Working with a recruitment agency will usually take one of two structures, contingent or retained. Often the retained model is seen as the most costly but could this model actually save you money in the long run?
Firstly, the difference between the two…
Sometimes known as “no win, no fee”. Contingent recruitment means that you only pay a fee once the successful candidate has started. Candidates will be presented, interviews conducted and then the decision is made whether to offer and hire the candidate. On this basis recruiters will be working multiple positions simultaneously, for several clients.
The fee paid to the recruiter will be split into 3 instalments, the first at the beginning when instructing the search, the last on candidates start date and the second somewhere in between, typically on submittal of a shortlist. The overall sum will be the same as that on a contingent basis however the increased level of service is notable.
So, what are the benefits of retaining a specialist recruiter and why will it save you money?
Undoubtedly you are showing greater levels of commitment by paying a proportion of the fee upfront, in return you can expect your specialist will show the same increased levels of commitment. Whereas normally their focus would be across several roles and clients, a retained recruiter will have you as their sole focus, dedicating their time and expertise to deliver results. This will also mean you have exclusivity of the candidates being presented as they won’t be submitted to other clients.
The retained model forms a partnership where your specialist becomes an extension of your brand, they will invest the time in learning the intricacies of your business, the role and culture. Deep understanding will lead to a higher success rate as candidates understand and are better aligned to your company values.
Time equals money. We all know the longer a position goes unfilled the higher cost that represents to the company. Whether that’s projects taking longer, other people having to cover workload or the inability to have someone onsite with a client, it is all going to be negatively affecting the bottom line. Therefore, the sooner you can get someone onboard, the better.
We talked about the dedication you receive on a retained basis and it’s this dedication that means you will see results, quickly. Sole focus, exclusivity, and a better understanding leads to a higher calibre of candidates, increased success rate and in turn an expedited conclusion through:
Higher quality candidates that are better aligned to the requirement
Less time screening applications and CV’s for managers
Fewer wasted interviews = many saved hours/days
Confidence in decision making if you are choosing from a better-quality shortlist
Greater chance of longevity with the successful hire
Every recruiter will have experienced the frustration of sourcing for a client, submitting profiles, only to be told that the role is no longer there. Working retained eliminates risk for both the recruiter and the client. The recruiter knows the client WILL hire and as a result is accountable for providing the right candidates for the job. For them there is no need to hedge and put their eggs in multiple baskets. On the other hand, companies will have experienced the same frustration where they believe their role is being work but in reality, it’s not sitting high on the recruiter’s priority list. The exclusivity that comes with retained search means this will never happen.
The high calibre of candidates and investment in the process also means that there is less risk of the candidate pulling out and, in our experience, candidates sourced from a retained project stay in their new position for 21% longer.
Retaining a specialist recruiter doesn’t come at any greater cost than hiring a candidate on a contingent basis. However, the level of service, shorter time frames and reduced risk will inevitably make this a more cost-efficient model and greater long-term investment for your hiring strategy.