Choosing the Right Recruiting Model for Your Business

In today’s volatile and fast-paced business world, hiring and developing strong upper-level managers and resilient C-suite executives is more crucial than ever. Leadership teams need to tackle tough challenges head-on, and finding, assessing, and recruiting top talent at this high level is no small feat.

If you’re considering outsourcing your leadership hiring needs, you need to understand the difference between contingent and retained executive search. Let me break it down for you in simple terms, so you can make the right choice for your organization and budget.

What is Contingent Search?

Contingent search is like playing the lottery. You engage multiple recruiting firms, and they race to fill your roles— contributor roles up to mid-tier management positions below the Director or VP level. These firms submit as many candidates as possible, hoping one sticks. It’s a non-exclusive, no-win, no-fee basis, meaning they only get paid if their candidate gets hired.

Benefits:

• Cost-effective: You only pay when a candidate is successfully placed. No upfront fees.

Drawbacks:

• Less Thorough Vetting: High volume can lead to less detailed candidate evaluations.
• Potential Overlap: Multiple firms could submit the same candidates, wasting your time. Saturation in the market, company brand may become compromised.
• Diffusion of Responsibility: No single firm is truly accountable, leading to a lack of commitment.

What is Retained Search?

Retained search is the VIP treatment. It’s best for highly specialized, confidential, or critical leadership roles—Director to C-Level. You partner exclusively with one retained search firm. They target passive candidates, the top performers who aren’t actively job hunting. It’s a meticulous, in-depth process that can take 90-180 days but delivers the cream of the crop.

Benefits:

• Thorough Vetting: In-depth evaluations ensure candidates fit your exact needs.
• Dedicated Attention: The firm works exclusively for you, providing focused, committed efforts.
• Strategic Approach: Leverages market knowledge and networking to find top talent.

Highlights:

• Cost: You pay upfront fees.
• Process: The search process can be more time-consuming.
• Commitment: Requires a strong, ongoing partnership with the recruiter.

Additional Perks: Some retained firms offer coaching, training, and onboarding sessions to ensure new hires are ready to hit the ground running, freeing up your HR team for more strategic tasks.

When to Use Contingent Search

• Individual Contributor or First-level Manager Roles: Ideal for roles up to the Director or VP level, typically earning up to $150,000 in total annual compensation.
• Budget Constraints: When cost is a primary concern.

Typical Costs: Fees are around 20-25% of the total annual compensation.

When to Use Retained Search

• Senior Leadership Roles: Critical roles at the Director, VP, and above levels.
• Confidential or Critical Searches: When discretion is essential.
• Dedicated Recruitment Partner: When you need a committed, accountable partner.

Typical Costs: Expect to pay 30-35% of the total first-year annual compensation. Fees are divided into three payments: one-third at the start, one-third within 45-60 days, and the remainder upon successful hire.

The Hybrid Search Solution

Here’s the golden nugget: don’t limit yourself to just one model. Find a capable search firm and carve out a master agreement based on the level of the position. Look for a hybrid provider who can tackle both professional and executive-level positions with the same rigorous methodology. This approach ensures you get the best of both worlds—speed and volume for lower-level roles and meticulous, dedicated attention for high-level positions.

Unfortunately, not every firm can deliver against this model. This approach consists of having recruiters with the appropriate level of experience and the knowledge of both models.

If you are wondering about pricing under the hybrid model? It depends on the structure of the engagement, and happy to discuss.

Please reach out me directly.

Finding the best recruiting firm for your company hinges on your specific hiring needs and preferences. Collaborate with department managers to define your ideal candidate profile and choose the recruiting model that aligns with your goals.

Stay informed, be strategic, and make the right choice for your recruitment needs!