24 Feb What Is A Retained Executive Search Firm?
As a C-suite executive, you know all too well the importance of filling crucial leadership positions with the right talent.
But with so many options out there, it can be overwhelming to determine which type of executive search firm is best for your organization. That’s why we’re here to demystify the world of retained executive search firms and help you determine if this type of partnership is right for you.
What Is The Difference Between Contingent And Retained Search Firms?
One of the first questions many companies have when searching for an executive search firm is the difference between a contingent and retained search firm.
Both types of firms have their own unique strengths and weaknesses, and understanding these differences can help you make an informed decision when choosing a partner to help fill your company’s critical leadership roles. In this section, we will break down the key differences between these two models, including their business structures and average fees.
Contingency-Based Executive Search Firms
Contingency executive search firms operate on a pay-for-performance model, only receiving payment once a successful placement is made. These firms often compete for non-exclusive recruiting contracts and bear the expenses of the executive search process.
This business model can lead to a focus on speed and volume rather than quality when it comes to identifying and attracting top-tier talent for niche or specialized roles.
Additionally, the contingency model may result in less attention and priority being given to challenging or competitive placements. On average, contingency executive search firms charge 20-30% of the role’s first-year total compensation.
Retained Executive Search Firms
Retained executive search firms take a different approach to executive recruitment by working closely with clients to gain a deep understanding of their unique needs and goals.
They act as strategic partners (rather than just service providers) and invest in analyzing the client’s business challenges, company culture, and overall mission. This enables them to identify and place multiple executives who not only fit the role, but also align with the organization’s goals and accelerate its growth.
Retainer-based firms also handle all expenses related to the executive search, selection, and onboarding process. They typically charge 25-35% of the role’s first-year salary, making retained executive search partners a cost-effective option when considering the multi-faceted value they bring to the table.
What Are The Benefits Of Using Retained Search?
Retained executive search firms are unique and essential players in the global talent acquisition market. They operate more like business consultants than traditional recruiters and specialize in providing bespoke executive search experiences that generate one-of-a-kind placements.
Unlike contingency search firms, retained search firms integrate into their clients’ organizations to gain a deeper understanding of their organizational structure, workflow, company values and culture, and effective leadership styles. This strategic discovery process enables retained search specialists to create a more refined and effective search, selection, and evaluation criteria, resulting in smaller but more qualified pools of talented candidates that represent performance, leadership, and cultural fits.
Unlike contingency search firms, which work on a per-project basis and prioritize speed and volume, retained search firms work exclusively with a small number of clients and focus on generating high-quality placements. They also have the added benefit of being able to present exclusive candidates to their clients before they are available to the general market. This ensures that clients of retained search firms have the best chance of hiring top talent before their competitors.
How Medallion Stands Out In Executive Search
Medallion Partners is a top-tier executive search firm with more than 15 years of experience generating world-class placements.
Our unique combination of tried-and-true talent acquisition strategies, diverse networks, specialized resources, and attentive, personalized client experiences set us apart in the industry. With our blend of “Big 5” resources and boutique-style market insights, we are able to generate exceptional placements across sectors and continents. Contact us today to learn more.