|Success fee / Contingency firms||Retainer firms|
|1. Frequently represent individuals seeking placement.||1. Represent Companies employer only.|
|2. Are usually in competition with other similar agencies for the placement.||2.Conduct search assignments on an exclusive contract basis only.|
|3. Professional staff is usually compensated on commission for placements made.||3. Professional staff is usually compensated on salary and bonus with incentives for client business development.|
|4. Usually search for lower level organizational positions including but not restricted to individual contributors.||4.Usually work at middle to senior management organizational levels.|
|5. Tend to spend little time on initial research and specification; often never meet company management or prospects.||5.Must know client organization and position responsibility / requirements thoroughly before initiating search. Typically document this in a position description and precise profile chart (PSS, Project Scope Summary)|
|6. Focus primarily on applicants / candidates actively seeking employment; recruiting is placement-oriented.||6.Recruiting efforts are strategically focused on a broadly targeted range of potential candidates, most of them are not active in the job market; recruiting is process and result oriented.|
|7. Search consultant works concurrently with a multitude of open jobs.||7.Typically the search consultant is personally committed to 1-2 assignments at any given time and is responsible for the success or failure of each.|
|8.Search consultant and researchers typically invests 80-120 hours each per month per client assignment in recruiting, evaluation, screening and client interaction.||8.Search consultant and researchers typically invests 80-120 hours each per month per client assignment in recruiting, evaluation, screening and client interaction.|
|9.Usually recommends 3-10 highly qualified and ranked candidates to client company in 4-8 weeks.||9.Usually recommends 3-10 highly qualified and ranked candidates to client company in 4-8 weeks.|
|10.Requires minimal Human Resources and General Management time investment until interview process begins.||10.Requires minimal Human Resources and General Management time investment until interview process begins.|
|11.Reputable firms offer a professional guarantee of candidate success and are committed to thorough and ethical practices and results including an off limits policy.||11.Reputable firms offer a professional guarantee of candidate success and are committed to thorough and ethical practices and results including an off limits policy.|
|12.Fees range from 20-33% of compensation (or flat quote) plus expenses and are paid by company in installments.||12.Fees range from 20-33% of compensation (or flat quote) plus expenses and are paid by company in installments.|
|13.Authorization for search is usually made by company General Management and Human Resources Management with rigorous selection criteria.||13.Authorization for search is usually made by company General Management and Human Resources Management with rigorous selection criteria.|
1 – When high confidentiality is requested
- Internal: Client wants to replace a person who is currently on board and who doesn’t knows he will be fired
- External: Client enters a new market and doesn’t want all competitors from the same industry to be informed of this new strategic orientation
2 – When searching for a strategic position
- Recruiting a key person is crucial for the future of any company.
- High confidentiality and a very professional approach are mandatory.
3 – When searching for a profile with very accurate skills
- When candidates are very few, very rare on the market and not open to new challenges
4 – When client want to control its company’ image approaching candidates
- To avoid 3, 5 or 10 different agencies to approach people, with consultants whose style is not under control, contacting a lot of people in client’s industry repetitively, week after weeks, showing to competitors client’ difficulty to attract the right person or with poor professional approach
5 – When timing is important, guaranteed date for interviews is important
- Contingency business appears faster than retained: to get the contract 1 or 2 weeks is frequently promised by contingency suppliers (success fee contracts).
- It is not rare a position to stay vacant during 6 to 10 months using contingency/success fee methods.
- The retained agency must provide a precise guaranteed timing (i.e. a precise contractual date to deliver the relevant short list).
- “Relevant” means a short list including candidates whose professional expertise, personality and motivation has been evaluated.
6 – When scope of search is wide
- Some search requires going deep in the industry to scan candidates. It needs time and resources.
- Generally, non-exclusive agencies (contingency) will not invest the necessary resources (time and money) to conduct complex searches or do a thorough investigation of an industry. They prefer using a business model that consists of acting fast instead of profoundly.
7 – To avoid screening a lot of non-relevant resumes
- Receiving hundreds of non-relevant resumes or candidates is a huge waste of time for HR and Hiring manager.
8 – When client wants to minimize risk
- In a fast and competitive environment like China, timing is crucial. Your competitors are active and effective in their recruiting. Posting job-postings on job boards and working in a contingency mode is only suggested when recruiting for easy to fill positions. Otherwise, using contingency mode to attract star talent is considered a high-risk gamble.
… To summarize, companies decide to retain an exclusive agency when they decide to really master the recruitment process.