All companies are in the business of securing the best possible talent. However, different types of recruiting techniques work for different companies. So, before you can even attempt to answer the question posed by this week’s blog title, it’s important we clearly define the difference between contingency and retained recruitment.
What is contingency recruitment?
Contingency recruitment, as its name implies, is when a recruitment company’s earnings are contingent upon whether or not you hire the candidate they have vetted and presented to you. As Jörgen Sundberg explains on TheUndercoverRecruiter.com, contingency recruiters generally must compete with other recruitment efforts such as the client’s HR department, advertising, direct applicants and other recruitment companies.
“The trick here is to represent the best candidate or candidates and to do this faster than the other channels,” he writes, “If for instance, the vacancy is hard to fill, chances are there will only be a few candidates out there qualified for the position. Getting to these before everyone else is vital for the successful no win, no fee recruiter.”
What is retained recruitment?
When you put a lawyer on a retainer, he/she is obligated to work on your case while drawing funds from the amount already paid in order to complete his/her tasks. A retained recruiter is similar in that he/she charges an upfront fee to his/her clients in order to conduct searches for talent. Unlike a contingency recruiter, a retained recruiter is given the exclusive role of locating new employees for his/her client.
“The process is usually rigorous with a shortlist of anything from three to ten names being presented before interviews commence,” informs Sundberg, “In a perfect world, the retained recruiter will be able to present five candidates with the ideal skills, location, salary, etc. and all the client has to do is pick the one they like the most.”
Which recruitment style would work best for your company?
As mentioned, contingency recruiters are only paid if a person they’ve found is hired. With this commissioned-based approach, it can be difficult to secure a new hire if a company has particularly restrictive guidelines about the type of talent it’s looking for.
While a contingency worker may never admit this, he/she is only willing to devote a certain amount of time to such recruitment efforts. It turns into a “if I find someone, I’ll call you” type of arrangement. It’s hard to argue this attitude considering you only get what you pay for…and clients don’t pay contingency recruiters anything until they’ve hired someone.
Retained recruiters, on the other hand, have been paid upfront. There is a clear understanding of how much time and effort will be put towards finding top performers.
“The retained recruiter takes their time to get things right using processes and agreed methodology, knowing they will eventually fill the position thanks to their exclusivity terms,” says Sundberg, “The contingency recruiter will be a lot quicker and most probably deliver more candidates to increase the odds of making a placement.”
For more expert recruitment advice, please don’t hesitate to contact Hire Value Inc. today!