By now, you probably realise there are 2 types of recruitment, retained and contingent.
Below is a table setting out the advantages of retained and contingent recruitment.
It is easy to access to candidates on job boards or LinkedIn but the more senior, higher quality candidates may not be on these forums. The very top performers will not be looking for a new position. There is approximately 75% of individuals (passive candidates) who will not be found in this way and they will be the ones who have the right experience, skills, cultural fit and are currently top performers in their current role.
Executive Search consultancies have an extensive network which they can use to identify both active and passive candidates and widen the reach.
A bad hire is a costly mistake, not only does it cost you 2.5 times the annual salary of the bad hire it also causes reputational damage. An Executive Search Consultant will work with you to find the perfect fit for your company and take the risk out of hiring the wrong person.
When you work with an Executive Search Agency you enter into a partnership and will work with you to help you understand and scope out the role in order to identify the best fit for your company. The Executive Search Consultant will prepare a Candidate Specification which is designed to show your company in the best light and encourage the top talent to join your company. You will benefit from valuable market insight including salary benchmarking and at the end of the search process will have an enviable knowledge of your sector.
By using the services of an Executive Search Consultancy you save valuable time as the consultancy will streamline the hiring process for you and handle all the details including setting up interview days, benchmarking candidates against your brief and ruling out any time wasters. You will be provided with a timeline at the start of the process and your involvement will be minimal until the interview stage. You will know exactly how much time you need to set aside for interviews in advance and you can be assured that this will be the best use of your time.
When you engage the services of an executive search consultancy you save time and money by being able to concentrate on the day job. Although you may be wary of the upfront costs of a retained search, it is extremely cost effective. You save money on marketing, screening and interviewing unsuitable candidates and you take the risk out of making the wrong hire. You also have the advantage of an expert in your market advising you of an attractive salary package for your new employee, a salary package that suits both you and the candidate.
Through the executive search process you will gain market intelligence which is invaluable. At that snapshot in time you are an expert in your sector.
The use of an executive search consultancy will give you an advantage over your competitors as when you hire the top talent in your sector, one of your competitors loses out! Also by partnering with a leading executive search consultancy in your sector, through the off-limits agreement you have in place you are protecting your staff from being headhunted.
Executive Search is perfect when you wish to recruit for a new role or new proposition without anyone knowing. The role will not be advertised and those individuals contacted will not be given your name or details and only when they have registered an interest will the details be divulged. All details can be kept secret by the use of a Non-Disclosure Agreement, if required.
An Executive Search Consultancy works enters into an agreement with you to guarantee the placement of a successful candidate. The Consultancy will continue to work on your assignment until the role is filled. They are working for you exclusively on your role.
Passive candidates are more likely to stay in a role than active candidates. 86% of our candidates are still in post 5 years on.
Your Executive Search Consultancy is able to provide you with a balanced shortlist. In the Hampton-Alexander Report (2018) that the Executive Search community was praised for being ‘major drivers of progress’ in helping boards achieve gender balance.
All forms of recruitment have their drawbacks and it is the same with Executive Search. It is the most expensive of all forms of recruitment (some companies charge 33%).
Another problem is that all Retained Executive Search firms will have ‘off-limits’ companies and the larger the firm, the more off-limits companies there will be. The benefits of using a search consultancy is the fact that they will grow to understand the strategy, culture and leadership of their clients. As a result of this, search firms agree to not recruit talent from their clients and enter into an ‘off-limits agreement’ with them.
Another potential problem is that delivering this type of service takes time. It is likely to take 6 weeks to get to the shortlist stage. The research and approach stages are lengthy processes when done well and you are looking at several days work.
Although the costs of retained and contingent recruitment are very similar, the main difference is the payment structure. There are no up-front costs with contingent recruitment. Contingent agencies operate on a ‘no placement, no fee’ basis.
If there are plenty of candidates on the market and there are no skills shortages then contingent recruitment can be very quick. Active candidates are on the look out for a new role and will be available for interview at short notice.
Contingent recruitment Agencies operate well if you are seeking a Junior or non-specialist role as they will be able to fill your role quickly and offer good value for money.
A Contingent Recruitment Agency is not working exclusively for you and will not provide you with candidates exclusively so there is a risk that you could lose out to your competitors.
If candidates are in short supply, you will be in a race to land a candidate and get ahead of the competition.
Contingent Recruiters will only provide you with active candidates, those candidates who are actively seeking a new role. At any one time it is estimated that 25% of the workforce are seeking a new role. You will not have access to the other 75% of the market.
It is acknowledged that the quality of candidates (active candidates) from a contingent assignment will not be as high quality as a headhunted candidate who is performing well in their current company and not looking for a move.