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Contingency vs. Retained Recruitment

It’s like Rugby – a game of two halves!

The Rugby World Cup 2015 is approaching its climax and mighty sporting battles are being fought and won (or lost) on well-worn pitches all across the UK. Mind you, the spectacle has been somewhat tarnished by the absence of any competition from the Northern Hemisphere….but we won’t dwell!  

In similar vein, the battle for talent rages across the UK, as a plethora of mega building and civil infrastructure projects get underway simultaneously, creating skills shortages far and wide – and recruitment winners and losers.

There are basically two methods through which Maxim can recruit for you a winning construction team; “contingency” and “retained”. Read on to find out which one is right for you.

Contingency Recruitment (The Scrum)

(contingent - a future event or circumstance which is possible but cannot be predicted with certainty)

There are actually two future events here which are possible but with no certainty in outcome:

  1. The urgency and importance the employer feels about filling the job role
  2. The right candidate being found by the recruiter and passed to the employer

Let’s assume the client needs to fill a role. It’s up to the recruitment consultant to ‘qualify’ the job vacancy in terms of the role specification, the type of project(s), future prospects, the salary and benefits being attractive, as well as having a view of the reputation of the company. If the consultant feels confident all these parameters are realistic and the role is “fillable” then a good deal of time and effort will then be expended to search for the right candidate in this “no win no fee” recruitment “scrum down”.

Contingency recruitment often competes with other recruiters and the employer’s internal HR team who are all looking for a suitable candidate at the same time, often in pretty similar places. The trick is to present the best candidate you can find faster than the other recruiters to secure your contingency fee. The power is very much in the hand of the employer and the recruiter can sometimes do an incredible amount of work for no financial reward at all.

When Contingency Recruitment Makes Sense

For the Employer

  • There is no financial risk as no fee is due until a hire is made.
  • The employer may change his mind and not employ!
  • A contingency search agreement is easier to agree & sign off.
  • When there is no urgent or critical need to fill a role and the employer would just like to see what candidates are in the market.
  • Candidates are currently in process but the employer wants to make sure they are made aware of the very best available individuals before they decide who to employ.
  • There is a high volume of hires needing multiple recruiters in order to manage the volume.

For the Recruiter

  • A contingency search agreement is easier to agree & sign off.
  • The recruiter may be looking to secure an interview for a strong prospective candidate with as little red tape as possible.
  • With no financial commitment from the client, the recruiter doesn’t want his sense of urgency to be higher than that of his client.
  • The recruiter is not sure the candidate the client is looking for truly exists so doesn’t have to make any real commitment to succeed.

Typical examples where contingency recruitment might be sensible; “Assistant Quantity Surveyor”, “Project Manager”. If you are interested to know more about these type of roles:

Assistant Quantity Surveyor Jobs

Project Manager Jobs

What are the costs?

The recruiter makes nothing whatsoever from the process of contingency recruitment unless they are successful i.e. the candidate is employed by the client. Fees vary between 15%-25% and typically reflect a percentage of the candidate's starting annual salary package and fixed allowances and reflect factors such as the recruiter's experience level and reputation to deliver.

Retained Recruitment (The Rolling Maul)

(Retain - continue to have (something); keep possession of)

 Sometimes known as head hunting, with retained work, the employer pays the recruiter in stages to “retain” him to the cause. This will guarantee from the recruiter dedicated resources and a herculean effort with the utmost due diligence to find the most suitable candidate within an agreed timeframe.

The recruiter will work closely and exclusively with the employer using an agreed methodology to perform a rigorous process which would yield a shortlist of say 3-5 highly suitable candidates form which the employer chooses one.

Retained recruitment in the construction sector often involves sourcing from the top-end of the recruitment market where potential candidates are often not actively seeking new employment and where salaries are high, or relate to hard to fill niche roles where suitable candidates are scarce. Typical examples of such jobs might be “Associate Director (Regional Manager)” or “Senior Forensic Planner”

If you would like to know more about these type of roles:

Director Jobs

Planning Jobs

When Retained Recruitment Makes Sense

For the Employer

  • When the employer needs to fill an urgent and critical role where the benefits of early and successful hire (e.g. corporate or project cost savings / preventive maintenance etc.) far out strip the costs of recruitment.
  • When the employer needs to ensure that someone is held accountable to fully cover the market place on their behalf.
  • When the employer wants a tremendous amount of market research performed.
  • The employer wants a truly consultative approach.

For the Recruiter

  • Fees up front!
  • You will have the full commitment of the employer to partner with you to solve his recruitment problems.
  • You will have exclusivity which will avoid the frustrations and inefficiencies that come with multiple recruiters and the employer’s internal HR team working on the same search.
  • The chances of repeat work from the client is very high.

What are the costs?

Typically fees are a shade higher than that of contingency recruitment at 25-35% but still reflect a percentage of the candidate’s annual salary package and benefits. The fee is typically divided into 3 stage payments:

  • Stage 1 – 1/3 fee, paid in advance
  • Stage 2 – 1/3 fee, paid upon presentation of shortlist of candidates.
  • Stage 3- 1/3 fee paid upon commencement date of candidate

Are you winning?

If you’re an employer hungry for talent, but behind, “inside your own 22” and the clock’s ticking then please consider a retained search to fill that elusive role. The Maxim team has successfully converted a number of retained searches for clients across the globe and confident in their ability to deliver. If you would like to know more, please get in touch with Richard on richard@maximrecruitment.com.

Good Luck and may the best team win!

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