Differences Between Retained and Contingency Search Firms
One of the most commonly asked questions of hiring authorities is explaining how working with a retained search firm differs from a standard employment agency. The following information, gleaned from other search colleagues will help you understand the vast differences.
Retained: Represent employer clients only
Contingency: Can and do represent individuals seeking placement
Retained: Conducts assignments on an exclusive basis only
Contingency: Are usually in competition with other similar firms or agencies for the placement
Retained: Professional staff tends to be compensated on salary, bonus, profit-sharing basis with incentives for client business development
Contingency: Professional staff tends to be compensated on commissions for placements made
Retained: Usually work at higher organizational levels
Contingency: Usually work at lower organizational levels
Retained: Must know client organization and position responsibility/requirements thoroughly before implementing work
Contingency: Tend to spend less time on initial research and specification; may not even meet company management and deal solely on telephone
Retained: Focus recruiting and evaluation efforts on broad targeted range of potential candidates, most of who are not in active job market; process- and result-oriented
Contingency: Focus primarily on applicants/candidates actively seeking new employment; placement-oriented
Retained: Search consultant personally handles only about three to five assignments, on average, at any given time
Contingency: Work with multitude of job orders
Retained: Search consultant may invest 40 to 50 hours per month per client assignment
Contingency: Without a guarantee of payment for services performed, cannot afford to invest much time
Retained: Usually recommends two to four qualified candidates to client
Contingency: Known to submit substantially more paperwork to increase probability of placement
Retained: Requires minimal client HR and general management time investment
Contingency: Requires considerably more HR time in screening, interviewing and evaluating
Retained: Reputable firms offer a professional guarantee and commitment to thorough and ethical practices and results
Contingency: Reputable firms under no obligation to guarantee or produce results due to contingency fee arrangement (paid only on placement)
Retained: Fees based on percentage of salary, time or flat quote plus expenses; average 30 to 35% of individual’s compensation
Contingency: Similar fees in 25 to 35% range
Retained: Decision to utilize usually made by general management
Contingency: Decision to utilize usually made by HR
Source: Executive Recruiter News, Kennedy Publications, Fitzwilliam, NH