The process of finding talent at work is not an easy process. Finding the best talent need a deep understanding of the company culture and an expertise in assessing the skills, leadership style, and cultural fit of candidates. The process is even vital more so when hiring top management position since the new candidates will have an impact on the culture and the strategic decisions of the company. Since the hiring process can be hectic, most companies prefer to engage an executive hiring firm to assist them in the hiring process.
The agreement between recruiting agency and the company in need of employees can be classified into either retained search agreement or a contingent search agreement. The following are the guide to understanding recruitment models.
A recruitment agencies can adopt a retained search model in the search of superior expertise. Suppose a firm decides to use this model, it will have to create and stick to the off-limits agreement, meaning it will not source candidates from a current employer. When you want to seek the services of a large recruitment firm, you will have to pay an amount in order to qualify for an off-limits agreement. When you are looking for employees to fill senior level roles, you may consider choosing retained search model. Depending on the search firm you choose, when you decide to go for retained recruitment model, the fee of a placement fee that you will have to pay is in most cases in the thirty percent range of the total annual compensation for the position.
When you want to pay for a placement fee under the retained model, you will have to go through three steps. The steps include one as a retainer to initiate the search, the other as a times date during the search and the last one being upon the placement of the candidate.
One of the unique features of contingent search is that it aims at filling middle-level to lower-level positions. Just as the name suggests, recruitment firms that work on contingency tend to get paid once a candidate is placed. When you compare the contingency fee with that of retained search, you will find that the former is a lower percentage of the annual compensation of the latter.
In retained search, you can find multiple firms working on the same search, however, this is not possible with a contingent model since the searches are not exclusive. One of the ways in which clients can get many resumes is by seeking the services of many recruitment agencies. The beauty about contingent recruitment model is that it enables companies to conduct their own search or even recruit from within. Therefore, depending with the needs of your organization, you can choose between contingent or retained recruitment model, however, you need to keep in mind the properties of each model when choosing.