Retained executive search firms provide dedicated recruitment services to businesses of all sizes and across all industries. Rather than relying on an in-house HR team to handle executive recruitment on top of its everyday obligations, many businesses turn to a retained search firm or headhunter for help with their executive hires.
Not only can a retained search firm take the time and stress of executive recruitment off of your HR team's plate—but it can also optimize the quality of your candidates while ensuring that you have a dedicated executive search team working with you on an exclusive basis. And while executive search firms may not be the only option for outsourcing your hiring, retained search firms offer a number of benefits when compared to contingent or flat-fee recruiting methods.
Retained executive search firms charge a monthly retainer in exchange for their dedicated recruitment services. This monthly fee is paid regardless of whether an executive hire is made that month or not. This differs from the fee structure of a contingent search firm, where a fee is only charged when a placement or hire is made.
This type of recruitment service differs substantially from that of a contingent search firm, where recruiters are only paid when a hire is made. At that point, contingency search agencies typically charge a percentage of the new hire's first-year salary (usually anywhere from 20%-30%).
Other search models, such as flat-fee recruitment agencies, charge one upfront fee (rather than an ongoing monthly fee, or a percentage of the candidate’s salary) for executive placements.
While the specific services covered by a retainer in an executive search may vary from one agency to the next, it is common for the following services to be included in this type of search model:
Meanwhile, exactly how much executive search firms charge can vary from one company to the next. Many different factors, including specific services provided, search methodology, and even the executive positions for which you're hiring can affect your monthly retainer.
While retained executive search is far from your only option, this exclusive search model offers numerous benefits that flat fee and contingency recruiters simply cannot. With a better understanding of the advantages of retained executive search services over contingency executive recruiters, you can make a more informed decision regarding your company's next senior-level hiring process.
The amount of time and effort that goes into finding the right executive talent for the job can be significant. This is especially true when you consider the high stakes that are at play when making an executive hire; you need to put in the work and due diligence when handling an executive search to avoid making the wrong hire for the job.
As tempting as it may be to cut corners and simply rely on your in-house HR team to handle your executive recruitment needs, the reality is that even very experienced and knowledgeable HR professionals often don't have the in-depth understanding of the executive recruitment process that is needed to handle the search efficiently and cost-effectively.
By turning to a team of executive recruiting experts, you can not only ensure that the recruitment process is handled properly—but that the rest of your team can focus on other critical aspects of their jobs.
To save time, money, and resources, many businesses keep an executive search firm on retainer. When you consider that the retainer for these services is usually just a few thousand dollars per month, it's easy to see why this makes more financial sense than hiring even a small HR team with salaries and benefits.
Retained executive recruiters understand the nuances and challenges that go into recruiting, interviewing, and even negotiating benefits with a senior-level executive. These professionals also stay on top of the latest market trends across all industries, job titles, and locations to provide you with the best C-suite recruiting services possible.
Talent acquisition trends change quarterly—and staying up-to-date on the latest senior-level compensation trends or other market changes can be challenging when you have other obligations on your plate. When you turn to a retained executive recruitment service, you can rest assured that your team of search consultants has already done their homework and will be able to handle the recruitment process with confidence, putting their industry expertise and knowledge to work for your business.
Unlike other recruiters (such as contingency-based recruiters) who may have more experience with entry- to mid-level hires, executive search firms speak to professionals in C-level and executive roles every day. As a result, they've developed high-level contacts in nearly every industry imaginable and have an extensive network of qualified candidates to draw upon at any point in time.
No matter what kind of skill set or qualifications you're looking for in an executive hire, a retained search firm can quickly identify a shortlist of qualified candidates that meets your company's specific needs.
Because retained executive recruiters are constantly in contact with industry professionals, they may also have access to passive candidates and referrals that recruiters without established industry connections simply don't. All of this can expedite your recruitment process while giving you access to only the best candidates.
In many ways, retained firms become an extension of your own company, essentially acting as an off-site HR team that always has your best interests in mind. These professionals take the time to understand your company culture and unique needs when it comes to finding the right candidate—and this will reflect in every aspect of the search process.
All of this is especially relevant when you consider the growing importance of company culture in the hiring process and beyond. Consider, for example, that 88% of job seekers now list a healthy work culture as being vital for success. Meanwhile, retention rates at companies with a strong company culture are nearly 3.5 times higher than in businesses that are lacking in this arena.
With all this in mind, having an executive recruiter on your side who truly understands your company's culture can benefit your business in a number of ways. These recruiters will ultimately be able to find the ideal candidate for your executive-level position who is a strong cultural fit and aligns with your company values. This, in turn, can lead to stronger leadership and improved retention rates across the board.
An experienced executive recruitment team also understands that your brand is your biggest asset and must be protected at all times. As such, retained executive recruiters can go beyond simply finding candidates who look good on paper to secure top executive candidates whose personal and professional backgrounds truly align with your company's mission and vision. By taking the time to garner an in-depth understanding of your brand and its identity, retained search partners can help you preserve those core values throughout every step of the process, and far into the future with the right hire.
Recruiting for executive-level positions often requires a certain level of discretion and confidentiality that your in-house HR team (or even an inexperienced outside agency) may not be in a position to maintain. This is especially true in situations where your business may have plans to replace current executive talent and needs to handle the situations with as much tact and confidentiality as possible.
Retained executive recruiters have plenty of experience with these nuances of senior-level recruiting and talent acquisition; they know the inherent need for discretion that comes with replacing a current executive, succession planning, or even handling executive salary negotiation with a potential candidate. Meanwhile, if you are looking to replace a current senior executive (such as a CFO or Vice President), having a search firm on retainer won't raise suspicion in the same way that bringing in a contingency firm would.
Last but not least, executive search consultants can provide support and guidance long after the hiring process is complete. Specifically, retained search firms can assist with onboarding and everything that comes along with getting an executive settled into their new role with confidence.
More specifically, a retained executive search firm will go above and beyond to maintain communication long after salary negotiations have ended and your new executive has been formally hired. These recruiters will stay in touch with both you and your new hire to ensure that they have the resources they need to succeed and thrive in their role.
This is something you simply won't find in a contingency-based recruiter because, with this type of service, your relationship with your recruiter essentially ends once your payment is made. Since retained recruiters work with your company on an ongoing basis, you can get the continued support that you need to optimize your new hire's success with onboarding assistance and more.
There's no shortage of options out there when it comes to executive recruiting services. However, when you have the choice between an ongoing partnership with experienced recruiters and a one-time, one-and-done service, your business will always stand to benefit from the exclusivity and continuous support of a retained search partner.
At TDS Global Solutions, we've helped hundreds of companies make more than 1,000 executive placements—and we're committed to helping your company find its next great leader. Drop us a line today to learn more about what we can do for your company or schedule a call to get the conversation going.