Posted on / Updated on / in Blog /

It’s recruiting month & we’re back with another recruiting topic!

Last time, we inspired you with 10 inspirational recruiting quotes. This time, we’re talking recruiting assistance.

As business owners, we all know that things can get pretty busy. And sometimes we just need a little help.

When it comes to recruitment help, there are two options: use a retained executive search consultant or use a contingency recruiter.

So, today we’re answering the all-important question: What’s the difference between the two?

To answer that question, we’ll first break down the basics. Then we’ll go into depth about the processes and methodology of both.

Let’s get started.

In short terms, here’s the difference between retained and contingency recruiters:

Retained Search:

• Recruiting firm is paid retainer fee, which is a percentage of the placement fee at the beginning of the search; the total fee is usually based on a percentage of the annual salary offered to the selected candidate
• Recruiter operates on an exclusive basis (only they are conducting the search)
• Weekly updates and communication on the search progress are provided

Contingency Search:

• Recruiter doesn’t get paid until (or unless) the client hires one of the recruiter’s candidates
• Recruiter does not operate on an exclusive basis; usually is in competition with the internal HR department, direct applicants, other recruiting companies, etc. to get the hire

Now let’s dive in and get a little more in depth.

Recruiting Process:

• Retained: A multi-step process; includes interviewing the client to fully understand the position, conducting original research on candidates (including targeting organizations that are likely to employ solid candidates), recruiting passive candidates and screening candidates through interviews, valid assessments and background checks; will also negotiate with candidates
• Contingent: Shorter process; includes learning the basics about the position opening, scanning known resumes, and submitting resumes that fit as soon as possible

Typical time period:

• Retained: A carefully thought out timeline with milestones set throughout the process; is usually on a 90- to 100- day completion schedule depending on the level of the open position
Contingent: Usually a hit or miss situation, as the contingent staffing company cannot afford to invest too much time since they are in competition with others and may not secure the hire

Level of input from client:

Retained: Work very closely with clients and use an agreed-upon methodology and sourcing strategy
• Contingent: Less input from client concerning the process

Candidate Submissions:

• Retained: Work exclusively for client; won’t send client’s candidates to other companies
• Retained: Usually present a minimum of 3 candidates for client to interview and select from; the submitted candidates will have gone through the whole process and will match the client’s needs across the board
• Contingent: Typically work for several companies at a time; sometimes send same candidates to multiple clients in hopes of getting a hire
• Contingent: Deliver several candidates in order to increase their odds of making a placement; usually these are benchmarking candidates in the hope that one will stand out

What this means:

As you can see, the two options have their differences. Choosing which one is best for your company varies depending on the needs of your organization and the position you are looking to fill. Here are a few examples of times when companies may prefer the use of one over the other:

Retained:

  • When filling an executive-level position or a position in which the best candidate, not just a qualified candidate, is needed
  • When a company wants help with screening, interviewing and negotiating with candidates
  • When a company desires a recruiter who will be dedicated to filling the position& who will take the organization’s culture, etc. into account

Contingent: 

  • When several candidates are likely to be qualified for the position
  • When filling multiple positions with the same job description at once
  • When a company wants to handle screening, interviewing and negotiating with candidates

If you have any questions or would like to know what is best for your company specifically, contact us by calling 877-753-0970 or filling out this form.

Budgets are tight. What are you doing to help your bottom line?
Top 5 Reasons HR Outsourcing Improves Your Bottom Line

Our team talked to business leaders who have taken the step to outsource HR and provided real world insights and learnings in this free resource. Learn more about how HR Outsourcing can impact your bottom line, and see if it is a good fit for your business.

New call-to-action

about the author: Amy Letke

Amy Newbanks Letke, SPHR, GPHR, is the Founder of Integrity HR, Inc. Amy provides workplace solutions to improve performance, reduce liability and increase profits. She is passionate about helping other entrepreneurs and business owners achieve success.