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Why Recruiters Prefer Retained Contracts

Ken Sundheim
 


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The main difference between a contingency staffing agreement between headhunting firm and hiring company and a retained executive search agreement are payment terms including recruiting payment guarantees between the employer and third-party headhunter.

For instance, retained search contracts will give the recruiting company and upfront fee prior to human starting the search and, typically this money is not refundable regardless of the outcome of the recruitment endeavor.

On the other hand, contingency recruiting contracts have a clause where the hiring company only pays third-party recruiter if and when a job applicant who met Stefan firm recommends is hired by the company and remains employed by that organization for typically a prorated 90 day guarantee.

Obviously, the employment guarantee and number of days the employee who is just staff has to remain at the company for the contingency recruiting contract to be paid varies with company, industry and other recruitment variables.

What Do Most Staffing Agencies Prefer? For the reason that retained search agreements come with an upfront payment given to the recruiter prior to even the hiring company interviewing job applicants, the majority of headhunters would much rather have retained recruiting agreements from their hiring clients as opposed to staffing on contingency contracts.

When working on retained search agreements, for most headhunters the recruitment process proves to be a little less stressful as when firms are given contingency contracts, they are typically up against multiple companies to staff that particular job seeker which makes time of the essence. This is simply because if the headhunter does not staff the employee on a contingency contract, regardless of how hard they worked, that recruiter will not receive any monetary compensation from the hiring company.

Another aspect of retained search contracts that many recruiters like when comparing the headhunting agreement to that of a contingency staffing contract is that most retained search agreements come with what is called indirect routing industry as exclusive recruitment contracts.

Essentially, this means exactly what it sounds like as some recruiters will receive contracts that state that they are the only staffing agency working on the particular recruitment project.

The main difference between a contingency staffing agreement between a and hiring company and a retained executive search agreement are payment terms including recruiting payment guarantees between the employer and third-party headhunter.

For instance, retained search contracts will give the recruiting company and upfront fee prior to human starting the search and, typically this money is not refundable regardless of the outcome of the recruitment endeavor.

On the other hand, contingency recruiting contracts from what our Boston sales recruiters Boston marketing recruiting have a clause where the hiring company only pays third-party recruiter if and when a job applicant who met Stefan firm recommends is hired by the company and remains employed by that organization for typically a prorated 90 day guarantee.

Obviously, the employment guarantee and number of days the employee who is just staff has to remain at the company for the contingency recruiting contract to be paid varies with company, industry and other recruitment variables.

What Do Most Staffing Agencies Prefer?

For the reason that retained search agreements come with an upfront payment given to the recruiter prior to even the hiring company interviewing job applicants, the majority of headhunters would much rather have retained recruiting agreements from their hiring clients as opposed to staffing on contingency contracts.

When working on retained search agreements, for most headhunters the recruitment process proves to be a little less stressful as when firms are given contingency contracts, they are typically up against multiple companies to staff that particular job seeker which makes time of the essence.
This is simply because if the headhunter does not staff the employee on a contingency contract, regardless of how hard they worked, that recruiter will not receive any monetary compensation from the hiring company.

Another aspect of retained search contracts that many recruiters like when comparing the headhunting agreement to that of a contingency staffing contract is that most retained search agreements come with what is called indirect routing industry as exclusive recruitment contracts.
Essentially, this means exactly what it sounds like as some recruiters will receive contracts that state that they are the only staffing agency working on the particular recruitment project.

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Pictured below: Ken Sundheim CEO of KAS Recruiting

Ken Sundheim

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