Search Vs. Contingency Recruiting:
is the Difference?
organizations need to recruit outside management talent from time to
time. In doing so, there are 2 alternatives for them to consider.
First, they can manage the hiring the process themselves or,
second, they can use outside recruiting consultants to help the process.
In the do-it-yourself option, the hiring manager has the advantage of
controlling the entire recruiting process: placing advertisements,
screening applicants, interviewing candidates, salary negotiations,
reference checking and so on.
The disadvantage, of course, is that recruiting senior executives is time consuming and requires specialized skills.
The most desirable candidates are happy in their jobs and do not
actively seek new employment through job postings, career fairs
and contingency employment agencies. Such people usually
also have concerns about sending their confidential information to
an unsolicited source or directly to a competitor in their
For these reasons, it is common for organizations to use independent
recruiters to fill management positions. The question then becomes
whether to use a contingency recruiter or a retained executive search
Most people would recognize that recruiting a General Manager or a
CFO is much different from hiring applicants for clerical or
menial jobs. As a result of these
differences, 2 types of recruiting services have developed over
time to cater to each requirement.
Virtually all junior and entry level positions are filled using the
contingency recruiting model. Common names for the service include: employment agency, staffing &
manpower firm, personnel recruitment and placement agency.
Contingency Recruiting means their fee is conditional (or contingent) on a placement
Most senior management roles are filled using the retained executive
search model. Retained Search is provided in a similar manner to
professional services such as accountants, lawyers and architects. They
are retained for their specialized skills and work exclusively on
behalf of the client. Common names for the service are executive
search and retained search.
Note: In many emerging countries in Asia, general personnel
agencies often call themselves "executive search"
since the differences between of management and general recruiting
are not well understood.
recruiters are most used for individual contributor and some
junior manager positions. Retained (executive) search is
most used for management and especially executive level
roles. The way to determine the difference is ask the
provider whether their fees are “retained only” or “contingent
You Pay Is
The manner of payment has a profound effect on the service provided.
people provide services in the manner of commission-only sales people.
They receive payment only if a placement is made and cannot afford to
invest a great deal of time on any one assignment. Theirs is a high
volume business and they often serve direct competitors for the same
positions. They collect as many resumes as possible from sources like
databases, job postings and the like, and then send them as quickly as
possible to multiple clients before their competitors do. Interviews are often
cursory or conducted by junior staff. Detailed assessments
to compare candidates to others in the industry are not
people entering the field of recruiting begin as Contingency
people are paid in the manner of other skilled professions such as accountants, doctors and engineers, and
significant time on filling individual positions. They
typical source Passive Candidates who are not seeking current
employment and are considered successful and stable in their jobs. They
will personally interview and assess each candidate for suitability.
Retained Recruiters either have many years of management
recruiting experience or are themselves former senior
When to Use?
Use when positions are low
level and not critical to the organization
Use when many people are likely to be qualified for the roles
Use when filling large numbers of positions
Use when speed is greater priority over quality
Use when the hiring manager wants to control screening process, interviewing and negotiating with candidates.
Retained executive search
Use when positions are senior
and critical to the organization
Use when confidentiality of clients and candidates is important
Use when quality is more important than quantity and speed
a history of career stability is required
Use when professional assistance of recruiting process is required
Who Works For Who?
difference has to do with exclusivity. Retained search consultants
spend a lot of time sourcing candidates who are happy and stable with
their employers and not actively seeking other employment. They
evaluate candidates for a particular client and will not present
candidates to more than one client at a time. Therefore, the client
will almost never find himself in a bidding competition for a desirable
candidate with a business rival.
The nature of contingency recruiting is such that exclusivity is not
possible. A contingency recruiter is in a race against others to
present candidates before they do. When desirable candidates are found, they must
present them to as many clients as possible to have the greatest chance
of making a placement.
Neither contingency nor retained executive search consultants should
accept fees of any nature from candidates. However, contingency firms
have incentive to proactively "push" candidates to employers. Retained
consultants do not assertively push candidates; they are paid for the
process and are expected to be impartial judges of suitability.
Does it Take?
The contingency recruiting process is straightforward and fast.
Recruiters get some basic facts of the job, scan for candidates from
resume databases and internet sources, and send the raw resumes to clients as
soon as they get them.
The retained search process is more involved and takes longer..
The consultant will
typically meet with the client to learn about his company and
its culture, as well as details of the type of candidate desired.
The consultant will target
candidates who are successful and have a history of career
stability from industries identified as suitable by the
Through this research, a "long list" of candidates who are possibly suitable and interested is collected.
Screened candidates are personally interviewed by the consultant to determine suitability and interest.
qualified candidates are submitted to the client for interviews along
with detailed interview notes of the candidate’s background.
The consultant conducts references checks from formal and informal sources.
The consultant advises on a job offer and mediates acceptance by the candidate.
Afterward, the consultant will stay in touch with the candidate to ensure an smooth transition.
Contingency recruiter frequently represents candidates seeking
placement and works with competing clients
Retained recruiter works for the client only.
Contingency recruiter works in competition with other
for the placement.
Retained recruiter conducts search assignments on an
Contingency recruiter seeks to fill lower level and
some middle management roles and handles many job
openings at once.
Retained recruiter usually works with a small number of senior management and middle management roles.
Contingency recruiter does not need to meet clients or
candidates in person and spend less time on initial research and
Retained recruiter must understand the client organization and
position details thoroughly. Personal meetings with
clients and candidates are required.
Contingency recruiter mainly
seeks applicants who are highly motivated to change jobs
and who, therefore, may be unhappy or
unstable in their careers.
Retained recruiter focuses on acquiring candidates who are happy
and successful in their jobs and not actively seeking new
Contingency recruiter works concurrently with a multitude of
open job orders and clients from the same industry.
Retained recruiter works on only 3 to 5 assignments at any
time and is personally accountable for success of each.
Contingency recruiter has no guarantee of payment for services performed
and cannot afford to invest much time in a search beyond
Retained recruiter invests considerable time for each assignment in screening,
interviewing, evaluation and client
Contingency recruiter will present most candidates within 1-2
weeks after obtaining a job order; often submitting less
desirable candidates to increase
probability of a placement.
Retained recruiter usually recommends only 3-8 highly
qualified candidates to a client company within 4-6 weeks.
Contingency model requires considerable involvement of the
hiring manager in screening, interviewing and evaluating
Retained model requires minimal time investment of the
hiring manager until interview process.
Contingency fees range from 10-20% of annual compensation
and are paid after placement is made.
Retained fees range from 20-30% of annual compensation plus
expenses with part of fee paid up-front.
Decision to choose Contingency recruiter is usually made by
Human Resources department.
Decision to engage Retained Recruiter is typically made by
this e-book to learn all you need to know to
get the best people on your bus and drive it to greatness.
A global manager's failsafe
guide to dominating any industry
by employing its dominant
New sections are being added so
check back regularly.
Send your comments and
& Management Consulting:
Associates provides its Executive Search and Recruiting services throughout the emerging countries of the Asia Pacific
region with specific focus on Philippines, Singapore, Malaysia, Indonesia, Vietnam, Cambodia, Laos.
proactive and well known in our sectors of focus. Regional
Managers use us to help bridge the gap between local environments and
the world-class requirements of multinational corporations.
o n t a c t U s
+ 632 822 4129
CEO Forum presented by PLDT ALPHA Enterprise is the largest
regular business event in Philippines and considered one of the
most important in the Southeast Asia region. The forum serves as a
hub for the spreading of ideas that help executive managers
overseeing enterprises across the Asia Pacific region.
Attendees are both expatriate and Asian management personnel
overseeing multinational and regional organizations. Held in
Philippines, presenters are leaders in their industries and
engaged in momentous pursuits of significance to the entire
CEO Forum is operated as a CSR (Corporate Social
Responsibility) activity of Chalre Associates, one of Southeast
Asia's most prominent senior management executive search firms, to
promote Philippines as a premier business destination in the Asia
Here to go to Asia
CEO Forum now!
CEO Awards presented by Aseana City represents the
grandest alliance of local and international business people ever
created to promote Philippines on the world stage. As one of the
largest events of its kind in the Asia Pacific region, it is
considered a must-attend occasion for business leaders active in
The star-studded Board of Judges of Asia CEO Awards give
away 10 awards to many of the most accomplished leadership teams
and individuals currently operating in Philippines and the region.
The awards recognize extraordinary leaders who have demonstrated
outstanding achievement for their organizations and contributions
As one of the fastest growing nations on the planet, the world's
business leaders have their eyes on Philippines like never before.
The annual gala was established as a natural outgrowth of Asia
CEO Forum, the largest regular networking event for the
business community in Philippines.
to go to Asia
CEO Awards now!
throughout the world call upon the Principals of Chalre Associates for thought leadership.
Below are some examples of published material written by our
consultants or international journalists who refer to them. For a complete list of published work,
Getting Ready For The
Deluge: Outsourcing in Philippines
Chalre Associates senior staff
Economist Intelligence Unit of the Economist magazine
asked Chalre Associates' Chairman, Richard Mills,
to write a chapter about the Philippine outsourcing sector
in its annual Business Guide Book. The material
provides a Executive Briefing on the progress and major
issues facing this industry that is certainly one of most
significant growth stories in the world.
Asia Pacific Mining
Conference 2007 - Report
Chalre Associates senior staff
The 7th Asia Pacific Mining Conference put on by the Asean
Federation of Mining Associations was perhaps the largest
such event in the region. Richard Mills, Chairman of Chalre Associates
gave this report on what was said by the prominent mining
people who presented.
State of BPO in Philippines: Dan Reyes Speaks
Chalre Associates senior staff
Mills, Chairman of Chalre Associates,
interviewed Dan Reyes of Sitel for ComputerWorld (US) recently to get
his views on the state of the BPO industry in Philippines. Dan
presented US readers with compelling information to support his view
that Philippines is currently seen as the "Number 1" option by global
companies sending BPO work to offshore destinations.
Dan Reyes is easily one of most experienced Business Process
Outsourcing (BPO) managers in the Asia Pacific region and the world. He
is head of the extremely successful Philippine operations of Sitel, the
world's largest call center organization. Among other things, he is a
founder and former president of the Business Processing Association of
the Philippines. more