Table of Contents
Table of Contents
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What Is Retained Search?
A retained search is a type of recruitment outsourcing where an upfront fee or retainer is paid to a recruiting or staffing agency in order to “retain” them to search for a given role. Retained search is often termed “headhunting,” and primarily focuses on proactively reaching out to passive candidates (people who are not actively job searching). Retained search is a specialized type of recruitment outsourcing primarily used for executive or other key roles within an organization.
Contingent vs Retained Search
Retained search can be thought of as the opposite of contingency recruitment, which is a no-win, no-fee (i.e., you don’t pay if the role isn’t filled) style of recruitment outsourcing and may be used for a variety of roles.
Retained searches are conducted on an exclusive basis, which means that the sole responsibility and access to fill a given role is given to the retained search recruiter. Contingency recruitment, on the other hand, may involve several recruiters from a contingency agency or even several contingency agencies, which means a lot of recruiters working on a role; this can be both a pro or a con depending on the type of hire.
What Does the Retained Search Process Look Like?
The basic mechanics of a retained search are the same as a regular recruitment process. Where retained search takes on more depth is in the strategy that happens as part of a retained search.
During the intake meeting or launch meeting, the retained agency will develop an in-depth profile for the candidate as well as craft a custom plan to find this person.
The steps in a retained search may vary slightly depending on the specific needs of your organization, but here is a basic framework of what to expect.
- Engage the agency.The first step will be to set up an initial meeting to determine if the role you are looking for fits the recruiter’s expertise, experience, and network.
- Intake call. If the retained search firm is a good fit, you will conduct an intake call to develop a job profile, target candidate profile, and recruiting strategy.
- Initial search. The retained firm will conduct their initial search according to the strategy and process you have agreed to.
- Qualifying prospects. The search firm will build a pipeline of potential applicants to interview. At this stage, they will determine if they have a strong enough pipeline to begin initial interviews or if more time is needed to build a stronger pool of potential applicants.
- Initial interviews. Once the firm has established a strong pool of potential applicants, they will conduct in-depth interviews with the prospects to evaluate them against the predetermined job criteria.
- Internal interviews. After conducting initial interviews, the agency will narrow down their finalists and present them to your team. Your team will interview those finalists and, ideally, find the individual you want to hire.
- Extending the offer. The retained search recruiter and your organization will partner closely in extending the offer to ensure that all parties are being presented something that will mutually benefit everyone.
Is Retained Search Helpful?
Retained search partnerships are most helpful when the role you are filling has a niche skill set or executive function that will not generate incoming applications and requires an intentional, proactive approach to passive talent. Let’s consider other pros and cons.
Pros of Retained Searching
- Expanded network. Retained search partners offer access to their personal network. Experienced executive recruiters have spent years building personal networks with professionals, civic institutions, interest groups, and other organizations that give them access to people who are not actively applying for executive roles.
- Additional expertise. Your internal recruiting team and contingency recruitment partners may be well equipped to hire recurring skill sets and some niche roles, but they may not have the network and expertise when it comes to proactively headhunting high-level executives who are not actively looking for a new role. Retained search recruiters specialize in building in-depth candidate profiles and understand how to methodically work through their networks to fill critical roles within an organization.
- Increased confidentiality. The process to hire an executive into an organization requires a great amount of consideration; executive roles may not even be posted online, and due to the complex nature of the executive legal landscape, a great amount of confidentiality is required. Outsourcing your hiring efforts for an executive role through a retained search removes pressure from your internal stakeholders and human resources team and allows the search to move forward with discretion.
- Proactive. Retained search operates in the opposite method of traditional recruitment. Traditional recruitment posts an open job online, reviews incoming applications, screens for the right fit, and then interviews the best applicants. Retained search relies on a proactive outbound approach to potential leads and prospects. The right people for these types of roles will not be applying, which makes the proactive outbound strategy necessary.
- More energy devoted. When you work with an executive recruitment agency, not only are you allowing them to work exclusively on your open position, they are also exclusively working on that role. You do not have to worry about them splitting their time and energy on other organizations; you will have their full and undivided attention.
- Long-term relationship with the agency. While you may not be hiring a new CFO every month, having a long-term relationship with an executive recruiting agency that understands the nuances of your culture, mission, and market strategy will help you hire more quickly when your organization grows into the next leadership role.
Cons of Retained Searching
- Costly. The typical fee for a retained search is 30-35% of the annual salary of the individual being hired. Since retained search is primarily used to find and place six-figure executive positions, this is a costly approach.
- For a quick example, assume you are hiring an executive who will have an annual salary of $150,000 USD. To retain an executive search partner will cost your organization $45,000 dollars to place one person. The other important factor to remember is that this is paid on a retainer, not on a successful candidate hire.
- Lengthy process. A retained search does not happen overnight. No matter how they are recruited, hiring senior-level executives into an organization is a lengthy process. When planning your recruitment strategy for senior-level roles in your organization, make sure to calculate the cost of the length of the process.
When to Use Retained Search
Retained search offers many benefits and can help your organization hire the right person for critical, executive, hard-to-fill, and niche roles in a timely manner. Let’s look at some of the most appropriate instances in which to use retained search.
Hiring a new C-suite executive is the most critical and impactful type of hire an organization will make. Whether it’s expanding to a new C-suite role or replacing an existing member, this is the type of hire that makes news articles. Retained search partners are experienced, C-suite headhunters.
When your organization is ready to part ways with a senior leader in your organization and does not have time to allow that role to go vacant while a replacement is found, you may want to find the replacement and have them ready to start when the termination happens. Obviously, you cannot post the job online, and the search usually cannot happen internally. The candidates or prospects cannot even be entered in your applicant tracking system. This type of situation makes sense to contract with a retained search agency.
Access to Senior Leaders
Retained search executive recruiters are able to start conversations with high-level leaders that internal recruiters cannot. Many leaders who are very visible and impactful within their organization cannot risk anyone knowing that they are speaking with other companies. These types of leaders do not want their information sitting in applicant tracking systems, and they will not openly interview. Even if a leader is interested in making a move to another organization, they may not be willing to speak to an internal recruiter. They may only be willing to speak to an external executive recruiter.
Getting Started With Retained Search
Even though executive recruiters are experienced in filling hard-to-fill, niche, and high-level roles, their success is only as certain as the amount of coaching, support, and direction that you give them. Here are a few tips to begin a successful retained search.
Tip 1: Don’t Rush
Develop a timeline and strategy that clearly defines the needs of your organization and is flexible enough to give the time to find that individual.
Tip 2: Personalize the Approach
Contingency recruiters work to fill as many roles as possible with as many organizations as they possibly can. Retained search is the opposite: their entire time, talent, and attention is focused on filling your open role. Given how critical this role will be to your organization, this strategy is essential. Use that focus of attention to your advantage and take the time to properly and thoroughly debrief with the recruiter and develop a recruitment strategy personalized to your company’s needs.
Tip 3: Intake Call
An intake call is a powerful tool. The more time spent upfront answering questions and filling in details, the more successful your retained search will be.
The retained-search recruiter will spend time learning the culture of your organization, the expected outcomes of the person in this role, the attributes that will lead to that success, and the specific experience needed for the success of your organization. You will spend time pointing them in the right direction of specific target companies you want to bring someone over from or companies to avoid.
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Questions You’ve Asked Us About Retained Search
Tyler empowers Talent Acquisition professionals, HR business leaders, and key stake holders to develop and execute talent management strategies. He is igniting the talent acquisition process through: team building, accurate time to fill forecasting, driving creative talent sourcing, and fine-tuning recruiting team effectiveness.