusted retained company.
As a staffing firm that is retained, we are frequently requested by potential clients to explain the difference between owned and contingency firms. Most people didn’t realize the cost savings associated with working with a retained company.