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Contingency vs. Retained Executive search firms |
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There are two types of recruitment firms: contingency firms and retained firms. It is advisable to know which type of firm you are dealing with as it has an impact on how the firm works with clients and candidates. - Contingency search firms earn their fees only when the client company makes a hire through them. A contingency firm has no assurance of being paid, as clients often will have a number of such firms working on the same job assignment. As a result, a contingency search firm cannot afford to invest a great deal of time working on any particular assignment as the outcome may depend on factors beyond their control. Contingency search firms generally work on a large number of job openings and will send as many candidate resumes as possible, as quickly as possible, to clients for potential interviews. Working in a competitive environment, the contingency search firm process is geared towards identifying quantities of potential candidates for a given job opening. As a contingency recruiter usually does not have an exclusive assignment and is in a race against other sources to present potential candidates, they will often present attractive candidates to as many clients as possible.
- Retained search firms are hired by the client company to conduct a dedicated search process on their behalf. They are paid, in part, in advance and generally either in additional installments throughout the process or at the conclusion of the search process. Clients engage retained search firms when it is critical that they hire not just any qualified person, but the most qualified person available in the marketplace. They look to their search/recruitment partner to conduct in-depth industry research, identify, recruit and assess the highest potential candidates - taking into consideration not only the basic job requirements but also - the organization's culture and other critical issues related to the job vacancy.
Neither contingency nor retained search firms accept fees from individuals for the purpose of helping them find a job. Contingency search firms are inclined to “market” attractive candidates to several potential clients at the same time. Retained search firms are not motivated to “sell” candidates in this manner – they are being paid for the process of selecting the best candidates for a position and their objectivity in assessing whether a particular individual is the right choice. |