When To Consider Retained & Engaged Recruiting Services

A key business fundamental is balancing risk vs. reward. A lot of times this means getting as much as possible with minimal costs. After all, the less you pay for something, the more you profit.

Being a residential building products recruiter for 14+ years, I totally agree and get it. I don't like to work searches I think I can't close and I don't want to spend money up front to find a candidate if I don't know I am getting paid. But, sometimes you have to spend money to make money and it is no different in hiring.

If you have used a recruiter before, you know there are different levels of services – contingency, retained and engaged. If you aren't sure exactly what each is, read this.

But before we get to that, let's talk about recruiting in general.

Why You Should Consider Recruiters

Hiring is something many people view as a chore or a mystical process they don't really get. And, with good reason. Hiring poorly is very expensive. In a recently published paper, Fast Company found 41% of respondents said a low-quality candidate cost them at least $25,000 in the last 12 months.

So, if you have a position you are struggling to fill or you have made a few bad hires and must get it right, you should consider bringing in an expert.

Contingency vs. Retained vs. Engaged

Contingency search tends to be more frequently used. In this arrangement, a recruiter is given a role to be filled but they are not paid until someone they find is hired. In other words, if you hire from within or find your own person, a recruiter doesn't get paid.

Retained search means a recruiter is paid a fee to be at the beck and call of the client. Your retainer fee is calculated into the mix of the total fees you pay. The benefit is you have a bat phone to a recruiter. Typically the recruiter is paid a fee monthly or yearly and then paid another sum at the start of a search, another part at 45 days and the last amount after 90 days or if the position is filled.

Engaged search is a blend of both contingency and retained. A small fee is paid upfront to engage the recruiter's services. However, unlike with retained, the majority of the recruiter's fee is success based. The recruiter is only paid in full when a candidate they submit is hired.

Retained Search Makes Sense When….

  • You have multiple high-value roles to fill annually
  • Your company has many national searches annually
  • You need help finding key top executives
  • You desire a recruiter on call at your discretion
  • Your company wants a recruiter's full attention when you need it
  • Your openings tend to pay over $250K

Engaged Search Makes Sense When….

  • Your company frequently hires for middle management roles
  • You sometimes need the full focus of your recruiter but not always
  • Your roles pay between $70-250K
  • You aren't having success with contingency firms
  • You need a service that straddles between Contingency and Retained

The key to success with recruitment is to align the right type of search with the position that you want to fill. Generally, the higher profile the role, the more you should look at retained or engaged searches.



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