The Top Four Myths About Retained SearchFeb 08, 2022
Most things in life are subject to myths…things widely believed but simply not true. Why would retained search be any different? What’s challenging about identifying myths is that sometimes they were once true. Unfortunately, there’s no “Recruiter’s Society of Myth-busting” in existence to send you a memo when a new industry myth has been busted. You can end up holding onto your old, inaccurate beliefs indefinitely.
Such is the case with companies working with recruiting firms on a retained basis. I started in the recruiting industry in 1992 as a contingency recruiter. At that time, retained search was a different game played by “big name” retained search firms. It mainly applied to executive searches with large companies. Almost everything about the recruiting industry has changed dramatically since then. With these changes, contingency recruiting does not work as well as it once did for both recruiters and clients.
As a result, what’s emerged and gained momentum is a new way of working that’s usually better for both recruiters and clients. In this model, recruiting firms are treated like other professional service providers. They receive an upfront deposit to retain their services. This initial deposit is also called an engagement fee or Container (a hybrid of contingency and retainer). When the recruiting firm places a candidate, they receive a “success fee,” which is the agreed-upon fee minus the upfront retainer.
With the above explanation in mind, let’s debunk the top four myths about retained search.
Myth 1: Most companies will only work contingency. The truth is that some companies will only work contingency. Many companies are unhappy with the contingency results and need to be educated on why retained search is better for them.
Myth 2: Retained search only applies to high-level positions. The truth is that companies pay recruiters retainers for all job levels when they believe it’s in their best interest. The job of the recruiting firm is to help their prospects and clients understand why it’s in their best interest. The game changes for you and your clients when you learn how to do this.
Myth 3: Companies prefer contingency because they only pay a fee if a recruiter is successful. The truth is that many companies prefer to work with a committed search partner, and they know that contingency recruiters aren’t truly committed. Your clients know that they wouldn’t be committed if they worked on contingency, so they’re skeptical that you would be. Why would you?
Myth 4: If a company pays a fee and you don’t fill the position, that will ruin your relationship. The truth is that if the recruiter sets realistic expectations on each party’s role in filling the position, reasonable clients won’t blame you if you carried out your role correctly. If you performed your job properly, you'd have data on what’s getting in the way of filling the position. When you share this data, reasonable clients will shift specs, pay, or other problems based on this data. Let’s face it; unreasonable clients often blame the recruiters when contingency searches fail too.
If you work on contingency, I invite you to reflect on these myths and ask yourself if that’s staying where you are is what you want to do in the future. If you’d like to consider shifting from contingency to retained, feel free to review a recruiter training resource to make this shift quickly and effectively by clicking here: Moving From Contingency To Retained.