I’ve been working on CFO search for a property casualty carrier client I’ve worked with for many years. The President of this company reached to me directly about the search and seeking my assistance. I collected the necessary information from the client and began my process of sourcing, screening and referring. One of the candidates I’ve been speaking with about the opportunity asked me, “Do you have this on a retained search or contingent?” My response back was, “This is a contingent search. Why do you ask?” The response back was, “Just wondering.”
Not the first time I’ve been asked this question naturally. And it is a good question. But I always pause and wonder, why do people ask? Does it make a difference to them? And if so...why? What would be the thought process where this would make any difference? Then I must always remind myself, oh right, there is this long standing perpetuation of the idea that somehow in some way the “retained” search has an elevated status. But why does this continue to exist?
I believe it continues to live on due largely to the retained firms fueling the perception of the retained search as being a more sophisticated search. Apparently retained only firms feel they must create this perception to justify or create a different class of recruiting. Who knows. But just for fun I did a quick internet search on retained verse contingent search and the first two hits were retained firms toting their service and dismissing the contingent service as for only clerical types of positions. They paint the picture of the retained recruiter being more experienced and the contingent recruiter typically inexperienced. Wow! How interesting. I’ve been recruiting for over 15 years and have been around the insurance industry for over 25 years. We work largely technical to executive. Rarely, rarely anything considered clerical.
I’d say I’m uniquely qualified to bring this to discussion as while we are traditionally largely contingency based we also do retained. We even have clients on a combination of retainer & contingency.
So what is the difference between contingency & retained?
Retainer firms receive a portion of their fee up front regardless of whether they present the candidate that is ultimately hired or not. The arrangement is exclusive between firm and client company. Contingency firms only receive a fee for their service if the client hires the person they refer. More often than not, contingency firms are hired on a non-exclusive basis.
The bottom line however is that there is no wrong and there is no right. One is not better over the other. They are simply just different. Not all retained searches are executive level. As not all contingent searches are clerical. We make a conscious choice to do most of our work on a contingent basis. We are set up to operate very effectively on a contingent basis. Our relationships with our clients make the arrangement work. The way we do business makes the arrangement work.
We are proof that contingency does not automatically equate to clerical. In fact I am on the board of a national insurance recruiting association and the majority of the members work contingency and they all work on technical to executive searches just like our firm.
While retained firms are able to put you on a shortlist of candidates, contingency firms can give you more exposure. So it is often a very personal decision based on your expectations out of the search process. If you are actively seeking opportunities the decision is clear, contingency. However, whomever you work with, one rule remains the same: Cultivate a long-lasting, give-and-take relationship with your recruiter and you may find the best prizes come to those who are patient.