Often hiring organisations gloss over the differences between retained executive search and contingency recruitment. However, a closer look at the two demonstrates that there are pros and cons to both resulting in different types being more appropriate for different recruitment challenges.
Sometimes executive search firms will offer both types of recruitment, according to what you will benefit from most. Other times you find specialist retained executive search firms who only undertake this type of recruitment.
Let’s dive into explaining each particular type of recruitment.
Retained executive search firms are the purest form of headhunters. They are specialist recruitment consultants who don’t simply focus on matching a job specification to a candidate’s skill set. Instead they undertake a careful research process into what the business actually needs to drive growth and succeed and then specifically searches for an individual who fits that role.
Retained executive search headhunters are therefore paid for the search process, usually in advance (or partially in advance). The result is most usually a successful high-calibre hire.
Contingency recruitment operates slightly differently. Here the recruiter’s role is much more akin to matchmaking. Sometimes this is carried out by headhunters, but also is within the realm of more standardised recruitment agencies. They take the job description and hunt down all available candidates who fit the bill, not necessarily the single most qualified, or the one who is already working wonders elsewhere and not actively looking.
Typically, contingency recruitment fees are only payable when the successful applicant is recruited. The fees are usually a percentage of the new recruit’s annual salary.
On the face of it, hiring organisations could be tempted to go down either route at any time. After all, if the position is filled then the job is done, yes?
In reality, you need to understand the differences between the two types of recruitment to realise that retained executive search (whether you pay in advance, in arrears, or in stages) is much more suited to executive level recruitment. Contingency recruitment on the other hand is much more suited to lower-level positions which require a generic and easily available skillset.
This is because to hire a high-level executive at the CEO, CFO, or even director level requires extreme dedication at the search stage. You cannot take a punt on these positions. You need to get them right first time and know you are selecting a candidate who has proven their ability elsewhere.
Firstly, you may not even be 100% sure of what the precise combination of attributes and talents you need for growth is. An ordinary job description simply doesn’t cut the mustard. You need a specialist headhunter who can use their expertise and experience to truly identify what you need. Only at that point they embark on hunting down the individual who meets the bill.
As retained executive search headhunters are paid for the search rather than the placement, the result is more likely to be one of excellence for the business. It is therefore very much a management ‘tool’.
However, efforts to this degree are potentially costly if they are not truly needed. For lower level roles where job descriptions and specifications are more straightforward, it would seem foolish to waste energies and expense where it isn’t needed.
Yet there is a grey area between the two levels: executive level positions which are lower level, but still critical and pivotal for the organisation. Here you need headhunters who are prepared to adapt their recruitment approach to the best of both worlds for your business.
Notably, contingency recruitment will typically only draw from a pool of active candidates. These are candidates who are advertising their availability, for example through applying for positions.
Retained executive search firms don’t typically keep databases of active candidates in this same way. Instead they focus on hunting down the right individual for the job, wherever they may be.
The nature of the beast is that these individuals are typically already employed elsewhere. Therefore, part of the executive search is enticing and coaxing these individuals into the new position.
Another key difference comes from the fact that in retained executive search, especially when it is being appropriately used as a management tool, uses just one company. Contingency recruitment may see several different recruitment firms, or indeed recruitment methods, in on the act. This becomes a race to fill the role quickly, rather than necessarily in the best manner.
With retained executive search what you are paying for is the systematic analysis and research that there isn’t time or resources for in contingency recruitment.
Ultimately, the proof is in the pudding. Both approaches typically result in a hire, possibly even a successful hire. However, the ultimate outcomes can also vary enormously.
Retained executive search firms need their candidate research and headhunting approach to be successful for their continued achievement. Therefore the search tends to be exhaustive so that you are sure that you get the very talent on board for your business. Furthermore, that talent is manoeuvred into position to work for you, not someone else. This of course isn’t an overnight process.
Contingency recruitment on the other hand will get your position filled much more rapidly. But you won’t have absolute certainty that you have the cream of the crop, or indeed a driving force for the future of your business. There’s also nothing to stop the candidate they find in the course of their search for you, being positioned in front of your competitor.
Fundamentally, your business is only as successful as your recruitment. You need the business driving seats to be occupied by the very best in your industry. A headhunter is the right recruitment strategy at the executive level. However, what you really need is a flexible headhunter, one who leverages a range of their own recruitment talent and knowledge to ensure you are ahead of your competitors.
To get Eagle Headhunters discovering your future talent, call today on 0203 582 2663 to discuss how we can work for you.