Understanding the Difference Between Retained and Contingent Search
May 17, 2024 – Navigating the world of talent acquisition and recruitment can be tricky for both clients and candidates. Whether you are looking to add an individual to your team or seeking a new opportunity; it is important to understand the landscape when considering a talent partner, according to a report from Mississauga, ON-headquartered executive search firm TSI Group.
“At first glance, retained executive search and contingent recruiters may seem similar in that they both assist organizations in identifying and hiring talent, however they operate very differently and serve distinct purposes,” the TSI Group report said.
With retained search, clients enter into an exclusive engagement with the search firm and a signed agreement to ensure a commitment on both sides to deliver with best efforts, a successful placement within specified timeframes, according to the TSI Group report. “A key difference is that retained search firms have a much more thorough method of strategically sourcing and approaching passive and active candidates in the market which delivers more credible pools of qualified candidates to the client for consideration,” the search firm says.
Related: Knowing the Differences Between Retained and Contingency Executive Search Firms
On the other hand, TSI Group explains that contingent recruiters, staffing firms, and agencies, as the name suggests, work on a contingency basis. “They may use a basic contract or informal agreement with clients and fees are only paid if they successfully place a candidate,” the report said. “Contingent recruiters often work on a volume-based model, quantity over quality, aiming to make the quickest placement with individuals actively in the job market.”
Knowing the Difference Between Executive Search and Recruitment
Many are confused by the difference between executive search and recruitment. The two terms are often used interchangeably, even by the people working within the industry. Although, we could say that recruitment agencies and executive search firms share the same objective – hiring the best possible talent – they do not work the same way, according to a recent report from InterSearch’s Marta Rojko. “There are several significant differences, and businesses should have a firm grasp on these differences when deciding which one will provide the best results for their next search,” the report said. “Choosing wrongly can result in costly mistakes, lengthy recruitment processes, and even wrong hire.”
One of the main differences lies in the seniority level of the roles. Executive search firms, as their name implies, focus on attracting highly skilled and experienced senior, executive or top-level management roles, according to the report. “These searches are usually high-risk for recruiters due to their preference for contingent-based business model,” the study said. “Executive consultants also specialize in positions that are typically harder to find or require a specialized skill-set. These senior-level positions are business-critical in terms of leadership as well as the unique abilities individuals require to execute long-term plans and daily operations.”
The TSI Group report also notes that they may send the same candidate to multiple employers which one could argue is misaligned with the client’s best interest. “Contingent recruiters focus on leveraging their existing networks, online ads, job boards, and other readily available sources which makes their process quicker, but less thorough,” the study said.
Working Within a Retained Search Model
An executive search firm invests significant time in comprehending the identified hiring need, executing a vetted hiring strategy and through comprehensive research, sourcing, and assessment, delivering the best possible hiring outcome, according to the TSI Group report. The firm notes that a retained search methodology is a highly tailored search process that clients appreciate and are engaged with that focuses on cultural fit and compatibility.
Importance of Distinction
“Knowing a retained search firms’ approach and ‘how’ we go to the market to source and attract the best available candidate allows the employer to mitigate risk and ensure a favorable outcome within needed timelines,” the TSI Group report said. “Working with a retained search firm gives you the added benefit of market intelligence on candidate pools including compensation insight.”
The report concludes that by stating that understanding what sets these groups apart will help you in making an informed decision when considering a talent partner.
TSI Group is a boutique search firm that provides executive search, strategic talent acquisition and leadership development to clients throughout North America. Celebrating over 30 years in business, TSI Group utilizes a robust search methodology and strategic approach to deliver optimal hiring and succession planning results. Pamela Ruebusch is the founder and owner of TSI Group. When she started the business over three decades ago, her goal was to create a firm that delivered the best available talent and executive search services to clients throughout North America.
Related: Knowing the Distinctions Between Talent Advisors and Recruiters
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Executive Editor; Lily Fauver, Senior Editor – Hunt Scanlon Media
