When it comes to hiring the best talent, it is worth noting that it is not as easy as it seems. Finding the best talent need a deep understanding of the company culture and an expertise in assessing the skills, leadership style, and cultural fit of candidates. The process is even vital more so when hiring top management position since the new candidates will have an impact on the culture and the strategic decisions of the company. Nowadays, several executive recruitment agencies have emerged that assist organizations to get the best candidates to fill the available positions.
A contract between the recruitment agency and the client can be categorized into either retained search agreement or a contingent search agreement. In this article, we will take you through both models to assist in choosing the one that is right for you.
A recruitment agencies can adopt a retained search model in the search of superior expertise. Suppose a firm decides to use this model, it will have to create and stick to the off-limits agreement, meaning it will not source candidates from a current employer. Of limits agreements call for clients to pay larger recruitment agencies a fee for them to qualify for such agreements. Besides, this model is ideal for clients looking for senior-level positions. It is worth noting that companies that adopt the retained search model will have to pay a thirty percent range placement fee of the annual compensation for the position.
When you want to pay for a placement fee under the retained model, you will have to go through three steps. The steps involved in payment include one as a retainer to initiate the search, one at a time or milestone date during the search, and one upon the placement of the candidate.
Unlike the retained search that focuses on top positions, contingent search puts more effort of filling mid-level to lower level positions. Just as the name suggests, recruitment firms that work on contingency tend to get paid once a candidate is placed. The contingency fee a firm will pay is lower than that of the total annual compensation than for a retained search.
In retained search, you can find multiple firms working on the same search, however, this is not possible with a contingent model since the searches are not exclusive. Therefore, to increase the number of resumes received, you need to seek the services of multiple recruitment agencies. With retained search, clients cannot conduct their own search or choose to recruit from within, however, this is possible with contingent recruitment model. Therefore, depending with the needs of your organization, you can choose between contingent or retained recruitment model, however, you need to keep in mind the properties of each model when choosing.