As we adjust to the ‘new normal’ of the post-pandemic era, organisations and their HR teams are facing a new set of challenges around recruitment. The strongest jobs market in almost five decades has caused a “staggering” jump in the number of occupations suffering from acute worker shortages, as employers struggle to fill openings amid near-record low levels of unemployment (Financial Review Oct 2022). Employers are competing like never before in an increasingly candidate-driven market.
This trend has propelled the need for stronger third-party recruitment partnerships and changed the way hiring managers are working with recruiters. Those who are wanting to stay ahead are partnering with their agencies on a long-term retained basis in mutually beneficial agreements across all levels within the organisation. The fact is, retained search is not just being used for C-suite level anymore.
Contingent recruitment refers to a transactional recruitment service in which the external agency is only paid once a qualified candidate is placed. From a financial-driven hiring managers perspective, working on a contingency basis with a recruiter is a risk-free and cheaper alternative.
Working with a recruiter on a contingent model can be a gamble. It may be a low-cost model, but it’s also a low service model. A Recruiter is never going to be fully invested in the hiring process because working on a contingent model against competition means chances they will be paid are slim. Job boards are still not receiving high quality applications and therefore they will be solely relying on their database and any new referrals that may come their way. Contingent recruiters also will not use the same resources or access the same talent pools as partners who will run a search.
An even bigger assumption is that engaging with multiple agencies will be better. Hiring managers think that by doing this they’re casting a wider net, mitigating risk of not finding someone, will get different approaches and perspectives and therefore be able to make the most informed decision. In some instances, this may work. But if we’ve learnt anything over the last few years it’s that the talent market pool is small.
From the candidate’s point of view, it can be extremely off-putting to receive multiple requests for the same opportunity from different recruiters. Not only does it make the company look desperate, but it also reduces the value of their brand and reputation. It’s important for companies to maintain a good image when recruiting, as this can be a deciding factor for candidates when considering a new role.
By nature, however, people like exclusivity. It makes them feel special and appreciated and gives them the sense that they are unique and valued. They also like the feeling of being part of something that not everyone has access to. Making a job opportunity exclusive can provide a sense of status and prestige. Working in a retained model ensures employer brand is top of mind as they present a professional and organised approach.
Working on a retained basis means the recruiter will work exclusively on the role and charge an upfront fee to the client to conduct a search. Whilst it has always been seen as expensive, that’s only because up until a few years ago retained search was only used for Senior or C-suite roles. The higher the salary, the higher the fee. Nowadays however, clients are choosing to partner retained for roles at all levels. Why, you ask?
Retained recruiting (often referred to as “head-hunting”), is a targeted recruitment approach in which the recruiter works very closely with the client to determine their needs and create a specific strategy tailored to attract the very best candidates not only on the market, but in the market. This service model is extremely beneficial when hiring for:
- Hard-to-fill roles
- Confidential assignments
- Positions with very particular specialisations
- When there is a tight labour market
Head-hunters will widen your talent pool by attracting passive candidates that haven’t been exposed to your job ad. They often have established networks in specialist areas and are more experienced and knowledgeable about the industry. They tend do have a more proactive and consultative approach and a database of carefully cultivated candidates within reach. They also conduct written assessments, case studies, talent mapping and provide data analytics throughout the process. Most importantly they provide transparency. When engaging with a Search firm you are often provided with a project team; including a Consultant, Search Director, Researchers and Administration support. With higher touch points throughout the process, alignment is ensured and therefore the likelihood of finding great talent in a tight labour market is much, much higher.
If you’re only looking for a short-term solution, then contingent services might work. But if you are serious about getting the best results long-term and you know you need a more specialist and comprehensive approach to find the right candidate, choose to work retained. Whichever option you decide, just remember how important it is to maintain your company image in the candidate market.