Contingency vs. Retainer: The Real Difference in Executive Recruiters

Posted by SRA Admin on Jun 2 2015

Comparing Executive Recruiters

There are many reasons to engage the services of executive recruiters. The most obvious reason, of course, is that you are seeking to fill an executive position and internal options have not been successful. But how do you know whether to hire a recruiter who works on a contingency basis or one who works on retainer? Keep reading to find out the many differences that separate these types of executive recruiters and how to choose the one that will work best for you.

The Basic Difference

At its most basic level, the difference between these two types of recruiters is easy to understand. A contingency recruiter does not get paid until you hire one of their candidates. The other recruitment compensation model is a recruiter or firm that works on retainer. That means they will work to find you the best candidate to fill your position, but they are paid whether or not they succeed.

The Human Difference

Ultimately, recruiting at the executive level - or indeed at any level - is about people. The recruiter's job is to connect the right candidate to the right team. But the way in which contingency and retainer recruiters go about making those connections can be wildly different. Because a contingency recruiter is only paid when they find you a candidate, it is in their best interest to show you as many people as possible, casting a wide net and hoping something sticks. This can put a lot of the onus on a client to sort through the presented candidates.

Recruiters on retainer, on the other hand, know they will be paid and therefore can take the time to sift through potential executive candidates themselves and only present a choice few that have a chance of being a perfect fit. Because they can allow themselves more time to vet candidates rather than rushing to send over as many as possible, they can really get to know the human being behind the resume and better determine his or her suitability for the role.

The Relationship Difference

Building relationships with candidates is certainly important, but it is also important for a recruiter to have a good relationship with his or her clients. Executive recruiters who work on retainer have a good reason to develop great client relationships: they want to be the go-to firm for every executive opening. When executive recruiters are able to offer up great candidates time and again, they will have more business and more time to get to know a company and their needs.

A contingency recruiter may or may not take the time to develop a good relationship with a client. Typically, this type of sales-based role will need to be searching for candidates for a range of clients because there is never any guarantee of a paycheck. This can mean less attention is paid to any individual client in the interest of getting through as many as possible. 

The Big Picture Difference

So which type of recruiter should you aim to work with the next time you need a new executive? That really depends.

The truth is that while recruiters working on retainer have many advantages, there are some situations where a company might want to choose a contingency recruiter. They often work faster and offer up more candidates. This can be particularly beneficial when searching to fill a lower level role and less effective in executive recruitment.

While every search firm is different, overall executive recruiters that work on a retainer basis can provide better candidates and better long-term relationships than those who are simply bent on filling a position as fast as possible so that they can cash their contingency paycheck.

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Topics: executive recruiters, recruiters

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