Contingent, Retingent, and Retained Search Options
A contingency search allows a client to use a professional search firm to help them find qualified candidates with no out of pocket expenses up front but only when a candidate is hired and starts. The main objective of a contingent recruiter is to qualify many candidates and resumes as possible and send them as quickly to multiple clients before their competitors do.
At DJKCO our contingency group takes a focused search approach for every job position they work. Our recruiters directly source candidates utilizing our specialized database, job boards, online research tools and direct cold calling. Identified candidates will be screened and presented to the client based upon the position profile. The success to any contingency assignment is directly contributable to the communications between client company and recruiter. Direct recruiting is very time consuming, and proper feedback is essential to finding the candidate that is a perfect match. The more engaged our client is the better our results will be. Since our recruiters typically work several contingency assignments at a time, those clients with quick and detailed feedback have the greatest success rate.
As mentioned above, contingency search has no upfront costs and we are only paid when a candidate is placed. Our standard fee is 25% of first year base salary with a 90-day guarantee. If for any reason the hired candidate does not work out, we will fill the position again for free. A contingency search has one recruiter
assigned to it. The recruiter has access to all of our advanced recruiting tools and our research database. They will be your single point of contact through the entire process. The recruiter assigned to your position will have expertise in the practice area that corresponds with your search.
A Contingency search works well for companies who desire a client-vendor relationship.
Using the contingency model for doing a search, a client may have several recruiters that are attempting to fill a position. While a client may assume having several recruiters to find a candidate is to their advantage…there are some major drawbacks.
We have found at times that the process can be rushed. The first good candidate presented can become the frontrunner in the search. Because of time competition good can be polar opposite of “great”.
The old saying that “time is money” fits into the contingent model. The client will receive a measured response from each recruiter. Because there is no exclusive commitment, job orders are on a time-resource availability. Each job order must be balanced against all other orders currently available to the recruiter.
Another potential drawback to contingency arrangements is because of the competitive nature the recruiters are hesitant to give the name of a company right away because it can create further competition from other recruiters and risk the possibility of the candidate going direct which can cause irreparable differences in the relationship.
Contingency searches involving multiple recruiters can be more time consuming from a client perspective. There tends to be more interviews with this approach with more people involved. If you are interviewing the right people, that’s terrific. Unfortunately, multiple candidates that miss the mark, the contingency process can absorb valuable time that many clients do not have available.
Because the contingent arrangement is non-exclusive, the candidates surfaced will be presented to more than one client which at times creates a quantitative approach insuring that the numbers work in the recruiter’s favor. From a client perspective, this may be an acceptable approach if the open positions are of low to medium priority to the organization and the timing is not critical.
Retingency, (aka: container or engaged) is a solution that is becoming more viable to our client’s. It straddles the fence between contingency and full retained search. Under a retingency agreement, DJKCO charges clients 20% of the first year salary. An initial engagement fee of 25% of projected fee to begin the search and 75% remaining balance at the end of the search. We also have a 120 day guarantee free replacement. The engagement fee to be applied toward the final invoice once the position is filled. Retingency guarantees dedicated resources for our clients to include a researcher and a recruiter for each position. This has become a proven solution for critical openings with very specific or challenging special niche requirements. Besides the reduction in fees, our clients also like this approach when they have many needs that are similar or “grouped” in nature.
DJKCO will utilize this initial retainer to engage our internal research department and generate search-specific research targeting potential candidates from specific companies, industries, geographies or skill-sets.
Because we work on these critical executive openings on “mini-retainer,” we get potential candidates by using Client company name to respond who might not otherwise respond to “contingency” inquiries.
At DJKCO, retained searches are for positions for top level assignments. The salary range is normally 200k +. In this relationship the client pays the recruiter fee in three equal installments. This method works well where client wants to have stretched payments. The search begins when the client signs the exclusive retainer agreement and pays the initial retainer. The remaining two payments are tied to specific time lines or performance outcomes. The client has greater control of the process of the candidates. The recruiter is not at liberty to present the candidates identified to other companies until the client either fills the position or releases the candidate by stating no interest.
In order to justify this type of relationship, client must have highest priority on the position. The standard fee for retained search is 30% of first year base salary with a 180 warranty to replace candidate free. Also, in addition to the fee, retained consultants ask clients to reimburse them for out-of- pocket expenses-mainly travel expenses for candidate interviews. Contingent and Retingent recruiters normally do not incur these expenses.
Retained Recruiters are not motivated to sell candidates in helping them find a position. The same method used in contingency search. They are being paid for the process of selecting the best candidate. This method works best when there is a high level of trust from all parties involved.
What are the benefits of a Retingent search?
Many companies like this method because both parties have “skin in the game” which is motivation for everyone involved. The Retingent engagement fee relationship is designed to capture the recruiter’s attention and secures the client a firm level of commitment and resource allocation. This arrangement is most appropriate when the client places a great priority on the position and timing for filling the position is critical.
Retingent recruiter relationships work well for companies if these conditions apply:
- The need is urgent and critical to the company’s mission.
- There may be some decent candidates in a front runner position but you are not sure that there may be other candidates better qualified.
- You are looking for accountability from a recruiter which provides a high level of trust on both sides.
- You are willing to pay for the expertise for their time to seek out the best candidates.
- Client would like to have candidate control before they are sent to their competitors.
- Client enjoys the process of working with a recruiter on a joint venture relationship.
- Clients have a dedicated resource that is engaged on the search until completion, no matter how difficult the search may be.
Which search option is best for you?
It depends. Contingency recruiter relationships may work best for you in the following circumstances:
- There are high quality candidates available.
- The need is less urgent and mission critical.
- You have more time to interview and vet candidates.
- When is a good time to use Retingent search?
- You like working on a retainer basis but do not want to pay a retained fee to a recruiter who doesn’t complete the search. Client is still responsible for full amount of fee should you identify a candidate on your own or cancel the search.
- You like working on a retainer concept but you are starting a relationship with a recruiter who is untested with your company.
- You are interested in seeing if this method is more effective for your company.
- You have a strong commitment in having the search completed.