recruiters with retainersWhat most people don’t realize is that there are two different types of recruiters/headhunters out there. Recruiters work on either a Retained or a Contingency basis. What are the differences and how does it all affect you as a job seeker? This is my attempt at explaining how it works.

Retained:

Working on a retained basis means the recruiter will charge an upfront fee to the client to conduct a search. They will operate on an exclusive basis meaning the job will only be filled through this recruitment company. These recruiters work very closely with their client and will take their time and use an agreed methodology to find the best person for the job. The process is usually rigorous with a shortlist of anything from three to ten names being presented before interviews commence. In a perfect world, the retained recruiter will be able to present five candidates with the perfect skills, location, salary etc and all the client has to do is pick the one they like the most.

A retained recruitment assignment doesn’t come cheap, the client will expect to pay up to 50% of the projected first annual salary of the successful candidate. Companies will request a retained search when they are looking to fill a senior position and sometimes when all other cheaper search options have been exhausted.

Contingency:

Contingency search on the other hand is when the candidate is the bargaining chip. Contingency is sometimes described as No Win, No Fee (or even No Cure, No Pay). It is what it says on the tin, a service performed by a recruitment company for free until the day a candidate represented by them takes a position with their client. Recruiters working on this basis often have to compete with the client’s internal HR department, advertising, direct applicants and typically one or more other recruitment companies.

The trick here is to represent the best candidate or candidates and to do this faster than the other channels. 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.

Difference in methodology:

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. The contingency recruiter will be a lot quicker and most probably deliver more candidates in order to increase the odds of making a placement.

Another difference is that the retained recruiter has signed up to a service level, sometimes a retained search can be very difficult and these projects can be rather lengthy. The contingency recruiter will simply move on to another vacancy or client where they believe they can get an easier win.

Implications for you the candidate:

So what does this mean to you? If you are approached about a vacancy, ask the recruiter how they got the assignment and what the competition is. If you are dealing with a retained recruiter, you are more likely to get full briefings on the role, the interviews, a potential offer an so forth. Having said that, contingency recruiters tend to be more pro-active and have better sales skills – something that can certainly help you get the perfect job.

Related: How Agency Recruiters Can Use LinkedIn [Presentation Deck].

photo by: Victor1558

The original Undercover Recruiter, after 7 years in tech recruiting Jorgen now runs Link Humans, a social media agency in London.

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