Demystifying Contingency vs. Retained Searches

The difference between a retained and contingency search is a question that is often asked by a job hunter or employer. It is important to know what kind of firm you are working with because it affects what you can expect from them and how to use them effectively.

To get the answer to this question, I asked Jill Knittel, President at ER Select and COO at Employee Relations (ER) Associates based in Rochester NY to explain the differences between contingency and retained search firms.

Here is Jill’s response:

In my opinion, the biggest difference in retained vs. contingent is not necessarily whether it is exclusive to the search firm, but how the payment terms are agreed upon by the search firm and their client company.

For retained searches, they typically handle higher level positions; a search firm is paid part of the fee up front for their costs and time spent on the search.

Contingent searches are paid by a client company when a search firms fills a position with one of the candidates they have represented (typically on the first day of employment). A contingent search DOES NOT always mean that the client is using multiple search firms. There are many contingent searches ER Associates works on where we serve as the only firm on the search.

Retainer searches/payments are sometimes harder to get approval on because of the significant dollar outlay required upfront and contingent exclusive searches are easier to get approval for which sometimes makes the decision to do a contingent exclusive vs. retained.

The determination that I use on whether to commit to a ‘retained search’ for a particular search vs. a contingent exclusive is the difficulty of the search (i.e. location of the position, skill set needed, level of the position) and the sheer horsepower and cash investment that the recruiter will have to spend on finding the right candidate.

Many retained searches are national/worldwide and include a large amount of time spent on things including: plane flights, travel accommodations, tours of Rochester, school appointments, coordination with realtors, doctor referrals and obviously interviews, dinners, etc.

Additionally, retained searches are iron-clad commitments by the company that they will fill the position with one of a search firm’s candidates in a partnership-type relationship (so long as the search firms do everything they promise to do).

What are the implications for job hunters? Does a job hunter know when they might get shut out of a search with a firm? Find out more in our next article, “What Job Hunters Need to Know about Search Firms“.

  1. Excellent post! I had no idea that there was such a thing as an exclusive contingency search, and I’m happy to know that such a relationship exists (happy, both from a candidate’s perspective as well as a potential future user of exective search services).

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