When companies seek to hire management and professional talent from outside their organization, they have several options. They can decide to manage the process themselves, using advertising, the Internet, and/or a contracted researcher to identify potential candidates; use contingency recruiters; or use a retained executive search consultant. By understanding the differences between retained executive search and contingency recruiting, you, as the hiring manager, can make a more informed decision as to the most appropriate course of action to take in filling your key positions.
Choice of Internal or External Resource
Using the first option, the hiring executive or a human resources executive makes an effort to find qualified applicants, typically by advertising the position in the print media or on the Internet, and then screens responses, interviews candidates, and selects the person to be hired. The advantage here is that the company retains full control of the process.
The disadvantages are that many qualified candidates (including some of those most qualified) may not see or respond to an ad or post their resumes on the Internet; many unqualified candidates must be evaluated in order to discover those who are qualified; and, once qualified candidates have been identified, hiring authorities face complex, time-consuming, and sensitive issues of negotiation and reference-checking ? without the benefit of a third-party professional.
Therefore, many organizations prefer to use independent recruiters. But how do they decide whether to use a contingency recruiter or a retained executive search consultant?
Fee Comparison
On the surface, it appears to be simply an issue of how the recruiter gets paid. A contingency recruiter earns a fee only when the organization hires someone. A retained search consultant, on the other hand, is paid in advance to conduct a search that usually results in a hiring.
What needs to be understood, however, is that the way the fee is paid has a great deal to do with how the work is carried out, and what kind of result can be expected. When a company retains an executive search firm to fill a particular job, it is paying for the process of conducting a search. Without being paid in advance, a contingency recruiter has no assurance of being paid at all. Therefore, a contingency recruiter cannot afford to invest a great deal of time working on any particular engagement, because a successful outcome often depends on factors beyond the recruiter?s control. Contingency recruiters typically work with a large number of job openings, and, using a database of known candidates, look for matches on paper and send those candidates? resumes, as many as possible, to clients for possible interviews.
Level of Service
As such, the contingency search process is geared to identifying qualified candidates ? but not necessarily the most qualified candidates that could be found if significant research and in-person interviewing were to be applied to the hiring organization?s particular need.
Contingency recruiting is generally most appropriate in the following situations:
*When the total compensation of the position is less than $100,000;
*When many people are likely to be qualified for the position;
*When multiple vacancies with the same job description are being filled;
*When the hiring organization wants to take more responsibility for screening, interviewing, and negotiating with candidates.
Retained executive search consulting is generally most appropriate when the position being filled is key to the success of the company, when the total compensation of the position is above $100,000, and when it is critical to hire not just any qualified person, but the most qualified person available. The hiring organization will also want:
*A recruiter who will make a dedicated effort on its behalf to filling the position, and who will take into account nuances of the hiring organization's culture and other critical issues related to the job vacancy.
*An independent third party to thoroughly screen candidates, through in-person interviews, before finalists are presented.
*Evaluation of internal candidates against an external shortlist.
*A go-between to help persuade a candidate to leave a desirable position for a better opportunity, and to help negotiate the terms of the move.
*A high degree of confidentiality in the recruitment process.
Be sure to check out the Conclusion of our Series in PART TWO in two weeks!
