Contingency Search vs Retained Search – Which is Better?

Executive Search Firms

Even for organizations with their own corporate recruiting team, seeking outside recruiting help can make good business sense, especially if they do not have an adequate network for a particular type of search.  Executive and specialized roles in general are the types of positions that typically require a focused approach and network that are unique to executive search firms. 

There are generally two models that search firms operate under: Contingency or Retained. Fundamentally, these two types of search models are very different, so it’s important to realize this distinction as one of these models is often the better choice for certain recruiting projects.


Contingency Search Model

Contingency search firms draw their name from their payment terms. Their fee is paid only upon the successful placement of a candidate, or on a contingent basis. 

Because contingency firms don’t get paid unless and until they place someone in the role, there isn’t a financial or reputational incentive to perform a thorough search for their clients. Their business model, and ultimate survival, relies on one outcome: placing someone in the role as quickly as possible – and before the competition.  To accomplish this, contingency firms typically focus on high velocity candidates – those who are actively looking for jobs and can start as soon as possible.  

While an effective approach for lower level searches, this model is generally not preferred for key hire positions as most candidates, and certainly the most desirable candidates, are not actively looking. They are Passive, and posting a job description online won’t find them. 

Retained Search Model

“Executive” search requires a consultative approach, acquiring a deep understanding of the client’s needs, drivers, culture, and specific requirements, along with an appreciation for the present-day influences impacting the candidate pool. (See below graphic) The search process itself typically involves extensive research, sourcing, vetting of potential candidates, initial presentation of the client opportunity, and continuous collaboration with the client team in areas of candidate profile, pipeline status, progress updates, offer negotiation, and post-hire activities.  This significant level of engagement is supported by the retained search model as the firm works on retainer, earning money throughout the engagement, not only upon placement.

Key Characteristics and Functions of a Retained Search Firm

Upfront Payment: The client pays a retainer fee at the beginning of the search process, which usually covers a portion of the overall fee. This payment structure reflects the firm’s commitment to dedicating significant resources to the search.

Exclusive Agreement: Retained search firms typically operate on an exclusive basis, meaning they are the only firm working on that particular search for the client. This exclusivity allows for a more thorough and focused search effort.

Senior-Level Positions: These firms specialize in filling high-value positions such as C-suite executives, management roles, revenue generation (sales) and other critical leadership positions. The complexity and importance of these roles often require the specialized services that retained firms provide.

Comprehensive Search Process: The firm collaborates with the client to formulate the search process, build a timeline, institute feedback mechanisms, and schedule status updates throughout.

Consultative Approach: Retained search firms often provide additional services beyond candidate identification, such as assisting with job description formulation, offering market insights, and helping with the negotiation process.

Candidate Quality: Because of the focused and in-depth nature of their work, retained search firms typically present a smaller, more highly qualified pool of candidates who are better matched to the client’s needs.

Confidentiality: Given the high stakes of senior-level hires, retained search firms ensure a high level of confidentiality throughout the search process to protect both the client and the candidates.

In summary, a retained search firm offers a highly specialized, dedicated, and consultative recruitment service, tailored for specialized, critical, executive, and senior-level positions, with a payment structure that ensures commitment and quality throughout the search process.


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