Important Parts Of A Contingency & Retained Search Agreements

Finding the right employees can be difficult, especially when your company is looking for an important, specific, or timely role. Sifting through resumes, managing interviews, scrolling job sites like LinkedIn, and evaluating the expertise of every applicant in detail can be time-consuming. That’s one reason why many businesses choose to enter into partnerships with recruitment professionals.

Retained searches, in particular, can be very beneficial. Understanding what retained searches are, how they compare to other forms of recruitment, and what to look for in your contract with a recruiter can all help turn your staffing challenges into opportunities for growth.

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Contingency and Retained Search Agreements

Before diving into the contract agreement behind a retained search, it’s important to understand the different types of recruitment methods available so you can’t understand the agreement type that’s best for your business needs.

Contingency Search

A contingency search is a form of recruitment in which an independent recruiter or a staffing agency finds placements for employers on a contingency basis. This means that the recruiter or firm’s payment is contingent on them finding the right person for the job. Recruiters won’t make money unless or until someone is hired for the position. Contingent recruitment can be good for lower-stakes hires where there is more flexibility in your search and less of a need for around-the-clock commitment from your recruiter. Without an up-front fee, the recruiter can decide how much time, energy, and resources they can dedicate to your business. In exchange, the employer can offer other recruiters the chance to find a placement for the position.

Retained Search

Retained searches are different from contingency searches in that the recruiter is retained, or paid, in advance of finding a candidate, giving them more incentive to have success in their search. No matter what industry your business is in or what your business model may be, a retained search is a great way to fill critically important positions. By paying a recruiter upfront for their services, you ensure a placement and a more dedicated approach.

Another difference between the engagement fee and the standard retainer involves ownership of candidates during the hiring process. With the latter, the recruiting firm is typically not able to present candidates to this particular client to other companies until the search has been completed. (Or unless the client specifically states that it has no interest in the candidates.

What Are the Types of a Retained Search?

Just as there are different types of recruitment methods, there are also different kinds of retained searches.

Standard Retained Search

In a standard retained search, businesses and recruitment firms enter into an agreement in which the recruiter is usually paid at multiple stages throughout the search process as certain milestones are met or agreed upon timeframes have passed. These payments are agreed upon and outlined in the retained search contract. It’s up to your business and the recruiting agency to agree upon the specifics of the payment terms and time frame allotted for finding the right talent.

Engagement Fee Retained Search

In retained searches with an engagement fee, businesses can experience a sort of middle ground between contingency searches and standard retained searches. It is part contingency in that the majority of the payment for the recruiter comes at the end of the search, as in once a placement is made. However, it is part retainer in that an engagement fee is paid upfront with the total amount being paid once a candidate accepts the job.

Why Choose Retained Search?

Retained searches are great for high priority positions or those that have an urgency associated with filling them. If you’re in dire need of filling a position or if the open position is one that will have a high impact on your business, such as a CEO, CFO, manager, or similar upper level role, retained searches can help find qualified candidates quicker and more successfully than other types of recruitment.

Along with great results, retained searches provide guarantees and structure around the often complicated process of recruitment.

What is a Retained Search Agreement?

A retained search contract, or agreement, outlines all of the most important information related to working with a recruiter to hire an employee. Below are the most important parts to look for in a retained search contract to make sure your company is getting what you need and to ensure that you’re working with a quality recruitment team.

Terms of Search Agreement

Organizations often start out somewhat unsure about what recruitment methods are, which is right for them, and what terms are in place for entering into a partnership with a recruiter. Luckily, the terms of your agreement should be clearly outlined in the contract. “Terms” is an umbrella term that could mean many things, but look for details such as the timeframe and parameters of your search, the processes the recruiter will use to find the right candidates, costs, and any areas of concern you might have about the arrangement.

Exclusivity

An important aspect of a retained search contract is outlining exclusivity. This means that you and the recruiter agree to only work with one another regarding filling the position. Having the details of this exclusivity agreement is beneficial for not only recruiters but also their clients. It helps establish a mutually beneficial relationship for all people involved.

Fees

Knowing how much you’ll pay is very important. A retained search contract should outline fees in detail, including any payment plans you’ve agreed to. The amount you’ll pay for a retained search varies, but is often based on a certain percentage of the salary amount your organization has agreed to pay the employee.

Guarantees

Usually, a retained search includes some kind of guarantee surrounding the placement of employees in agreed-upon positions. The details of the contract could outline things like a certain time frame to expect a placement, the experience level the future employee will have, the vetting process surrounding sourcing the employee, and more.

Confidentiality

Retained searches are often used for high-impact positions. That said, it can be important for certain companies or positions to have a confidentiality agreement outlined within the contract. This protects the privacy of your company, the recruitment firm, and the potential employees who are considered for the position.

The 5 Most Important Parts Of A Retained Search Contract

Contingency and Retained Search Agreements

What Are the Types of a Retained Search?

Why Choose Retained Search?

What is a Retained Search Agreement?

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