As more and more firms look to grow or replenish their teams, competition for A+ people is at it’s highest. Companies and their recruitment partners alike are finding constant challenge in securing new colleagues, with a rise in counteroffers, candidate dropouts and (the dreaded) salary over-inflation all playing a big role, especially in niche or candidate-shy markets.
Naturally, companies are thinking about alternative resourcing strategies. What more can they do and what else can they try to get the results their business needs? We’ve seen a rise in recruitment firms selling retained solutions; but what is a retainer and when is it appropriate?
Retained Search
Retained Search is typically associated with a firm providing an Executive Search process. Some of the largest Exec Search firms in the world (known as the SHREK firms) offer a comprehensive search process, with features not offered in a typical contingent relationship, for very senior roles, across a variety of markets.
It’s expensive, but you get a lot for your 33% of remuneration + expenses – a dedicated research team, full market map, search report and updates, comprehensive in-person interviews (when practical/possible), shortlist reports with full CV’s, references, candidate profiles, compensation and benefits statement – the list goes on.
Retained search is for when you have a very important, usually very senior role and you want to be absolutely sure you hire the best available person in the market, with a dependable business running the process comprehensively, professionally and with full dedication. It also gives you more control over the search and the messaging into the market and the chosen firm has full accountability.
The recruitment fee is calculated at the beginning and charged in 3 stages: 1/3rd up front, 1/3rd on delivery of the shortlist and 1/3rd on completion of the assignment. Sometimes, the invoices are divided up and charged on commencement, then after 30 days and after 60 days, regardless of progress or success.
Be Careful
Our advice to business and their talent teams right now is to be careful. Recruitment teams that typically provide a contingent (no win, no fee) service are encouraging clients to pay in a retainer style, yet still deliver a (mostly) contingent service. You may get the recruiters time, dedication and more accountability, but if they’re pushing for a higher fee rate, we’d encourage you to ask the question, what else am I getting for my money? If there isn’t much of a difference between what they usually provide and their ‘retained solution’ our advice is to step back and consider a broader selection of providers before committing. It’s a lot like if you have someone painting your house, and they offer to help you with the electrics, you might say yes before considering a) if they’re an experienced electrician, or b) if they’re genuinely the best person for the job, all in the name of convenience.
The Future
The market is changing and slowly we are seeing the monopoly of the SHREK firms eroded by boutiques, market disrupters, inhouse teams and alternative solution providers. The closely guarded, coveted black book of senior contacts has been made available to more and more competitors through technology (LinkedIn mostly, but other means too), and companies are managing their recruitment spend in a more careful way.
In a busy market, contingent recruiters must be efficient with their time, and the likelihood is that if their other clients have more attractive roles for them to work on, they will receive the priority.
If you’re not getting the results you want from a panel of contingent recruiters and see the benefit of giving more accountability to one firm and retaining someone, but don’t feel the role is senior enough to warrant a traditional executive search process, then I’d encourage you to think about a model in between the two. One that captures the benefits of a retained search but can be more easily applied to mid – senior level roles and won’t break the bank.
James Craven, Managing Director for IGA Talent Solutions, co-founded IGA with Peter Knowles and James Caan CBE in 2018, aiming to bring a consultative and agile recruitment solution to the professional services market. Over the course of his recruitment career, James has represented some of the largest investment businesses in the UK and internationally, bringing new talent that enriches brands and positively impacts business performance.
At IGA, James oversees investment, pensions and employee benefits divisions, managing a team of consultants and researchers, and is responsible for the operational and financial management of the business. He is a regular market commentator on the importance of financial education for the younger generation.
You can contact James for a friendly discussion any time by clicking here.
