Contingency Recruitment VS Retained Recruitment

If you have not yet worked with a recruiter, headhunter, or executive search firm in the past, you may not be familiar with the differences between retained recruitment and contingency recruitment. A retained recruiter is paid for their services whether or not they are able to find candidates that you choose to hire, while a contingency recruiter is paid only if a candidate they present is hired. Often times, a retained recruiter will work in-house and on a company’s payroll, but there are also retained staffing firms and a contingency recruiter is working on a contingent contract basis. Sometimes retained recruiters hire contingency recruiters when they are experiencing difficulty filling positions. 

The employer is not obligated to pay a contingency recruiter, unless they are able to find a candidate you feel would make a great asset to your team. Sometimes employers feel more confident with contingency recruiters because they have to be thriving in order to operate on a contingency basis, since their income isn't consistent and they are only paid when they produce. Hiring a contingency recruiter is typically the most cost effective way to hire executives and fill those positions you have been unable to find the right candidate in the past.

Contingency recruiters are often flexible with their fees, and typically have a thorough understanding on the hiring process and how different types of companies in different industries operate. They are often known for their ability to attract passive candidates to meet an executive placement need, which widens the pool of high-quality candidates considerably. Contingency recruiters are also famous for being easy to negotiate with. They are often willing to adjust their fees and/or guarantee (if applicable) based on a company’s requirements. However, negotiating a lower fee could also lower the priority of your person and a recruiter would put less money and time into filling it, so you have to be careful.

Many Recruiters offer incentives for exclusive contracts, where the company agrees to work strictly with them on that specific position. Executive Recruiters and head hunters that operate on a contingency basis are a cost effective way to fill important rolls throughout your company. A contingency executive recruiter is paid upon performance and the employee if any that they are able to produce. A retained recruiter is paid for the time they put into the position they are working on. Both types of recruiters are typically professionals with experience in sourcing and screening the best candidates for the job. It is the employer who would conduct the in-person interview, and often the phone interview as well. It is the recruiters’ role to seek out those most qualified for the job. Contingency recruiters typically have the resources to source candidates local to you themselves, and with retained firms this is an expense you would cover yourself. Either way, working with a staffing agency is a smart alternative to finding your own candidate, since having a productive employee is arguably the most important operating structure in a company. Contingency recruiters are often hired for important executive positions, positions that are hard to fill, or positions that an employers in house corporate recruiter was unable to fill. Retained recruitment firms are commonly hired when a company has quite a few easy to fill positions.

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