Retained and Contingency Search: Everything Clients Should Know

free applicant tracking systemRecruiters may offer you retained or contingency search services and you may neither know what these terms mean nor understand which of them is best for your business. Contingency search contracts look particularly appealing on the surface because they cost less and typically provide a larger number of candidates from which to choose, and if you don’t realize the importance of a retained search in certain circumstances, you may make a serious recruiting mistake. If your small business needs help searching for new talent in 2017, be sure to start using Recruiteze. Our powerful free applicant tracking system will save you time, money, and will help you land the top candidates for your job openings. Click here to start using our free online recruiting system today.

Retained Search VS Contingency Search

A contingency search is a contract with a recruiter which allows them to provide you with many potential candidates for a position, and you pay them only when you hire one or more of their candidates.

A retained search is a contract with a recruiter where you pay them in advance, hence the word retained, to invest a deeper level of focus to find the most qualified candidate(s) for your business.

What Contingency Has To Offer

Contingency is faster, less costly, and produces a wider range of results than its counterpart. This does not mean that it is cheaper or of poorer-quality, merely that it is different than a more targeted search. Contingency recruiters find the candidates before being paid and only get paid if the client hires one of their candidates. You are guaranteeing them only an opportunity to make money. They therefore work for many clients and provide them all with massive amounts of candidates who might be good for their positions as this is the best way for them to serve clients and make money. They will review your job requirements and company information for a basic guideline and reach out to loads of candidates in their vast network.

Contingency recruiters are typically paid an average of 20% of the employee’s salary in one lump sum after the candidate is hired or after the candidate has worked for you a certain period of time.

You won’t get perfectly targeted candidates with a contingency search, but you will get:

● quick results
● a lower rate that is paid at one time
● many candidates to choose from
● a recruiter who specializes only in one industry
● enough quality candidates to fill many openings
● more responsibility and decision-making on the client’s side

What Retained Search Has To Offer

Retained search is targeted, exclusive, and ideal for positions where the new hire has to be perfect. Clients pay the recruiter before they start to work so the recruiter is free to invest the time and resources for research into the position and company, conducting thorough candidate sourcing, and wooing the desires candidates.

Recruiters who specialize in retained searches maintain a huge database of well-nurtured candidates. They will typically work only for you, so the candidate is primed for your company and not suggested to other companies at the same time they are shown to you.

Like contingency recruiters, they are quite specialized, but retained recruiters may branch out for individual clients. Since they will only be working for you, they can sink their teeth in, do the research, and provide quality results even outside their usual expertise. Delving into the company and the candidate is the most important aspect of their task.

Retained recruiters estimate the total fee and bill you for an initial, partial amount to “retain” their services. You will then receive periodic bills until the candidate is hired and you will then pay a final bill based on the candidate’s salary. This sounds like much money more than it is. The actual fee is usually around 30%, only 10-15% more than the contingency recruiter’s, but it is broken up into various payments to cover their time and resource investments. Sometimes you will receive an additional bill for unexpected expenses on the recruiter’s end. A major bonus is that most retained recruiters offer a guarantee to find a replacement should their candidate not work out.

You will pay a little more for a retained search, but you will get:

● A detailed list of the recruiter’s strategy upon contract start
● few, but excellently targeted candidate matches
● a rate that is paid over the course of the work period
● detailed profiles on the candidate(s)
● in-depth knowledge of your company’s goals and needs as well as the position for which they are hiring
● a recruiter whose candidate selections require minimal decision-making on your end
● a specialized recruiter who can also easily and reliably branch out
● the perfect candidate for a very important and/or hard-to-fill position
● exclusivity
● careful salesmanship for your company, rather than minimal preparation
● all interviews, reference checks, and onboarding are typically completed by the recruiter
● a recruiter who hangs around to help new candidate succeeds

It’s About What You Need

free applicant tracking systemContingency and retained searches offer clients equal, but very different benefits. The reward for one search over the other depends on the position you are hiring for, your company’s needs, and how much control you want to have over the process.

If your company needs a brand boost, or you will be competing with a very popular company for the same candidates, you will probably need a retained search recruiter to match you with great talent. They can give your brand the attention it needs to find appropriate candidates and then sell them on your company where a contingency recruiter will likely present the same candidates to many other companies.

Choosing retained search also makes your company look better to candidates. You see, while they are getting courted by the recruiter, they’ll be getting the impression that your company cares about finding and nurturing the right candidate. Also, being well-informed of the company’s policies and culture will win their trust. Experienced candidates have learned that contingency recruiter tactics go with less-targeted, lower-rung roles and your best candidates may feel overqualified for the role just based on the recruiter’s behavior. The best job description and benefits package can’t cover up the impression given by your choice of recruiter.

The job you want to fill is an important factor in which type of recruiting service you need. If you need many employees for a job that doesn’t require skills that are very difficult to find, a contingency recruiter would suit your needs very well. This way you’ll enjoy a list of many qualified candidates at a great price. If you need one or a small number of employees who will be hard to win over, say because they are a passive candidate or one with a very in-demand skillset, you should spend the little extra investment on a retained search recruiter. They can take the skills, experience, and cultural needs of your company, mix them with time, expertise, and salesmanship and present you with candidates you can bank on.

You can hire multiple contingency recruiters to benefit from so many networks and get a larger number of candidates to choose from. Business owners wouldn’t do this with a retained recruiter.

If you want more options, say because you aren’t sure you won’t be hiring from within or you want to micromanage the candidate selection process, a contingency search may be better suited to your needs. You will be paying for a large number of candidates to select from so you can engage in more informed decision-making. This is a great path to take should you want to compare candidates you have access to with a wider group of candidates to accurately assess their value.

The contingency recruiter will be more of a sourcer, able to offer minimal other recruitment benefits you might expect, such as culturally-matched candidates, candidate training, and after-hire candidate onboarding. The retained recruiter will provide the targeted, in-depth recruiting experience for one or a small number of positions.

Hybrid Contracts

Some recruitment agencies offer contracts that share qualities from both contingency and retained searches. The fees, exclusivity, and candidate sourcing and nurturing methods may differ. For instance, you might get the contingency recruiter number of results with more targeted recruiting practices.

Hybrid contracts would be particularly helpful for attracting a large number of candidates with more coveted skillsets. Discuss the details with firms you are considering to see if you can get exactly the range of benefits you need for your business.


Contingency and retained search recruiting contracts should probably both become part of your hiring bag of tricks. Use contingency when you need many candidates for a position that doesn’t need a very hard skillset to match; not because it is cheaper. Choose retained search when you need a carefully matched candidate or small number of candidates for an important position. Also, don’t forget that you can find hybrid contracts with some recruiters. Ask around about what different recruiters can offer your business.

Searching For The Best Free Applicant Tracking System In 2017?

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