Contingent vs Retained Recruitment. Why hiring managers need to rethink their approach NOW.

For the sake of clarity before we dive into this contentious topic, (contentious between hiring managers and recruitment agencies at least) let’s just clarify the difference. In contingent recruitment, the client pays an invoice if they hire a candidate submitted by an agency and in no other circumstances. With retained recruitment, the invoice is split into three distinct parts, the first is paid on instruction to begin the search; the second is paid on receipt of an acceptable shortlist, (what is termed acceptable is of course agreed up front) and the final part is paid on successful placement.

So, now that we all know what each means, which is most suitable for permanent recruitment in 2019 and beyond? For the sake of clarity, the terms ‘candidate driven market’ or ‘candidate short market’ are not sales tactics dreamt up by recruiters to take power and control away from hiring managers and make them think they have to hire a suboptimal candidate. We really are working in those markets and candidates can afford to be selective about to whom their CV is sent and for whom they’d like to work. On that basis, aside from contingent vs retained recruitment, hiring managers need to be equally selective over the agencies with whom they engage in order to maximise their chances of a successful recruitment campaign.

Here come some brutal truths:

· The amount of effort a recruiter puts into your recruitment need follows a sliding scale which is directly linked to the number of agencies you’ve instructed. The more agencies you’re working with, the less effort recruiters invest. I know you want to believe we’re all putting 100% into your role, but if you were a lawyer, and your client had also instructed 5 other lawyers and said they’d pay the best at the end, would you put your all into the work and then hope yours was subtly better and you therefore got paid? Exactly

· Given their reputation for persistence in staying close to hiring managers, you can therefore expect 2-3 phone calls per week from each of the 6 agencies you’ve instructed, probably 3 CVs from each, the balancing act of which agency sent which CV, which CVs you’ve sent feedback on, which CVs you’ve rejected, which CVs you’ve requested interview with, what terms were agreed with each agencies, and so on and so on and so on

· In their desire to be fast, (in the face of competition with 5 other agencies) at least one of the recruiters won’t have done their job properly and sent a CV without properly screening the candidate, resulting in duplication of application and you’ll have the ensuing argument over which recruiter is representing which candidate, taking up yet more of your valuable time splitting up the squabbling school children

So, what’s my point? Well, simply that I’m sure you’ll agree just how messy that all looks, and that there’s a better way! There’s no harm in having a coffee with multiple recruiters, but then pick one, just one, based on the trust you felt you could place in them, the competence they displayed and their track record. Exclusively negotiate a retained programme of recruitment with protection built in so as to minimise your risk. This could perhaps look something like the below:

· A third of the negotiated fee up front to begin the search, with a 50% refund if the next stage of recruitment (shortlisting) isn’t achieved

· A third of the negotiated fee on successful shortlisting. Remember, you’ll only pay the final third of the negotiated fee if you hire from the shortlist. You also maintain ‘ownership’ of the shortlist so should recruitment be placed on hold, you can go back to those candidates on the shortlist without paying a further fee

· The final third of the negotiated fee on successful start of a shortlisted candidate with a negotiated rebate period in place

Some more truths:

· If recruiters know they’ll get paid (because they’re exclusively searching), they’ll do the work and not only that, the overwhelming majority will do it bloody well

· You’d better believe that the dangling carrot of invoices as they reach the next stage means the recruiter will do what’s necessary to get there

· You’ll save a hell of a lot of time, effort and thirst for life only dealing with one recruiter, facts are facts!

· If they don’t do the work, they don’t get paid anymore and you’ll get a refund for the work they didn’t do, thereby minimsing your financial risk exposure

Westray Recruitment Consultants are huge advocates of relationship building based on parity, competence, accountability and delivery and on that basis, retained recruitment offers the best solution in the current labour market.

To discuss this, or any other recruitment related topic, please don’t hesitate to get in touch!

Matt Hickford

Marketing

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