What are retainers and do they work?

As some of you may have seen the other week I posted a Poll asking ‘Have you heard of a retained search before’.

The results were:

38% - Never heard of it

38% - Heard of it

23% - I’ve used retained searches?

I don’t think the results were massively surprising to me, however with over 75% of people having never heard of this way of working before or heard of it but not used it - I was really keen to share my experience and knowledge of working this way.

So firstly; what exactly is a retained search??

This is where you work with your recruitment partner on an exclusive basis and the recruitment fee is paid in different stages of the process.?

Confusingly there are several different ways this can work, but here is one typical example that is often used.?

Example of a retained fee structure:

1. A third of the fee is paid upfront, before the search commences.?
2. The second third is paid on an agreed set of deliverables; such as the short-list of CVs, or the first rounds of interviews booked.
3. The final third is paid once the contract is signed on the person the client wants to hire.?

As with anything the above structure is flexible and can even be in two parts depending on what works for both sides of the partnership.?

I also think people expect this way of working with your partner is just for very high profile head-hunt type searches for C-level positions. Now don’t get me wrong this is very common in this circumstance, however honestly it can work extremely well for any position - one hire through to hiring full teams.?

Why would you want to work this way??

I could go on all day about the benefits of working this way with your recruitment partner but I am going to try and keep it balanced as there are pros and cons to everything :)?

Some benefits include:??

• Increased trust between both parties; a big thing to think about from a client's perspective is having one trusted partner talking about your brand in the right way in the market. Making sure the tone and narrative is inline with your company story, values and culture.?

• Commitment from the client that they really do want to make that hire for the business. Also commitment from the agency that they will work to deliver the right person (often no matter how long it might take).?

• Quicker results; role dependable of course, but often your recruitment partner will prioritise a retained search over contingency recruitment

• High quality of service; often with retainers there may be other parts to the agreement; such as references sent over at CV stage.?

• Less time commitments; only having to work with one agency has huge advantages in saving time.?

• Each hiring cost is spread out into instalments across the process; this can help with monthly budget management rather than having the one lump sum at the end.?

Areas of risk to consider:

• Picking the wrong partner; it does happen. Making sure clients do their due diligence on partnering with the right agency and often the right consultant.?

• Initial invoice will be due to be paid before the process has started.?

Now it’s all well and good, all of this coming from my own experience; making sure we had a really balanced article here often when looking at the pros and cons. Here are some quotes from clients that have been working in this way over the years.

Quotes

‘This is an area we use a lot, something I am a strong advocate for, if it is not a retained search with our partners then we would work exclusively with them.?

It really is about the mindset shift in industry, so much is done from the recruiter before the hire is made such as; market mapping, understanding the position, understand the company & culture, does what we are looking for exist in the market, are we paying the right salaries. There is a huge amount of work that goes into this.

Within the recruitment space there are bad behaviours from clients; we don't pay for all of these services but expect it, so we still see that level of ghosting, awful CV racing without actually speaking to the candidates. We as an industry are built around speed not quality.

The benefit of a retainer is that it flips this.?

You do need to be clear on how you interact together and be clear on what the ask actually is. It was over 10 years ago I started using retainers, and now even more goes into each hire - the level of data and detail needed at every stage has increased.

Of course there is the chance the agency is just so bad, but to be honest I haven’t had this, we just keep going until we make the hire.?

For example we have a C-suite search under offer at the moment, and we work with the partner that if this person doesn't land what do we fall back on? But creating that genuine partnership means that the process will continue if this happens.?

Of course we still pay on success - as it should be. However there is just so much work that goes into the very beginning of each process.?

We have perpetuated this, agencies give this away for free and the value is entirely placed on the hire often with a massive rebate period. I feel this creates these god awful behaviours, valuing speed over everything else but then we blame other people for these behaviours.?

When asked if the retainer worked for them:

‘No, they did not.

I appreciate and understand the reasons for them, recruiters do a lot of work and there is a need to protect themselves.

However, for us the recruiter did not understand our recruitment and in the end did not place a person. Which meant that we were "out of pocket" and then had to partner with a different agency to fill the role’

Does it actually work?

In my personal experience, myself (over the last 12+ years of my career)? and the team at Inara have never once not delivered on a retained partnership.?

So for me, this works 100% of the time.?

Now of course I cannot comment on the whole industry but I think if you pick the right partner for you, you have upfront honest communication and you both understand the expectations then I cannot see any reason why it wouldn’t work!?

If you are not sure, let’s have a chat and we can talk about this way of working :)?