As a company seeking to employ the best talent, you may find yourself weighing various recruiting models and agreements. Among these, you’ve likely encountered the term “retained search.” But what exactly does retained search mean, and how does it measure up against other recruitment solutions?
Here, we’ll explore the benefits of retained search agreements and help you decide whether it’s the right fit to secure the ideal hire.
What is a Retained Search?
A retained search agreement, also called an executive search agreement or retained recruitment, is a personalized, high-touch recruitment model predominately used to source and hire for executive-level and specialized roles. The term “retained” arises from the initial retainer fee that ensures the dedicated engagement of the recruitment firm for the entire search duration.
In a retained search, professional recruiters, or headhunters, partner with your company’s leadership team, HR department, and other stakeholders, like the board of directors, to understand the qualities needed in the right candidate.
The recruiting team evaluates more than just skills; they consider the organization’s culture, its strategic goals, and the team dynamics the ideal candidate would need to integrate with. They use advanced assessment tools to narrow down a select pool of candidates, presenting only the very best prospects for client consideration.
While retained recruitment comes with an up-front cost to the client, it’s easily offset by the financial gains the right candidate can bring to the organization over the long term. An effective new hire can drive innovation, increase revenue, and lead the company into the next phase of success. Conversely, making a poor hiring decision for a pivotal role can negatively impact the organization and, in extreme cases, lead to its failure.
How are Retained Search Firms Compensated?
Under a retained search agreement, a fee is paid upfront to initiate the search process. The fee, covered by the hiring company, is usually calculated as a percentage of the prospective hire’s total annual compensation during their first year of employment.
For instance, if a company offers a starting salary of $100,000 for a role, the search firm may charge a fee of 25%, or $25,000. In some industries, bonuses, and commissions are also included when determining the annual salary.
The client pays a portion of the fee upfront, with the balance invoiced at the end of the contract. This structure accommodates possible adjustments, like if the advertised salary is $100,000, but the candidate negotiates it up to $110,000. In such cases, the remaining payment due would be revised accordingly.
Benefits of Working with a Retained Search Firm
All recruiting relationships should come with some degree of personalization, but retained search agreements offer the ultimate tailored experience. Since the search is more rigorous, the firm typically takes on a more limited number of job openings, allowing them to focus more intimately on your search and keep you closely informed of its progress.
Furthermore, your up-front retainer demonstrates a high level of commitment to the search, which allows all parties to confidently put forth their efforts into the successful placement of the right candidate.
Effective staffing partnerships resemble an extension of your company, aligning seamlessly with its interests and motivations. Retained recruitment is the perfect environment for developing such a relationship.
Through their close collaboration with your company, recruiters gain a comprehensive understanding of your needs, objectives, and values – the driving forces behind the search. This invaluable insight can be used for the current search and future staffing requirements across different levels where a similar context is crucial.
Discreet search process
For most open positions, it pays to cast a broad net and spread the word that you’re looking to hire far and wide. But this isn’t always the case for high-stakes roles like executive-level positions.
Many candidates at this level often prefer not to let others know they’re looking for new opportunities. They might be unwilling to speak directly with a competitor of their current organization or may even have a contract that prevents it. In such a situation, the search firm serves as a neutral intermediary, making the introduction with the candidate and subtly gauging their interest in the position in a delicate manner.
The need for discretion goes the other way, too. Often as a company, you don’t want to make it widely known that you’re looking to fill such a high-level position or that a vacancy on your leadership team is imminent. Working with a recruiting firm on a retainer ensures your search remains private and minimizes the risk of sensitive company information falling into the wrong hands.
Conveys serious intent
Top talent is inundated with inquiries from recruiters hoping to connect, so much so that many ignore cold emails and connection requests on LinkedIn. A retained search, however, utilizes more nuanced sourcing techniques that differ from those in a run-of-the-mill job search.
The more personal, one-on-one process demonstrates to candidates that you’re serious and that their resume isn’t just one in a stack of hundreds you’re reviewing. This can put you in a better position to engage top candidates you might not be able to reach through standard sourcing methods.
Access to passive talent
According to a LinkedIn Hiring Solutions report, 70% of the global workforce consists of passive candidates—candidates who aren’t actively looking for a new job. And yet, these workers are often high performers who would make excellent candidates for the executive position you’re looking to fill.
Working with an executive search firm helps you connect with these and other hard-to-reach candidates who aren’t openly advertising that they’re job searching or may not have even considered it yet, but would be open to hearing about a new opportunity.
Retained search firms spend years making inroads in their respective industries, earning candidates’ trust, and building professional rapport. These relationships give them the standing to bring forth your opportunity and make a recommendation about working for your company that candidates will give thoughtful consideration to.
Retained search, unlike contingent search, where payment is based on successful placement, ensures that your chosen firm is the only one conducting the search. This prevents the potential embarrassment of multiple recruiters contacting the same candidate and ensures your company is presented in the best light.
When you work with a retained search team, you’re not only gaining access to their executive headhunting skills but their recruiting expertise. In your close working relationship, the right retained recruiting partner will function almost as a consultant, providing you with helpful insights and feedback honed through years of experience that will sharpen your hiring strategy.
A good retained search firm will ask you the right questions, prompting discussions that get to the heart of what you’re looking for in the perfect candidate. They’ll help guide your thinking around the necessary skills and characteristics and potentially point out things you may not have considered that will aid you in identifying the perfect fit.
Entrust Your Search to the Retained Recruitment Experts
Your leadership team is one of your company’s greatest assets. The roles on this team are too important to leave to chance or guesswork. To fill your next executive-level or niche role, turn to the retained search professionals at 4 Corner Resources.
Our focus is always on quality over quantity, so we accept fewer requisitions to give greater attention to every placement. We pride ourselves on being the most responsive and accurate in the industry, with a history of success to prove it. We’ve placed more than 15,000 candidates since 2006, and our reputation for results has earned us a 92% client retention rate.
Start your retained search with 4CR today by scheduling your complimentary consultation now.