Recruiting managers is a time consuming job that requires specialized skills. Senior executives cannot jump jobs like junior employees can. Therefore, it is not easy to get the managerial candidate you want. Companies are always snooping on each other, trying to sniff out product secrets and steal a corporate leader or two while they’re at it.

For all these reasons, organizations use independent executive recruiters to fill management positions. Corporate can use either a contingency recruiter or a retained executive search consultant. What are these and what is the difference between them?

Contingency recruiting companies are otherwise called employment agencies, staffing and manpower firms, personnel recruitment services and placement agencies. When we say contingency recruiting, what we essentially mean is that the fee that is paid to these agencies is conditional, or contingent, on the successful placement of the desired candidate. This form of recruitment works well for junior positions. Contingency recruiters are paid upon successful placement and therefore cannot afford to invest too much time on a single assignment. Contingency recruitment is usually a high volume business and they often serve direct competitors for the same positions. They get their candidates by sourcing as many resumes as possible using databases, job postings, and networking sites.

However, most senior management roles are filled using what’s called the retained executive search model. Retained search, or executive search, is a service that is retained for its specialized skills. A retained search company works exclusively on behalf of its client. These agencies work on a retainer fee and are paid the way skilled professions such as tax accountants, doctors and engineers are paid by organizations. They are required to invest time and energy in filling up senior positions. They source passive candidates who are not seeking a change in employment. These candidates are contacted by the retaining agency and a senior, experienced recruiter will speak personally to the candidates and slowly motivate them to join the company. This takes quite a bit of understanding of management policies and senior level responsibilities. That’s the reason that most retained recruiters either have several years of management recruiting experience, or used to be senior managers themselves.

There’s a third search model captures the strengths of the retained search model while reducing the financial risks for both parties. In this model, an engagement fee is divided into two parts, the first part that is paid at the beginning and the last part is paid when the search has been successfully completed. While this model does not offer all the benefits of a retained search, the results are usually more satisfactory than a contingency search. Both the company and the recruiter have some “skin in the game” and it provides assurances to both sides.

by:  Anjela Mangrum, CPC

Anjela Mangrum is the founder of Mangrum Career Solutions Inc.  MCS partners with industrial and machining manufacturing businesses to source and secure mid-to-upper level talent for operations, supply chain, and engineering positions.  They work to empower individual job seekers by helping them gain a competitive edge in their job search. For hiring needs contact Anjela at 513.753.3813 x101.

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