By Brian Mitchell, CEO & Managing Partner

A client recently asked me why my blog entries rarely include insights on a topic with which he considers me a subject matter expert – recruiting. I thought about my own evolutionary path over the last 10 years in the recruiting industry and some of the common questions I’ve heard. One in particular is where people want to understand the differences between retained vs. contingency recruitment models.

At the surface, retained requires money-down in exchange for minimum commitments from the recruiter whereas contingency effectively provides no commitments from either party. A few of the pros and cons from these models

include:

Retained                           Contingent

Performance guarantees                      Yes                                          No

Extended replacement guarantees    Yes                                          No

Candidate Exclusivity                             Yes                                          No

Devoted full-time resources                Yes                                            No

Shared risk with recruiter                    Yes                                            No

Low-risk for client                                 No                                              Yes

High-risk for recruiter                          No                                             Yes

Commitment to fulfillment                Yes                                             No

Multiple recruiters OK                         No                                              Yes

Client shares all ideas including candidates Yes                               No

You may notice “cost” or “value” is not on the list, but it is clearly an important element. But how we perceive cost/value varies. If a slew of contingent recruiters conduct a surface search for a couple of weeks and come up empty, they simply move on to another assignment. What has a client “saved” in that scenario? They are under no obligation to send you any candidates or make a single recruiting call on your behalf. They are in a speed-focused race “shopping available candidates” to as many potential companies as might buy. That is the model. Qualitative filtering is actually against their interests because it decreases their odds of making a placement. With 3 decent candidates and 3 decent companies, the contingent recruiter can generate 9 first interviews, which fits into some historical formula towards their success. Contingent recruiters drive volume to make placements.

Retained recruiters help build great companies one impactful leader at a time. The retained recruiter understands the role is critical or the hiring CXO/board wouldn’t have entrusted them in the first place. The spirit of retained contracts dictate that the recruiter is obligated to contact and compel the very best professionals for the role, not simply skim who is available and “looking”. Very rarely do retained recruiters place unemployed people. In fact, their candidates are much more likely not only to be gainfully employed, but heads down, immersed in excellence and kicking ass wherever they currently work. The impact player is who companies want to hire and those are the candidates the retained recruiter must be able to bring to the table. The retained recruiter knows that the quality of their candidates and their sustaining impact on client companies is how their reputation is built. For me, a retained recruiter, I’m maniacally focused on my client’s experience and my placed candidate’s impact in their hired position.

Answer two questions: Have you ever made a mishire? Can you afford a mishire on this search? If you answered “no” to the first question, you’re lying. If you answered “no” to the second question, scrutinize a few retained firms and hire one.