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Is Your Recruiting Budget ‘Retaining’ Water?

Executive Suite

Why a Mutually Committed Search is a Win, Win, Win

By Steve Margalit, FPC Recruitment Training Consultant

When it comes to hiring a professional recruiting firm, many companies view their options through a very black and white prism. The perception is even more apparent when they engage with an executive recruiter. The two most common terms you’ll hear for types of searches are retained and contingent. What do they mean? What are the benefits of each? What are the drawbacks? Which is most effective? Is there a middle ground that can create a win, win, win for everyone – perhaps a ‘retingency’ or a ‘container’? Let’s take a closer look…

Retained search is generally implemented when a hiring client company has ongoing recruiting needs, possibly for multiple assignments and disciplines, forms a partnership with a search firm to manage recruiting initiatives. Typically, one third of the anticipated fee is paid up front, the second third is paid after thirty days and the final payment is made upon completion of the search.

Contingent search by definition indicates that the search firm will collect the fee when a suitable candidate is successfully hired for a particular position. This type of search may or may not be structured contractually with the client company and is 100% “back-end” loaded. Contingency search generally indicates no exclusivity for the recruiting firm, but does offer significant flexibility on both sides.


 Retained Search

    • High priority
    • Exclusive candidates
    • Expertise/Specialization
    • Access to pipeline of top talent
    • Pay for service
 Contingent Search

    • No upfront fees
    • Access to pipeline of top talent
    • Expertise/Specialization
    • Efficiency
    • Pay for performance


Retained Search

    • Nonrefundable prepayments
    • Higher fees
    • Hands-off lists
    • Formalized contracts
   Contingent Search

    • Watered down message to the candidate pool
    • Focus on speed to market
    • Priorities change
    • Highly competitive

Wouldn’t it be great if you could combine the best elements of both types of searches and create a mutually committed, or ‘Retingency/Container’ Search?  Well guess what, you can!!  I think we can all agree that when both parties in ANY relationship are invested, the results of their interactions improve dramatically.  FPC offices have been very successful in creating mutually committed relationships with our contingent clients.  We are currently in a job rich, ‘quality candidate’ poor market.  Given that situation, contingent recruiters can be more selective than ever before in the jobs they choose to prioritize.  Using a meet-in-the-middle-approach, we combine a feeling of commitment, an increased sense of urgency, and a manageable upfront payment to get started.

Paying an Engagement Fee to your contingent recruiter upon agreement of the search assignment (10-25% of the anticipated fee) shows that you are making a real commitment to filling the open position.  The engagement fee accomplishes two things for the hiring company.  First, it makes the search a higher priority for the recruiter, which increases the likelihood of a positive outcome.  Based on their traditional fee structure, contingent recruiters are very assertive; knowing they have a committed partner will motivate them to complete the task at hand.  Second, in comparison to the upfront fees associated with a traditional retainer, the cash outlay or deposit is much more manageable for the hiring company.  In addition, you still get all of the other benefits that come with a contingent search, including but not limited to, industry expertise, specialization, efficiency and access to a pipeline of top talent that is unencumbered by hands-off lists.

When it comes to designing the right search to fill open positions within your organization, you CAN choose from both column A and column B.  By securing the recruiter’s commitment with an engagement fee, you will drastically increase the chances of creating a WIN for you, a WIN for the candidate, and a WIN for the recruiter.  Good luck, and let us know how we can help.

FPC is an executive search firm comprised of over 65 offices nationwide that specialize in placing middle and executive management professionals. FPC National surveys professionals to gain better insights on workplace and job hunting trends.

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