Contingency Firms Versus Retainer Firms

Frequently asked questions about executive search often result from a lack of understanding of the two major types of practitioners in our industry. Here is a factual guide for your information.

1. Frequently represent individuals seeking placement. 1. Represent Companies employer only.
2. Are usually in competition with other similar firms or agencies
for the placement.
2. Conduct search assignments on an exclusive contract basis only.
3. Professional staff is usually compensated on commission for placements
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
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 whom are not active in the job market;
recruiting is process and result oriented.
7. Search consultant works concurrently with a multitude of open job
7. Typically the search consultant is personally committed to 3-5 assignments
at any given time and is responsible for the success or failure of each.
8. With no guarantee of payment for services performed, the consultant
cannot afford to invest much time in a search beyond basic recruiting and
submission of resumes.
8. Search consultant typically invests 40-160 hours per month per client
assignment in recruiting, evaluation, screening and client interaction.
9. Will present most candidates within 1-2 weeks of obtaining job order;
may submit substantial paperwork to increase probability of a placement
by pushing for interviews and hoping for interest on both sides.
9. Usually recommends 3-10 highly qualified and ranked candidates to
client company in 4-8 weeks.
10. Contingency search requires considerable Human Resource involvement
in screening, interviewing and evaluating candidates presented.
10. Requires minimal Human Resources and General Management time investment
until interview process begins.
11. Under no obligation to guarantee or produce results due to contingency
fee arrangement (paid on placement only).
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 15-33% of compensation and are paid by company
on placement (or shortly there after).
12. Fees range from 25-33% of compensation (or flat quote) plus expenses
and are paid by company in installments.
13. Decision to pay a fee is usually made by Human Resources and is
budgetary motivated.
13. Authorization for search is usually made by company General Management
and Human Resources Management with rigorous selection criteria.