Retained versus Contingency Search...Which is right for you? By Jim Hicks—September 1999 Occasionally we are asked if we would be interested in taking on an assignment on a contingency basis. Usually it is because the client thinks that they will get better coverage by giving the search out to a lot of different firms. They also fear the loss of the retained fee if for some reason the search ends without a successful recruitment. With contingency, they know that they will not have to spend any money on search fees unless they hire somebody.  But do they really understand what they are giving up by going the contingency route? Are they really finding the best candidates who will flourish in their particular culture? And, what do they give up in terms of timing? In the world of contingency recruiting, the recruiting firms simply cannot afford to really delve into exactly what kind of talent that you need, nor can they afford to initiate too much sourcing activity in an effort to find you the best people. The obvious reason is that they never know if they are going to get paid anything at all. So what happens? They typically search their database and bombard you with resumes with the name of their firm emblazoned at the top so that if you ever choose to hire any of those people that you will then owe them a fee. And that fee is typically almost as much, if not more, than a retained fee that you might agree to pay a single firm who knows you and your business and is capable of identifying and recruiting the kind of talent you need. Essentially, the contingency firms will all tell you that they will stay on the lookout for you and then they will fax you a resume from time to time. In most cases, they will have never met the candidates or maybe never even talked to them. So, in the course of a year, you may receive several hundred resumes to review and will spend an inordinate amount of time screening them and deciding who among all of these unscreened candidates is worthy of an interview. Now, we’re talking about a real investment on your part...your time. In most companies, time spent on interviewing is time not spend on what the company is paying you to do. So, depending on the level of those folks doing the interviewing, the company could be spending upwards of $200 per hour or more interviewing unscreened candidates. And frequently those doing the interviewing don’t really know what they’re doing. Further, you are primarily going to see just those people who are actively looking for a job and have sent out their resume to lots of recruiters. You never even get a chance to talk to some of the real quality talent out there who are probably not looking for a job. There really is a better way to handle your recruiting needs other than simply telling several contingency firms to keep their eyes open. And it really doesn’t cost any more. In fact, it costs far less in the long run, particularly if you factor in the positive impact that superior recruiting can have on the business in general. The Ansley Consulting Group is primarily a retained executive search firm, although we have occasionally accepted an assignment on a contingency basis. But not before explaining to clients what they might be sacrificing by not choosing the retained search. Actively calling, sourcing, searching for superior candidates and not just depending on those in our database or those who are sending us resumes out of the blue. Setting up an exclusive Client Recruiting Website, which is also available to any client employee who might want to use it for referring interested parties. Conducting face-to-face interviews with candidates before introducing them to the client. Interviewing candidates who were originally identified by the client. We need to be in a position to advise the client on all hiring...not just on the people that our firm identified first. Providing the client with a continually updated candidate grid, showing them the big picture of the recruiting situation at any given moment. Preparing formal written reports for each candidate prior to asking the client to meet the candidate. Conducting extensive reference checking before the offer of employment and documenting these with formal written reports. Actively facilitating the negotiation process including issues involving position description, base salary, bonus opportunity, fringe benefits and relocation. Keeping candidates warm until the client is ready to hire them. In addition to all of the above, a retained search agreement also provides for the replacement of any employee who leaves the firm for cause or on his/her own within one year.  In this case, the client pays only for expenses incurred in replacing that departed individual. At best, the typical contingency firm will only offer a 90-day guarantee and then what?  Since they really didn’t search for the candidate in the first place, the guarantee means that they will keep sending you resumes until you tell them to stop...this could take years. The bottom line is that the only real advantage of contingency search is that you don’t pay anything if you don’t hire anyone. So, if you’re not sure you want to hire anyone, and you have a lot of time available for interviewing unscreened candidates, then we would recommend that you go the contingency route, that is if you don't mind tying up the time of senior executives with endless interviews... Otherwise... The decision to go the retained search route really hinges on the confidence that you have in a particular search firm.  Since you are going to depend on only one organization to find the type players that you need, you may want to ask yourself a few questions before proceeding: How well does the search firm know our business, our industry and our particular culture? Are they capable of identifying, assessing and recruiting the type of talent that we need?  Can they really sell the opportunity with our organization to superior candidates? Are we ready to partner up with them in developing and executing a sound recruiting strategy that will enable us to recruit the best possible talent for all positions? We, The Ansley Consulting Group, welcome the opportunity to work with you on developing and executing a superior recruiting strategy for your organization. Most companies talk about human resources being their most important asset....let us help you put that talk into action at the most important time of all...the time when those human resources are selected.