If you’re thinking of hiring a recruiting agency, you’re probably comparing the different recruiting models they might use and the staffing agreements you might enter into. One of the terms you’ve probably come across is retained search. What is retained search, exactly, and how does it compare to other recruiting solutions?
Here, we’ll discuss the benefits of retained search agreements and help you decide whether it’s the right fit to find the perfect hire you’re looking for.
What Is Retained Search?
A retained search agreement, also called an executive search agreement or retained recruitment, is a personalized, high-touch recruitment model often used to source and hire for executive-level and highly niche roles. Its term originates from the retainer, or fee, that is paid by the company upfront to retain the firm for the duration of the search.
In a retained search, a team of recruiters works closely with your company’s leadership team, HR department and other stakeholders like the board of directors to gain a deep understanding of the qualities needed in the right candidate.
The staffing team looks not only at skills, but at the culture of the organization, the goals the company is looking to achieve, and the other team members the right candidate will need to collaborate with successfully. They use advanced assessment tools to narrow down a highly select pool of candidates, presenting only the very best handful of applicants to the client for consideration.
While retained recruitment comes with a greater up-front cost to the client, it’s easily offset by the financial benefits 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. Making the wrong hire for such an important role, on the other hand, can drag down the entire organization and, in the worst case, cause its downfall.
How Do Retained Search Firms Get Paid?
As we mentioned, in a retained search agreement a fee is paid upfront to secure the staffing firm and launch the search. This fee is paid by the company that’s doing the hiring and is typically quantified as a percentage of the hire’s total annual compensation during their first year on the job.
So, if the company was offering a starting salary of $100,000 for a role, the staffing agency might charge a fee of 25% of that amount, of $25,000. In some industries, it’s common to include bonuses and commissions when calculating the annual salary.
A portion of the fee is always paid by the client upfront, but some firms prefer to invoice the balance at the conclusion of the contract. This allows for adjustments, like if the advertised salary is $100,000 but the candidate negotiates the starting salary to $110,000. The retainer would be adjusted accordingly.
Benefits of Working with A Retained Search Firm
All staffing partnerships should come with some level 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 clients, 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 investment in the search, which allows all parties to operate in good faith putting their highest efforts into finding the right candidate.
The most effective staffing partnerships are those in which the staffing firm acts as an extension of the company, operating with its interests and motivations at heart. Retained recruitment is the perfect environment for developing such a relationship.
In the course of their close collaboration with the client, recruiters are able to get a very clear picture of the company’s needs, objectives and values, which are the driving factors behind the search. This deep knowledge can be leveraged not only in the search at hand, but in future staffing engagements for lower-level and high-volume positions where such context is equally valuable.
In this way, you can develop a relationship that fulfills your staffing needs for years to come, helping you assemble a top-notch team one position after another.
Keeps Your Search Discreet
For most open positions, it pays to cast a broad net and spread the word far and wide that you’re looking to hire. But this isn’t always the case for high-stakes roles like executive-level positions.
For starters, many candidates at this level would prefer not to let others know they’re looking for new opportunities. They might be unwilling to talk directly with a competitor of their current organization or may even have a contract in place 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 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 retained search firm ensures your search remains private and minimizes the risk of sensitive company information falling into the wrong hands.
Shows the Candidate That You’re Serious
Top talent is inundated with inquiries from recruiters hoping to connect, so much so that many simply 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 make contact with top candidates you might not be able to reach through standard sourcing methods.
Offers Access to Hard-to-Reach 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 a retained recruiting firm helps you connect with these and other hard-to-reach candidates who aren’t openly advertising that they’re job searching or who may not have even considered it yet, but would be open to hearing about the opportunity.
Retained search firms spend years making inroads in their respective industries, earning the trust of candidates 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.
In the recruiting world, retained search is usually contracted against what’s called a contingent search. In a contingent search, a recruiter is paid contingent upon one of their candidates getting hired for the job.
Sometimes, this type of agreement works well for entry-level and high-volume positions where the primary focus is on getting someone in the role quickly. However, it can lead to recruiters simply passing along as many resumes as possible hoping one will get picked, or worse, multiple recruiters contacting the same candidate about a single opening. Both of these things can make your company look unprofessional in the eyes of a top-tier candidate.
Retained search agreements come with exclusivity, which means the firm you’ve retained is the only one working on the search. This eliminates duplicate contacts from multiple recruiters and ensures your company is presented in the best possible light in front of the candidate.
Comes With Specialized Expertise
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 search.
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 in the field—when you call, us you’ll always receive a call back quickly. We’ve placed more than 5,000 candidates over more than a decade in business, 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.