Choosing the proper recruiting model to work with your company is not an easy task.  Many companies feel that all recruiting models are the same; when in fact there are vast differences.  Let’s start with an explanation of the two most common recruiting models:

Contingency Recruiting-this is the model that most companies know about and use.  Many companies feel that it is the only recruiting model available.  Contingency recruiters represent the candidate and will submit the same candidate to a number of companies in hopes of placing this candidate anywhere.  The contingency recruiter is paid his/her fee (generally 25% of the candidate’s annual base salary) ONLY if the candidate is placed at a particular company.  The downside to this recruiting model is that contingency recruiters are basically in a race to “flip” candidates over to as many companies as they can.  The recruiter’s interest lies with the candidate, and he/she does not have the company’s best interest in mind.  Many companies use multiple contingency recruiters at the same time which only serves to compound the problem.

In my opinion, contingency recruiting has a very low level service level, and statistics have shown that candidate attrition rate is high because the contingency recruiter is only interested in the placement and not the best fit for the company.

Retained Recruiting-the cost of using the retained recruiting model is the same as contingency recruiting (generally 25% of the candidate’s annual base salary), but, in my opinion, offers a much higher level of service and customer satisfaction.  In a retained recruiting model, the client company “engages” the services of the retained recruiting firm by paying an upfront retainer to the firm to begin the search (generally 1/3 of the total fee with the balance of the fee (2/3) due upon the placement of the candidate).  The retained recruiting firm will sit down with the company and do a through analysis of the position’s requirements and also understand your company’s culture.  By doing this, the retained recruiting firm can offer a much better level of service to both the candidates and client company.  This is because the recruiter is ONLY representing the company.  In most cases, a good retained recruiter will tell you NOT to hire a certain candidate because of a poor cultural fit with client.  I doubt very much if that ever happens with a contingency recruiting firm.  A good retained recruiting organization will serve you as a “recruiting partner” and not just as a vendor, looking out for your company’s best interests and also representing your company well in the recruiting marketplace (an important feature to have).

Statistics have also shown that candidates placed via a retained recruiting model have a much higher retention rate versus the contingency model.  In addition, the satisfaction level with both the candidates and the client company are higher in a retained model than with a contingency model.

If the retained recruiting model is appealing, interview several firms to learn more about their capabilities and experiences.  Since it will serve you best to have one retained recruiting firm to be your “recruiting partner”, it is important for you to make sure that there is chemistry with that firm.  Remember, this firm will be an extension of your company and will be representing you in the recruiting marketplace.

Partnering with the proper retained recruiting firm will not only lower your overall recruiting costs but will also result in a much higher quality of candidate with an overall better retention rate.