CSI Executive Search: Retained, Retingency, & Contingency Searches
At CSI we engage in both professional and executive level
search assignments. Professional candidates are typically identified by a
high level of academic and/or experiential training but who may or may not be
required to occupy a management role in their respective positions.
Executives, on the other hand, direct the execution of their assigned business
units and have the responsibility for overseeing personnel and activities
within these organizational structures.
Retained Search
In the recruiting industry searches are typically conducted
using retained, retingency ("container"), and contingency search models. The importance
of knowing the difference between these approaches could be likened to the importance of understanding the
differences between a general accountant, a tax accountant, and a controller. All three may get the job
done, but each serves a unique value-added role in the application of his or her skills in their particular industry. These differences must be
appreciated to understand when the services of one may be sufficient for a
given need and when further expertise may be required. CSI Executive
Search engages in retained, contingency, and “retingency / container” searches.
A retained search is preferable in cases where a company has
a pressing executive level need that requires a candidate who will hold key
leadership responsibilities and whose services are integral to overall
organizational success. Given the strategic importance of these
positions, there is often a degree of urgency, and often confidentiality, that accompanies this type of
search.
CSI takes great care in working with a client company to
formulate a clear and objective outcome driven job description.
Furthermore, using collaboratively derived criteria, CSI carefully identifies
and screens potential candidates based on their interpersonal styles,
attributes, and work histories in order to insure the greatest potential for
“culture fit” and positive organizational impact. CSI also offers
additional profiling resources using industry specific and validated objective
testing instruments should this be a desired service by a client company.
The fees for a retained search are typically higher than in
contingency assignments, usually 30-33% of the candidate’s first year’s annual
compensation, given the level of energy and resources that a search firm
invests in sourcing quality candidates. These fees are usually paid out
over three set time periods (usually at the beginning, at 45, and then again at
90 days) as previously established “deliverables” occur.
The advantages of a retained search are significant.
First, retained searches take precedence over contingency assignments due to
the mutual commitments that are involved in the search process. A client
company is essentially securing a commitment from the search firm to prioritize
the search. Search firms prioritize such searches by dedicating a team of
sourcing professionals to the project, setting target dates for specified
deliverables, use direct deep network sourcing, and giving the client company
the right of first refusal until they determine that they have no additional
interest in the candidate. Finally, initiating a retain search allows
potential candidates to see how serious the hiring company is about filling the
position, therefore giving credibility and legitimacy to the search firms
consultants when discussing this position with potential applicants.
Contingency Search
A contingency search by definition means that the search
firm will only collect a fee if they find and place a suitable candidate for
the position in question. This type of search may or may not be
structured contractually with the client company and it is 100% “back end”
loaded. Therefore, regardless of the number of qualified candidates
presented, if none are ultimately hired, the search firm in question earns
nothing. A strict contingency search means that there is no exclusivity
to the arrangement and therefore the client company is free to use other search
firms or source other candidates on their own. This arrangement begs the
question as to whether the search firm actually has such a “client” given the
absence of any stated or written commitments for exclusivity. It also
explains why contingency searches are often given less energy by recruiting professionals
because of the increased risk of no return on invested energy and resources.
In a contingent search, the search process is usually less
structured and less about a precise candidate “fit” and more about getting
potentially qualified candidates in front of the client so that the client can
make his or her own final assessment. Often candidates in such searches
are drawn from a search firm’s existing database or from public job
boards. While these methods can certainly uncover good candidates, such approaches
leave a vast pool of talented passive candidates untapped. With less time
spent on securing a clear job description and the candidate sourcing methods
that are often employed in a contingency search, the chance of a
candidate/client mismatch is significantly increased. Many good
candidates get hired for the wrong reasons and therefore care should be
exercised when embarking on a contingency search to in sure that there is a
well-defined job description clearly communicated to and understood by the
recruiter conducting the search. Fees for contingency search usually
average around 25%, although this varies widely depending on geographic
location being sourced, the industry and specific talent being recruited,
and the number of positions being filled.
Retingency / Container Search
A retingency search offers several benefits to both the
client company and the search firm in that many of the strengths of the
retained search model can be captured while at the same time reducing the
financial risks for both parties. In a retingency search, the fee is
typically divided into two parts. The first part ("container") is paid at the beginning of
the search and is typically one fourth of the anticipated search fee. The
last part (remaining three fourths of the search fee) is paid when the search
has been successfully completed. While a client company will not
get all the benefits of a retained search using this model the results are
usually more satisfactory than a straight contingency search. CSI offers customized
services for specialized search assignments tailored to the needs of individual
companies. Please contact us for further information.
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