Search Options
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Fundamentally, there are four different search options. It is not necessarily that one of the options is better than another. Rather, it is a question of which approach will best serve the client’s interest. This should be determined by the client and the recruiter. That is why it is critical to fully understand and consider all the options - non-exclusive contingency, exclusive contingency, engagement fee, and retained searches. A brief description follows:
NON-EXCLUSIVE CONTINGENCY
In this relationship, the client only receives a measured response from each recruiter. Because there is no mutual commitment, each recruiter has to work the job on a “time/resource available” basis. Each order must be balanced against all the other orders currently available to the recruiter. This type of relationship generally does not lend itself to a strong drill down approach to penetrating the talent pool. Also, because the relationship is non-exclusive, the candidates surfaced can be and will be presented to more than one client. In this relationship, both the client and the recruiter must take a quantitative approach insuring that the numbers work in their favor. From the client’s perspective, this may be an acceptable approach to the open position. This is of low priority to the organization and the timing for hiring is not important.
EXCLUSIVE CONTINGENCY
This relationship is based on a signed exclusive agreement between the recruiter and the client. This agreement defines the exclusive nature of the relationship and the both parties to a specific time frame. The recruiter must deliver results within a defined period of time. Penetration of the talent pool by the recruiter is much greater. However, the client does not own the product of the search, i.e. the candidates. The recruiter is free to present these candidates to other clients. As far as internal candidates, walk-ins, referrals, or any other candidates are concerned, they undergo the same process with the recruiter as sourced candidates. In this manner, the client is properly positioned to compare “apples to apples”. Since all candidates are processed in the same manner, an unbiased decision can be reached without compromising the results through an alteration of the process. From the client’s perspective, this relationship is effective if they place a higher priority on the position, and if timing is important for filling the position.
Regarding the time frame reflected in this type of agreement, it generally ranges from 30 to 90 days. Perhaps the best cmparison for this type of an agreement is the standard real estate contract, which gives the listing agent an exclusive period of time in which to sell the property. During this period of exclusivity, they are legally entitled to their commission regardless of who sells the property and regardless of the source of the buyer.
ENGAGEMENT FEE
This relationship combines retainer with contingency. The client signs an exclusive agreement with the recruiter and pays a predetermined portion of the estimated or agreed upon fee up front. The initial engagement fee is 33% of the anticipated fee. The remainder of the fee is paid by the client upon the successful completion of the search and the hiring of a suitable candidate. Although the relationship is exclusive, the payment of the majority of the fee is still contingent on the recruiter’s performance.
The engagement fee relationship is designed to capture the recruiter’s attention and thereby secure for the client a greater level of commitment and resource allocation. This is most appropriate when the client places a great priority on the position and where timing in filling the position is critical.
RETAINED SEARCH
In this relationship, the client pays the recruiter’s fee in three installments or retainers. The search begins when the client signs the exclusive retainer agreement and pays the initial retainer. The payment of the two remaining retainers is generally tied to specific time lines or performance outcomes. The client must be convinced that the recruiter can source and recruit qualified candidates, properly orchestrate an effective process for delivering the candidates, while helping to ensure that the hiring decision is not compromised by a strong mutual commitment between the client and the recruiter. The client has greater control of the process and owns the product of the recruiter’s efforts, i.e. the candidates. The recruiter is not at the liberty to present the candidates to other companies until their client either fills the position or releases the by stating “no interest”.
In order to justify this level of relationship, the client must place the highest priority on the position, while requiring no margin for error in their timing or evaluation processes.
Wyse Associates
860 675 7802