Retained vs contingent - which works best?

Not all recruitment companies operate in the same way. For employers, knowing which recruitment process is best at the outset can really help increase their chances of finding the right candidate quickly and efficiently. The main difference between recruitment firms is that some are retained by their clients to recruit on their behalf, while others operate on a contingency basis.

Retained recruitment companies work on an exclusive basis, making them the only recruiter to work with the client and fill that particular role. There is a financial commitment from the client on commencement of the assignment and other key milestone payments until the candidate starts.

Contingency recruitment works slightly differently. Here, the employer will ask multiple recruitment agencies to search for and submit the best candidates, with the successful agency getting paid and the rest simply being unsuccessful.

So, which works best? At SOS Executive Search, we believe – as do many others – that employers who work with retained recruiters will see significant benefits compared to contingent agencies. This belief is born out by research from The REC, which has found that retention rates after 12 months of employment are 90% when that candidate was placed by a retained recruiter, compared to around 70% when they were found by a contingent agency.

But why is this the case? Put simply, retained models work better because their candidates generally go through a more rigorous process, with the agency working in partnership with client and talent alike to make sure that they will be a perfect fit before the job is accepted.

Working with just one agency means the employer can spend more time working with that firm to properly communicate their desired candidate, the company culture and exactly what they need, rather than having to waste time having the same conversations with multiple businesses, which inevitably leads to key details being missed.

For agencies, knowing that they are one of many companies trying to fill that vacancy can also cause some to put forward less suitable candidates simply in the race to be ‘first’ since they know they will only get paid on success, which may also be why, 12 months on, fewer of their placed candidates are still in the role.

That’s why at SOS we prefer to work on a retained basis. This creates a partnership between us and our clients, with a financial commitment and scrutiny on both sides. Our rigorous search process means we will do a deep dive into the market, our client’s needs and what they can offer the candidates as well, ensuring a good cultural fit for both sides that is far more likely to lead to the successful candidate staying in the role for a long time.

If you’d like to learn more about what SOS can bring to your business, please contact us today on 07815 009 524 or at [email protected]