Contingency Recruiter or Retained Recruiter: Which Option is Right for Your Company?

Imagine a fisherman casting his line into a huge school of fish, attempting to hook one particular individual. For human resources managers, the recruitment and hiring processes are nearly as daunting. Employers are tasked with selecting the perfect future employee from a sea teeming with candidates. The onus of their additional responsibilities, which can range from benefits administration to union negotiations to compensation management, often prompts HR professionals to turn to contingency recruiting or retained search recruiting firms to find the right job candidate.

Known interchangeably as recruiting companies, employment recruiters, HR recruiters, job recruiters, headhunters, staffing services, and staffing solutions firms, both contingency recruiters and retained recruiters are external to the company that holds the actual job opening. Both external services perform the same basic and yet very critical function. Using the employer’s specific criteria for work experience, level of education, job functions, and salary range, those services locate, screen, and recommend the most qualified applicant for hire.

However, there are significant differences between a contingency firm and a retained search service. With the former, the employer and contingency recruiter enter into an agreement through which the contingency recruiter is only paid if its efforts result in the client’s hiring the right person for the job. The level of motivation to find that person, therefore, can fluctuate like the temperature in March. Contingency recruiters may work diligently in pursuit of that potential payment, or they may work less than diligently, for there is no guaranteed payment for their time and effort. And, contingency firms search for employees with diverse levels of responsibility.

By contrast, retained search firms are always paid by the employer for their efforts in finding the right job candidate. Therefore, the commitment of these staffing professionals is greater than that of their contingency counterparts; their work ethic mirrors that dedication. Usually conducted to identify the most qualified C-level personnel and other high-ranking executives, the searches of retained recruiters attract and yield serious candidates who understand the level of commitment on the part of the retained firms as well as the employers.