Contingent Vs. Retained Search: Which is Best?
When a firm needs to make an executive or senior level hire, many consider working with a search agency. As HR and Talent Acquisition consultants, we get asked all of the time about what the differences are between the several search options. The most common question we get asked is the similarities and differences of a contingent search versus a retained search. Based on the variables in each search, there may be advantages to one approach over the other. Here are the pros and cons to consider below.
Pros & Cons of Contingent Search:
- There are no up-front fees with a contingent search.
- Contingent search firms are paid only upon the successful completion of a search—typically when the candidate accepts the position.
- The search firm engages with the client from search launch to candidate acceptance.
- Clients have the benefit of the search agency’s tools such as sourcing tools and job board subscriptions.
- A search firm may have an area of specialization or may be generalists.
- The placement fee may be lower than a retained search fee.
- When engaging with a contingent search firm, the firm determines what resources to dedicate to each search.
- The recruiting and search strategy/approach belong to the search firm, the approach is typically not customized.
- This can be a good option to use when a high volume of resumes is needed or with searches, which do not require a customized strategy or approach.
Pros and Cons of Retained Search:
- A client pays a fee to retain a search firm, typically exclusively, such that the client carries some of the risk.
- Retained search is a consultative approach in which a client and search firm work together to determine the recruiting strategy, dedicated resources and the process to follow.
- The search firm consults with its client from job description creation and compensation benchmarking through to the new hire starting work.
- Clients have the benefit of the search agency’s tools, with Helios, this includes compensation benchmarking, sourcing tools and job board subscriptions as well as our overall network and talent community.
- Typically, a firm has an area of deep expertise, such as the HR depth with Helios.
- Candidates are thoroughly vetted as part of the customized approach.
- When the search firm has a well-developed talent community, it has a knowledge about who to hire and who not to hire.
- A retained search has a consultative approach, which can be customized uniquely with each engagement.
To summarize, a retained search is a good approach for a client seeking dedicated resources, a customized, quality-driven approach. A contingent search is a good option for a client who wants to leave their options open with multiple search firms and does not want to shoulder any risk.