| Executive Search Vs Contingency RecruitmentThe | | | | If you can convince your shortlisted panel of |
| lines between Executive retained search assignments | | | | candidates to sit such exams then they're a powerful |
| and contingency search have blurred in the UK, this | | | | value add for the end client but genuine top |
| article highlights the essential differences between | | | | performers will need to be very keen on the role and |
| the two business models and analyses the | | | | client company before they jump through such |
| weaknesses and strengths of each. | | | | qualification hoops. |
| Retained search | | | | Payment of fee: Traditionally paid in thirds. First |
| The client company agrees to work exclusively with | | | | one-third payment is due at signing of search |
| a search firm. | | | | agreement; next on presentation of shortlist and final |
| The search firm will typically advertise through print | | | | payment due thirty days after that. |
| and online media – Unlike contingency recruitment | | | | Fee: usually equal to 30-35% of the hiree's first annual |
| the clients identity and branding will be displayed. | | | | compensation. That includes bonuses, perks (such as |
| Print and media advertising in trade publications or | | | | cars, club memberships, etc.) and anything else that is |
| broadsheets are billed back to the client. | | | | considered part of the hiree's first year of |
| In addition to a media campaign the search firm will | | | | compensation. |
| carry out extensive research, analysing the | | | | Rebate, which is the search firms guarantee to the |
| marketplace, gathering feedback and putting | | | | client company generally begins at one year and |
| together a target list of potential candidates from | | | | extends sometimes two years and beyond - |
| industry reports, news sources, Linked In, networking | | | | depending on hiree level and prior agreements. |
| et al. | | | | Simply put the Search company will pay back a |
| The list is then whittled down, the potential | | | | percentage of their fee if the candidate leaves or |
| candidates negatively screened – informal | | | | doesn't work out during this timescale. |
| referencing, client company input play a big part here. | | | | |
| Once the shortlist is compiled and agreed with the | | | | Contingency searchContingency search is the industry |
| client the search firm will make discrete approaches | | | | standard, it's cheaper and quicker although offers non |
| to the candidates. | | | | of the guarantees that an executive search does. |
| This phone call is the traditional headhunting call, the | | | | In some cases the contingency recruiter may be just |
| part of the process familiar to executives across the | | | | as able as the ‘headhunter' and the real |
| world. First contact is often made at the candidates | | | | difference is in the business model. |
| place of work, a polite but direct approach will | | | | Often candidates are not interviewed in person |
| establish if that individual is open to having a further | | | | (almost 100% true for interim/contract type |
| in depth conversation outside of office hours. | | | | assignments, particularly within IT) and sent to the |
| This next conversation represents another cull and | | | | client blind. The client will then decide to interview or |
| candidates are disqualified according to the clients | | | | not depending on the individuals CV. |
| requirements – not senior enough, not technical | | | | Contingency recruiters do not charge a retainer fee |
| enough, too expensive etc. Equally many candidates | | | | and the client is only invoiced once the candidate |
| will disqualify themselves if not sufficiently interested. | | | | starts work. |
| Happy, successful executives while interested enough | | | | Non-exclusive which means the client organisation is |
| to take the call will rarely be looking to jump ship. | | | | free to advertise directly speak to other recruiters |
| This conversation represents a balancing act and | | | | and in fact often actively do so to encourage |
| different head hunters have different approaches but | | | | competition and ensure value for money. |
| the overall aim is to draw as much information from | | | | Many have formal or informal preferred supplier |
| the candidate and establish a match or disqualify | | | | agreements in place with several agencies who work |
| where appropriate. | | | | on a contingency basis trading limited exclusivity (2 |
| This is very much 1st date territory and no head | | | | 3 agencies, direct access to roles) for lower profit |
| hunter will want to give full disclosure at this stage | | | | margins. |
| – There are many reasons for this but chiefly | | | | The bulk of candidates submitted will come from |
| you're looking to control the process not end up in a | | | | online advertisements on job boards such as Monster, |
| yes/no scenario based on an individuals perception of | | | | Jobsite, total Jobs, and the searching of their online |
| your clients brand. In any industry the top firms and | | | | CV database. Many client companies now employ in |
| executive talent swims in a very small pool and | | | | house recruiters who scour these job boards. |
| water cooler gossip and brand reputation of a client | | | | Job boards themselves now market aggressively to |
| organisation or individual need to be carefully | | | | the end client reasoning that it would be a win win |
| managed. | | | | for any hiring company to cut out the recruiter |
| Pre conceived ideas about your clients brand can | | | | middleman and pointing out that for the large part |
| make for a difficult sell so be sure to make sure that | | | | recruiters are simply forwarding CV's readily available |
| there is a genuinely good match and that your clients | | | | to anyone with access to their database. |
| proposed role has sufficient weight to attract and | | | | A counter argument of course is that Job boards can |
| hold a candidates attention. e.g A small up and | | | | cost upwards of £2000 for a single months access |
| coming cash rich company may be able to offer | | | | and can not guarantee results – Clients pay |
| excellent prospects, be growing faster than all their | | | | agencies on results, job boards sell the promise of |
| competitors but if their brand currently holds all the | | | | results |
| cache value of a McJob the executives will walk | | | | Client rebate is generally up to around two months |
| away from that conversation the second you give | | | | but vary from company to company. |
| them the client name | | | | Costs are calculated as a fee equal to the hiree's first |
| Of course if you're lucky enough to be conducting a | | | | year of annual salary. Rarely are other compensatory |
| search for the top tier, big four, fortune 500 type | | | | benefits included such as bonuses, perks, etc. |
| company the brand will sell itself but bias exists here | | | | Public and Not-for-Profit: 15-20%. |
| but in reverse and there will often be a preference | | | | Private Sector 20-25%. |
| for executive talent coming from higher or at least | | | | In conclusion there is support for both business |
| top tier peer ranked organisations. Companies paying | | | | models, executive search may represent a more |
| for retained search in general do not ‘hire down' | | | | professional approach but it comes down to the |
| If there is merit for both parties to meet and discuss | | | | individual or the firm and many ‘executive search' |
| things further then a face to face meeting will | | | | firms now bill clients almost exclusively on a |
| normally take place outside of work hours – hotel | | | | contingency basis and for far less than the |
| lobbies are a favourite. At this stage the search | | | | industryaverage 30 – 35%. |
| consultant will disclose the client company and a far | | | | Equally many contingent recruiters have excellent |
| more detailed conversation will take place. | | | | networks and contacts and could carry out the same |
| Many modern day search firms and even contingency | | | | services as a headhunter for far less cost, in a |
| recruiters boast of being able to providing | | | | quicker timescale but would not back their candidates |
| psychometric testing – In reality a basic tool that | | | | with a two year rebate. It's this provision of |
| more often than not boxes people into four | | | | insurance that really marks the difference between |
| personality types through forced choice questions. | | | | contingency and executive search. |