It can be difficult for a hiring company to decide whether the services offered by executive search firms are necessary. However, with thousands of potential candidates competing for senior-level opportunities, executive search firms can be valuable partners in helping companies identify and attract top talent. Robby Smith, an Associate Consultant at Morgan Samuels, is one of the Executive Recruiters for the company. Ms. Smith has experience working on executive searches with both retained and contingency firms. Understanding the differences between Retained Search firms and Contingency firms is the first step to understanding their value and the best fit for your company’s needs.
“Retained executive search firms partner with the hiring company to really understand the strategic needs of the business and how the role will contribute to the future of the company. They seek out the most qualified talent that matches the specific needs for a particular role,” said Smith. Retained executive search firms are more likely to reach out into the market to recruit “passive candidates,” executives who are not actively looking for a new opportunity, but may be a strong fit for the role. Smith continued, “Contingency firms are more likely to rely on their database. They are likely to have a large pool of candidates in their database to shop around to several companies who have a broader and more open criteria or need.”
Contingency and retained search firms also have different business models. “Retained search firms are paid a retainer to source the best possible talent. They are typically the only firm engaged to fill the role and are paid for their services at the start. Contingency firms, on the other hand, are only paid after upon placement and may be competing with several other firms in the market.” Retained Search firms and contingency firms also differ in terms of the advantages they provide.
“The advantage of retained search is that by partnering with the firm, the company has a greater chance of finding the best candidate in the market, who possesses the specific requirements for the role,” said Smith. “The level of the talent and the loyalty of the candidate significantly increase when they are paired with a search firm that tries to match stated requirements, like educational background and work experience, with candidates in an existing database.”
The way that candidates are found also varies between retained search firms and contingency firms. According to Smith, in most cases with contingency firms, the candidates approach the firm, especially if it is a reputable agency. Retained search firms really seek out the best specific talent in the market. They reach out to candidates with specific skills and backgrounds per the client’s request.
The use of Executive Recruiters through both retained search firms and contingency firms can benefit any company. Whether searching for senior-level executive placements or mid-level executive placements, Executive Recruiters can provide value.
‘For higher level placements, including C-level, it is beneficial to use a retained search firm, because there tends to be a very small selection of candidates who possess the specific skills and experience the client is looking for,” said Smith. “Whereas contingency firms are more appropriate when the needs are not as specific and there is a large pool of qualified candidates in the market.” Smith believes that both types of executive search firms are beneficial and can serve as extensions of the client’s Human Resources department. Both types of firms provide the most value when they are viewed as partners to the HR department, working together hip to find the best possible talent, based on a company’s needs and the available talent in the market.
For more information on retained search firms, how they work, and how executive recruiters can add value to your hiring process, contact Morgan Samuels, one of the top executive search firms in the industry.