How to Hire the Best Recruiter for Your Search

Engaging a recruiter to help with talent acquisition is a big deal. You have essentially hired a recruitment agency to communicate your firm’s value proposition to the individuals that make up your industry.

Understanding the forms of recruiter engagement will help in qualifying the right headhunter to fill your unique search needs.

Recruiter Engagement Overview

Here are the basic engagement options defined along with the associated factors that influence the search.   

Retained Search

Definition: Paying a fee up-front, and sometimes in installments, to initiate and progress a search.

Influencing Factors:

    • Credibility
    • Time-to-Fill
    • Consistency
    • Streamlining Interaction
    • First Right of Refusal
    • Reporting
    • Terms

Exclusive Contingent Search

Definition: One recruiter exclusively works on a search, no engagement fee until the search is filled.

Influencing Factors:

    • Time-to-Fill
    • Consistency
    • Streamlining
    • Interaction
    • Terms
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Non-Exclusive Contingent Search

Definition: No commitment to a recruiter, multiple recruiters working on one search, no engagement fee until the search is filled.

Influencing Factors:

    • No Unified Messaging
    • Flood of Unqualified Resumes
    • Breakdown of Process
    • Confidential Recruiting
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Engagement Options Dissected

To help you better understand which form of recruiter engagement is most applicable to your needs, we’ve broken down each of the above concepts. Context into when each form of partnership is appropriate, along with guidance on how to hold your recruiting partner accountable are highlighted.   

Retained Search

Retainers can come in varying forms. There is the thirds model where the estimated recruiting fee is broken down into three payments. The first payment is due up front to initiate a search, the second payment is paid after an agreed upon milestone and the final installment is released upon completion of the search.

An alternative option is an agreed upon sum, paid up front, to initiate the search.  This initial payment is applied to the fee after the search is filled.

Fees vary significantly. Established executive search firms typically charge between 30-33% of a candidate’s entire compensation plan where others may charge 20-30% of a candidate’s first year base salary.

Why financially commit to one firm when other recruiters don’t charge a fee until the job is done? Simply put, you get what you pay for. Read the influencing factors below.

Credibility

When executives and other senior, specialized candidates are being recruited, they will often ask the recruiter if they have been retained on a search. If the answer is “no” the recruiter loses credibility and, by default, so does the employer that sanctioned the search.

This makes sense; executives contribute significantly to the success of an organization. If an employer is not willing to deploy a tier-one recruiter to attract the best talent, what does that say about their commitment to building a stellar team?

Time-to-Fill

A recruiter’s probability of filling a retained search is generally 90-95%, whereas success filling a contingent search is 50%. This has serious repercussions on execution. If employers are not willing to financially commit, recruiters are forced to hedge by taking on numerous searches. This results in your critical search competing for time on a recruiter’s desk. On the other hand, once retained, a recruiter is bound by metrics and deliverables that ensure timely search fulfillment.

Consistency

With one elite headhunter working on filling your search, a consistent message is being communicated to the individuals you seek to attract and hire. A streamlined hiring process can be implemented, and the number of unqualified resumes will be reduced. Read more about the importance of a properly mapped hiring process.

In the case of multiple recruiters engaged, the chance of the same candidate hearing multiple employment value propositions increases leading to inconsistent messaging in the market. Different recruiters will have various ways of running a hiring process and unqualified resumes will stream through as competing headhunters vie for candidate ownership.

Candidate ownership is defined as the notion that once a recruiter refers a candidate to an employer, the recruiter is due compensation if the candidate is hired within an agreed upon period of time, typically one year.

Streamlining Interaction

Working with one recruiter, hiring managers can limit the time dedicated to interacting with headhunters when providing feedback on candidate resumes and debriefing on interviews. If numerous search firms are involved, a hiring manager will be bombarded with requests for time reducing their ability to complete their daily tasks. Here is guidance on partnering with recruiters.

First Right of Refusal

When evaluating search firms for a retained engagement, always ask about first right of refusal. If an employer pays a fee to retain a recruiter, it’s reasonable to expect that they will have the first option of speaking with a qualified candidate prior to the recruiter introducing that individual to another client.

Reporting

A search firm that has been retained is on the hook and the client (employer) should be informed on incremental progress of the search. Progress can include:

    • Size of the candidate pool identified
    • Number of candidates engaged
    • Response rate
    • Market feedback
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Terms

Employers can protect their financial investment by implementing terms when partnering with retained search firms.

    • After a search intake discussion, recruiters should be expected to document search elements such as qualifying questions, budget for compensation, hiring process, and employment value proposition before starting the search. This ensures time is not wasted level-setting on these basic components while already engaged in the search.
    • Set a number of qualified candidates that should be presented within a certain period of time.  If the recruiter is unable to produce, an employer has the right to a refund.
    • Recruiters should be specialized in your niche or geographic market and references should be readily available.   
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Exclusive Contingent Search

In this model, a recruiter agrees to work on a contingent basis, meaning a fee is paid upon completion of the search. Exclusivity is the commitment made by the employer that it will not engage competing firms to work on the same search.

This type of engagement may be appropriate when engaging a search firm on high volume searches such as first line management and individual contributors. While employers should not expect the same level of service that they would receive on a retained engagement, there are significant benefits to choosing this approach.

Fees will vary depending on industry and the competitive nature of the staffing firms within that niche. A guideline to consider would be anywhere between 20-30% of a candidate’s first year base salary.

Time-to-fill

A recruiter’s probability of filling an exclusive contingent search is slightly reduced than when it is retained. For various reasons outside of a recruiter’s control, an employer can halt a search and the time dedicated by the headhunter is a complete loss. Still, the chances of success are drastically higher than a non-exclusive contingent search. This provides more incentive for a recruiter to limit the searches they accept resulting in your critical search taking priority.

Consistency

Like the retained model, an employer is committed to partnering with one elite headhunter. This results in a consistent message being communicated to the individuals you seek to attract and hire. A streamlined hiring process can be implemented, and the number of unqualified resumes will be reduced. Read more about the importance of a properly mapped hiring process.

In the case of multiple recruiters engaged, the chance of the same candidate hearing multiple employment value propositions increases, leading to inconsistent messaging in the market. Different recruiters will have various ways of running a hiring process and unqualified resumes will stream through as competing headhunters vie for candidate ownership.

Streamlining Interaction

Working with one recruiter, hiring managers can limit the time dedicated to interacting with headhunters when providing feedback on candidate resumes and debriefing on interviews. If various recruiters are involved, a hiring manager will be bombarded with requests for time reducing their ability to complete their daily tasks. Here is guidance on partnering with recruiters.

Terms

Exclusivity is finite. Employers should implement terms for searches conducted on an exclusive basis to ensure a recruiter with exclusivity is being productive.

    • After a search intake discussion, recruiters should be expected to document search elements such as qualifying questions, budget for compensation, hiring process, and employment value proposition before starting the search. This ensures time is not wasted level-setting on these basic components while already engaged in the search.
    • Set a number of qualified candidates that should be presented within a certain period of time.  If the recruiter is unable to produce, an employer has the right to rescind exclusivity.
    • Recruiters should be specialized in your niche or geographic market and references should be readily available.
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Non-Exclusive Contingent Search

Non-exclusive contingent searches require no commitment by the employer and a recruiting fee is not paid until the search is filled.  

In this scenario, employers can expect multiple recruiting sources streaming resumes to your company’s applicant tracking system (ATS) which is often perceived as creating the best chance for finding the perfect candidate profile.

This option may work well for employers looking to attract entry level candidates for positions requiring little to no prior experience.

Fees for these searches can range from 18-25% of a candidate’s first year base salary.

When considering implementing these terms to attract executives and other experienced candidates, there are ramifications to consider.

No Unified Messaging

The same individuals within your target candidate pool is likely to hear about the opportunity from multiple recruiters. This results in your message being communicated to that market inconsistently as each recruiter will convey your company’s employment value proposition differently.

Flood of Unqualified Resumes  

Unqualified resumes will overwhelm hiring managers. In the race for candidate ownership, recruiters are pressured to submit all candidates that are interested in your opportunity to ensure their competition doesn’t present them first. Quality of candidate submittals becomes an afterthought.

Breakdown of Process

Managing a coherent workflow with multiple recruiting firms will become a full time job for hiring managers and reduce their productivity. As is often the case, hiring managers will be too busy with their other duties to manage the recruiter workflow leading to delayed responses to recruiting partners. This will inevitably result in headhunters bombarding hiring managers to ensure their candidate submittals are not overlooked or to advance candidates already engaged in the process.

Confidential Recruiting

Knowing that they are competing with multiple search firms, recruiters will resort to confidential recruiting. This means they will not share the name of your firm with prospects until they’ve determined candidates are not already being represented or have applied internally.

This represents a significant missed opportunity to position your company’s brand to the individuals that make up your industry.

Why would recruiters accept non-exclusive contingent search terms?

Good recruiters may still agree to work a non-exclusive contingent search. Just know, they probably have engaged searches which will be prioritized over yours. You may receive a first round of candidates sourced by email blasts to the recruiter’s rolodex, calls to a few known quantities, and job postings. If that first round doesn’t pan out, it’s typically then that the activity drops off. That’s because the recruiter is likely not making hundreds of weekly calls on the non-exclusive contingent search. They are focusing on searches with the greatest probability of success while taking a Hail Mary approach on the lower probability searches.

Contact us to learn how Pinpoint Search Group can fill your most urgent searches.

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