Retained, Retingency and Contingency Searches

In the recruiting industry searches are typically conducted using retained, retingency (“container”), and contingency search models.  Understanding the differences between these models is critical in determining which level of service is needed for a particular search.

Retained Search

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/or confidentiality that accompanies this type of search.  Retained searches are given priority status in terms of the level of consulting talent assigned to conduct the search and the time and resources that are dedicated to the project.

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 searches by dedicating a team of sourcing professionals to the project, setting target dates for specified deliverables, use direct deep-channel sourcing, and giving the client company the right of first refusal of sourced candidates.  Second, initiating a retained search allows potential candidates to see how serious the hiring company is about filling the position, therefore giving credibility and legitimacy to the search firm’s consultants when discussing this position with potential applicants.

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 third of the anticipated search fee.  The last part (remaining two thirds 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.

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 ensure 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.

Client Request for Services: Let CSI Executive Search know of an opening or openings of strategic importance to your organization by submitting a CLIENT REQUEST FOR SERVICES. Or, give us a call at 877.329.1825.